If you’re exploring solar panel installation Calgary, you’ve likely noticed the increasing interest in solar energy across Canada. Despite the interest of many, one major question stands out: how do you pay for it?
Choosing to lease, borrow, or buy solar will impact your finances and how well your system works.
Key Takeaways
- Financing solar panel installation can be through leasing, loans, or buying outright.
- Leasing offers low upfront costs but no ownership, while loans allow you to own the system with flexible payment terms.
- Buying outright provides the most long-term savings and full control, but requires a larger initial investment.
Why Financing Matters in Solar Decisions
While solar panels have become more affordable compared to a decade ago, many Canadians still rely on financing options to make solar power a reality.
With government incentives and financing support, such as the Clean Energy Improvement Program (CEIP), the financial barrier to entry is lower but not eliminated. These programs promote clean energy while helping homeowners save money on energy bills and decrease greenhouse gas emissions.
The decision to finance affects how much solar energy you’ll generate, how quickly you’ll recover your investment, and what level of ownership and control you’ll have. Be it a lease, loan, or buy, your choice directly ties into how much value and usable energy you get from your solar PV system.
Option 1: Leasing Solar Panels
Solar leasing is an option where you don’t own the system. Instead, you enter into a long-term agreement with a third-party solar provider, usually 15 to 25 years. The company installs and maintains the system, and you agree to pay a fixed monthly fee. These payments are normally lower than your previous electricity bills, which offers instant cost relief with minimal upfront investment.
In Canada, solar leasing is growing but remains less common than in the U.S., largely due to the current structure of government programs and market maturity. Companies offering leases may install systems at no upfront cost, with homeowners agreeing to purchase the usable energy the system produces or paying a set monthly lease fee.
Pros of Leasing
- Low or no upfront cost. Accessible for households with limited cash on hand.
- Solar provider handles the installation, maintenance, and performance monitoring.
- Predictable monthly payments help plan your energy costs more effectively.
Cons of Leasing
- No eligibility for federal or provincial rebates or tax incentives.
- Total lease payments may exceed the cost of owning the system outright.
- Less control over system upgrades or changes in the solar panel system size
Option 2: Solar Loans
Offered by banks, credit unions, or directly by solar providers, they allow you to spread payments over a fixed term—between 5 and 15 years. Loans can be secured (backed by home equity) or unsecured (based on your credit score), which affects interest rates and terms.
Solar loans is appealing to homeowners who want to take full ownership of their solar PV systems without the high upfront cost. Loan-funded ownership makes you eligible for net metering, rebates, and incentive programs to offset your electricity usage and sell excess power back to the grid.
Pros of Taking a Loan
- You fully own the system, benefiting from all available federal or provincial incentives.
- Adds to property value and marketability.
- Positive cash flow is possible, especially if your energy usage is high and your loan payment is lower than what you were paying in energy bills.
Cons of Taking a Loan
- A good credit score is necessary.
- Interest payments and administrative fees can increase your total investment cost.
- Maintenance is your responsibility, which means you’ll need to work with certified electricians or top solar panel companies if issues arise.
Option 3: Buying Outright
Paying in full for your solar installation offers the cleanest path to ownership and long-term savings. You cover the entire installation cost upfront and begin benefiting from your solar system immediately, without recurring payments.
This approach is best for those with available capital and a long-term plan to stay in their home or commercial property. The payback period varies based on solar panel system size, roof type, location, energy consumption, and access to net metering.
Pros of Buying Outright
- Maximizes savings by eliminating interest and lease payments.
- Full eligibility for rebates, government incentives, and net metering benefits.
- Boosts property value, especially in Calgary, among the sunniest cities in Western Canada.
Cons of Buying Outright
- High upfront costs can be a deterrent, most especially without financial support.
- Longer payback period if you plan to move soon or if your electricity usage is relatively low.
- You’re fully responsible for performance and upkeep, so quality solar photovoltaic matters.
Lease vs. Loan vs. Buying Outright – A Quick Comparison Table
Aspects | Buy Outright | Solar Lease | Solar Loan |
Upfront Cost | High | Low | Low to Medium |
Ownership | Yes | No | Yes |
Incentives Eligible | Yes | No | Yes |
Maintenance | Property owners | Usually Included | Property owners |
Monthly Payments | No | Yes | Yes |
Long-term Savings | Highest | Moderate | High |
How to Choose the Right Solar Financing Option
Choosing between leasing, loans, or a full purchase depends on your financial goals and living situation. Consult a reputable solar company to evaluate your solar potential and recommend financing programs available in your area. When choosing the best financing option, you need to keep the following points in mind:
Budget | Limited savings? Consider a lease or a loan. |
Have capital available? Buying outright gives you the most value. | |
Homeownership Plans | Planning to stay long-term? Ownership makes sense. |
Moving soon? Leasing might be less risky. | |
Credit Score | Good credit opens up low-interest loans. |
Poor credit may restrict your financing options. | |
System Control | Ownership gives you the freedom to upgrade or expand. |
Leasing means less control but lower responsibility. | |
Environmental Impact | All three options reduce carbon emissions, but owning provides the greatest return on your environmental responsibility and financial commitment. |
Talk to a Reputable Solar Contractor For Your Options
Choosing how to finance your solar energy solutions is just as important as the commercial or residential solar panel installation itself. If you’re leaning toward a lease for flexibility, a loan for balance, or a full purchase for long-term gain, the right choice depends on your personal and financial situation.
For property owners considering installing solar panels, find an experienced team that can help ensure maximum efficiency and long-term savings. Contact our team at MAG Solar for your initial consultation. We’ve been helping homeowners and businesses across Western Canada switch to a more sustainable future with a stress-free experience. Get your solar panel installation Calgary and beyond with us.
