Buy or rent a solar system: Which green alternative is right for your company?

Sustainability concepts in companies are no longer a rare phenomenon. Economic, environmental, and social issues are at the forefront of these efforts. Particularly with regard to the environment, there are many opportunities for companies to support a greener future. The focus here lies on renewable energies, which rely on natural resources to generate electricity, for example, and protect the climate.   

Companies that decide to use solar energy to generate electricity are therefore on the right track. But should a company buy or rent a solar system? The fact is: The advantages in terms of sustainability, ESG regulations, and corporate image are nearly the same for both options. But what are the differences between the concepts? What are the advantages and disadvantages of each concept and what questions should you ask yourself before making a decision? We have compared both options for companies in this guide article.

Buying a PV system: Long-term plans with a higher investment 

Anyone buying a photovoltaic system has to make a large initial investment. However, this investment is worth it, because in the long run, companies benefit from lower energy costs, a stable return, and greater independence from the public electricity grid as well as the associated fluctuating electricity prices. In short: the photovoltaic system pays for itself. Photovoltaic electricity can also create an additional source of income, as surplus energy can be fed into the public grid for a fee. In addition, tax benefits await you after the purchase of a PV system and you increase the value of your property.   

But beyond the financial aspects, there are also several advantages in terms of environmental awareness and image: By generating green electricity through solar, you are using sustainable energy and reducing your ecological footprint. You also position yourself as an environmentally conscious company and secure yourself regarding future ESG requirements or CO2 regulations. 

Are there any disadvantages to purchasing a system?  

As already mentioned, a photovoltaic system is a long-term investment that pays for itself – however, this takes longer when purchasing a system compared to other solar concepts, as large financial resources need to be released at the very beginning. It should also be borne in mind that interest will be charged if a loan is taken out. However, this can be offset in the long term by the savings from solar energy. It is important that the size of the system is correctly calculated and designed for the existing electricity requirements. Experts can provide support here with a simulation and profitability calculations.   

Rent a PV system: Flexibility with less financial risks  

When a company rents a photovoltaic system, the first advantage is that it does not have to incur any acquisition costs. Anyone who wants to remain more flexible financially and wants to bear less risk can opt for this option when it comes to the question of "renting or buying". Financing, planning, installation, and operation are handled by the service provider. The rental price is fixed for 20 years or longer and, depending on the contract, also includes agreements on the maintenance of the system. 

Added to this come advantages typically pertaining to the purchase of a PV system – as mentioned above: You and your tenants benefit from cheaper solar power and greater independence from the public electricity market – at least over the rental period. However, it is also possible to take over the system after the agreed term or after certain time intervals. The rental model also puts companies at an advantage in terms of ESG regulations and brand image: they send a clear signal for sustainability and position themselves as an organization that embraces social responsibility.   

Are there also disadvantages to a rental model?  

Depending on the contract, a rental model can also result in tax advantages for companies, although these are comparably lower than when purchasing a photovoltaic system. In addition, a rental model also involves a certain degree of dependency, as upgrades such as electricity storage can only be implemented in cooperation with the system lessor – which comes to be an advantage since outsourcing this takes work off your hands. With a purchase, you have freedom of choice over your system, but more risk. In comparison, the rental model gives you more financial and time flexibility. 

So, what questions should you ask yourself to make a decision?  

What is best for your company? Rent or buy a PV system? To summarize, you should ask yourself the following questions to decide which solar concept is most suitable for you:   

• Does our company have the financial resources to buy a PV system? If not, do we want to take out a loan? How high will the interest be?  

• How flexible do we want or need to be as a company in the future? Do we need financial resources for this in the next few years?  

• Are our photovoltaic plans long-term or medium-term? How long do we want to benefit from PV electricity?  

• How high is our electricity demand? Can we cover our demand with a PV system, or do we need extra energy from the grid? Do we need a PPA (Power Purchase Agreement)? 

• Does our company have a dedicated team or the human capital to take care of operation, maintenance, etc.? Or is it far from our core? If the latter, we better outsource these tasks.  

• Which combination suits us best as a company? Freedom of choice with more risk (purchase) or financial and resource flexibility while outsourcing areas to a specialist (rent)?  

• Why are we doing this (to be more sustainable and greener, to create a positive company image, to cover electricity demands)? Both concepts will cover all those reasons.  

• Additional question: Is the combination of PV system and electricity storage worthwhile in our case? 

• Additional question: Is a combination of PV system and charging infrastructure for electric cars worthwhile in our case? 

Conclusion   

The question "Rent or buy photovoltaics?" can be answered as follows: It depends. Both options have their advantages for companies. Which option is most suitable for your business depends on your individual priorities, business goals, plans, and requirements. In general, purchasing a PV system is theoretically suitable for long-term fixed plans but requires a higher investment. The rental model, on the other hand, offers more (financial) flexibility, and requires no initial costs.    

As mentioned in the beginning: The advantages in terms of sustainability, ESG regulations, and corporate image are nearly the same for both options: you position yourself as an ecofriendly and forward-looking company. What is more, additional services such as electricity storage or e-mobility can be combined with PV, regardless of which concept you choose.