Leasing Solar Panels Done Right

To lease or not to lease, that is the question? When homeowners lease solar systems, they purchase electricity from a company who owns the solar panels installed on their roof.  The cost the lessee pays may be lower or the same to what the utility would charge for electricity.  These are called escalation and de-escalation clauses. Solar leasing terms vary and allow homeowners to begin their solar leasing program with no money down. Leasing contracts are available in increments of twenty, fifteen or ten-year contracts.  Homeowners are given the option to buy the system, if not, fully own the system outright at the end of the lease. Leasing a solar electric system for your home, not the best idea. Despite the heavy advertising of corporate interests, here’s why. Ensure you do further research before leasing solar. 

Leasing Isn't Always The Best

A.  Solar leases are a sophisticated financial “tool”. Regrettably, it’s challenging to view what the real cost of it is.  Solar leasing companies are money managers who take advantage of federal and state solar subsidies to earn higher profits than their money can earn sitting in real estate or stock market investments at the moment. 

B. Ultimately signing a  multi-year leasing contract is typically what happens. Fifteen years is the typical contract length that’s not easily transferable if you sell the house. 

C. Possible buyers maybe weary of the solar leasing contact that they may inherit if you sell you home. The buyers must fulfill credit requirements and make payments on the remainder of the lease term, which comes to about 10-20 years.

D.  Contract payments increase on an annual basis at about 3.9% per year for 15 years is a norm. If your electric bill does not exceed $110, this program makes no sense financially. If you don’t have good credit, you’ll pay more than the advertised price.

E. If you do not own the solar panels, special issues incur. You’ll return them after 15 years or buy them at the end of the lease. The leasing company gets the rebates, incentives and federal tax credit for the purchase of solar panels. You may choose to purchase the panels after the end of the lease. 

Make It Easier

A. Purchase what you can afford to buy, and with the savings on your electrical bill, add more later. 

B. Obtain the benefits from owning your solar system. It increases the value and marketability of your home. State incentives for solar, utility rebates, and federal tax credits for 1/3 the cost of a solar system go to the owner of the system.

C. Purchasing solar panels provides flexibility. Lease contracts might specify a certain installation size, but when owners purchase their own system, they aren’t bound by details of equipment or power production. 

Move into the future with solar with the help of HahaSmart., Try our price checker tool and see how affordable solar really is. We can also help find qualified solar installers who can help save you money on the cost of going solar. Don't forget to visit our solar blog section for more handy guides and articles, about going solar.