As more businesses look to cut energy costs and reduce their environmental impact, commercial solar panel systems have become an increasingly attractive investment.
However, one of the first and most important decisions to make is whether to lease or buy your system. Each option comes with unique advantages, and the right choice depends on your company’s financial goals, operational needs, and long-term energy strategy.
Buying Commercial Solar Panels
When your business purchases a solar system outright—either in cash or through financing—you gain full ownership. This typically involves a higher upfront cost, but it also offers the greatest long-term financial return. Businesses that buy their systems can benefit from:
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Federal tax incentives: Ownership qualifies you for the federal Investment Tax Credit (ITC), which allows you to deduct a significant percentage of the system’s cost from your federal taxes.
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Accelerated depreciation: Under the Modified Accelerated Cost Recovery System (MACRS), you can depreciate the system and reduce your taxable income even further.
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Energy savings and ROI: Owning the system lets you enjoy 100% of the energy savings. Over time, those savings can offset the initial investment and generate a strong ROI.
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Increased property value: Solar panels can boost your property’s value, which is a plus if you plan to sell your facility down the line.
However, ownership also means you’re responsible for ongoing maintenance and repairs, though solar systems generally require minimal upkeep.
Leasing Commercial Solar Panels
If your business prefers to avoid a large upfront investment, leasing may be a better fit. In a solar lease or power purchase agreement (PPA), a third-party provider installs and maintains the system on your property, and you pay a fixed monthly fee or a rate per kilowatt-hour.
Leasing benefits include:
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Low or no upfront costs: Leasing allows businesses to adopt solar with little capital investment, preserving cash flow for other priorities.
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Predictable energy costs: Fixed monthly payments can help with budget planning and offer immediate savings compared to utility rates.
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Minimal responsibility: The leasing provider typically handles installation, monitoring, and maintenance.
On the downside, leasing doesn’t offer the same tax benefits or long-term financial return as buying. You also won’t own the system, which can limit future flexibility and property value increases.
So, What’s Best for Your Business?
If your business has the capital or financing options available and wants to maximize savings over time, buying is likely the best path. But if your priority is reducing upfront costs and simplifying operations, leasing may be a more practical choice.
Every business is different, and the right solar strategy depends on your financial goals, energy usage, and facility type.
Need help deciding? Contact Urban Solar today to speak with our commercial energy experts. We’ll help you evaluate your options and build a custom solar solution that meets your business’s unique needs.
