Solar panels on homes are increasingly popular, but should you buy, lease or rent?

• A majority of Americans say they've seriously considered putting solar panels on their house or have already done so, according to Pew.
  
• Homeowners today have more options for solar than ever, but the best choice depends on the year-round weather and the state incentives where you live.
• A federal tax credit for solar panels is set to expire after 2021.

2020 is shaping up to be a dramatic year for solar power.

Starting this year, for instance, most new homes in California will be required to have solar panels. But many homeowners in the state have already rushed to add solar panels and batteries to their houses as they grapple with increasingly frequent blackouts. 

Across the U.S., a majority of homeowners have either seriously considered installing solar panels or have already done so, according to a Pew survey last month.

Sunrun, which sells solar panels primarily through long-term lease agreements, in October saw traffic spike 1,500% to the page on its website that explains how to power through blackouts, shortly after California's Pacific Gas & Electric cut power proactively to thousands of people hoping to prevent wildfires. 

During the October blackouts, Sunrun's California customers with solar and battery systems kept their lights on for more than 36 hours on average, and one Sonoma County family powered their home for nearly six straight days.

"Interest has by far gone through the roof," Evelyn Huang, chief customer experience officer at Sunrun, told the Associated Press.

When weighing whether to buy, lease or subscribe to a solar energy system, it's worth considering whether there are hidden costs or pitfalls.

Buying is best

If you have the cash, most experts agree that buying a solar system outright is a better investment than leasing or taking out a loan. Customers should check electric bills to estimate monthly energy use when deciding what size system to buy and calculate federal or state incentives. Check with your state's department of energy or a database like DSIRE. 

Make efficiency upgrades elsewhere in the home, such as buying new windows or energy-saving appliances, before choosing a system to help avoid purchasing a solar array that's larger than necessary.

"Conserving the amount of electricity that you use and installing solar go hand in hand," Spencer Fields, a content manager at clean-energy marketplace EnergySage, told CBS News. "You can have one without the other, but it makes more sense to do them together." 

A good solar company will help calculate the appropriate size for a solar array.

With an array costing $20,000 or more, solar companies and others are increasingly offering loans to help alleviate the upfront cost. The solar loan market grew 40% in early 2019 from the same time last year, according to Wood Mackenzie.

For buyers, the sooner the better. The federal investment tax credit, which currently covers 30% of the cost of the system, will fall over the next two years and is set to expire for residential customers in 2022, despite industry efforts to extend it. Many states also offer their own incentives.

Leases can save money, but may have a catch

Leasing a solar energy system — in states that allow it — may be an attractive option for people who don't have the cash to buy a system.

Sunrun estimates that customers who lease panels save 10% to 40% on their electric bills. Customers can choose a fixed monthly rate or start out with a lower monthly payment that increases over time. Leases at Sunrun typically last about 25 years.

Lease companies also handle repairs, and "if the system doesn't perform, the customer doesn't pay," said Thomas Plagemann, chief commercial officer at Vivint Solar.

But leases have declined in recent years, as panel prices fell and loan options increased. About 28% of residential solar systems are owned by third parties, down from 62% in early 2014, according to the Solar Energy Industries Association.

"Usually it ends up being more expensive over the life of the project (to lease)," said Brett Simon, senior energy storage analyst at Wood Mackenzie. "It's economically more efficient if you have the capital to just buy a system."

Lease customers aren't guaranteed to save money, and entering into a lease agreement can complicate home sales. 

That was the case for Steve Hebert in Hillsboro, Oregon, who began leasing solar panels from Solar City in 2016 before the company was bought by Tesla. When Hebert recently decided to sell his house, his real estate agent told him it would be difficult because of the solar lease. The lease could be transferred to a potential buyer, but some sales prospects wouldn't want to take it on.

Hebert tried to find out what it would cost to buy out the rest of the lease agreement and found out he wouldn't be able to buy it outright until he was five years into the contract. He wanted to find out more but said he had difficulty getting a Tesla representative on the phone, according to the AP.

"I feel like I'm probably at a wash or paying more than I was before solar," Hebert told the AP. "I love that I can feel good about running my AC in the summer but I regret this whole thing."

Subscribe and save?

Everything from diapers to cars can be bought with a subscription, and now you can add solar panels to the list. Tesla is among the companies offering solar subscriptions and will install a small, medium or large system on your roof which provides energy to your home for a monthly fee. Customers, who are still hooked up to their electric utility, pay for any additional electricity that they pull from the grid.

Jenny Gracia, who moves frequently as part of a military family, had solar panels installed in her California home, saving her a couple hundred dollars per month, she said.

But beware of fees to uninstall a system. Tesla was charging a $1,500 fee to remove leased solar panels, but has since stopped charging that fee, a spokesman said.

— CBS News' Irina Ivanova contributed reporting.