Commercial Solar Roof Lease vs. Buy ROI Calculator

Commercial Solar Roof Lease vs. Buy ROI Calculator

Stop guessing your ROI. Most people forget to factor in overhead costs, tax incentives, and the long-term maintenance that comes with owning a solar system. The decision to lease or buy a commercial solar roof is laden with complexities. It’s not just about the upfront costs. You need to consider potential energy savings, loan payments, and the impact of your local utility rates.

How to Use This Calculator

You need accurate data to make this calculation worthwhile. Start by digging into your electricity bills to find your average monthly usage and rates. Grab quotes from solar providers for both leasing and purchasing options. Don't forget about government incentives; they can significantly affect your bottom line. For example, if you’re in Texas, look into state-specific tax credits. Also, consider any maintenance or insurance costs you might incur if you buy.

The Formula

The ROI is calculated using the formula:

[ ROI = \frac{(Total Savings - Total Costs)}{Total Costs} \times 100 ]

Here’s how it works: Total Savings includes everything you save on your electricity bills over the lease or loan period, while Total Costs account for all your expenses, including initial investment, maintenance, and any financing fees.

Variables Explained

• Average Monthly Electricity Cost: Gather your last 12 months of bills. This is what you’re trying to offset with solar.
• Lease Payment: Your monthly payment if you choose to lease the system. Get this from your provider.
• Purchase Price: What it costs to outright buy the solar system. This will also include installation, so don’t be shy about asking for a comprehensive quote.
• Incentives: These can include federal tax credits and any local rebates. Research is key; don’t skip this step.
• Maintenance Costs: If you buy, you’ll need to consider expenses for upkeep. A well-maintained system can last 25 years, but neglect can lead to inefficiencies.

Case Study

For example, a client in Texas had an average monthly electricity bill of $3,000. After consulting with various solar providers, they learned that leasing would cost them about $1,500 a month, whereas buying the system came to a total cost of about $150,000. They qualified for a 26% federal tax credit and found local incentives that knocked off another $10,000. After running the numbers through the ROI calculator, they realized that in just under 5 years, buying the system would save them significantly over leasing.

The Math

Let’s break it down with numbers. Assuming their total savings over 25 years from reduced electricity costs would be around $300,000, their Total Costs for buying the system came to $150,000. Plugging that into our formula:

[ ROI = \frac{(300,000 - 150,000)}{150,000} \times 100 = 100% ]

That’s a solid ROI. Meanwhile, if they had leased, their savings would be significantly lower, leading to a much poorer return on investment.

💡 Industry Pro Tip

Don’t overlook your utility rate structure. If your utility offers a time-of-use rate, you might save even more by adjusting your usage patterns. Keep an eye on when you use the most energy and how that aligns with solar generation. Just because the sun is shining doesn’t mean your solar panels are working at full capacity all day.

FAQ

• What if my electricity usage changes? Adjust your inputs periodically. If you expand your business, your energy needs may increase, affecting your ROI.
• Can I refinance my solar loan? Yes, just like any other loan, refinancing can lower your monthly payments or interest rate, improving your ROI.
• Is leasing better than buying? It depends on your financial situation and energy goals. Calculate both scenarios before making a decision.
• How do tax incentives work? They reduce your tax liability, making the overall cost of solar less. Always consult with a tax professional to understand your specific situation.