The dark side of leasing solar 

When homeowners lease solar panels, they purchase electricity from a company who owns the them. The price a 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 leasing program with no money down. These contracts are available in increments of twenty, fifteen or ten year contracts.  Homeowner’s are given the option to buy the system, if not, fully own the system outright at the end of the lease. Leasing a system for your home not the best idea. Despite the heavy advertising of corporate interests, here’s why. Ensure you do further research prior to leasing solar. 
 

Solar lease is a complex financial “tool”

A lease is a complex financial “tool”. Unfortunately, it’s challenging  to view what the real price 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. Eventually 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. Potential buyers maybe weary of the 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.  Lease 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. You don’t own the panels. 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 panels. You may choose to purchase the panels after the end of the lease. 
 

Perks and advantages

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

B. Reap the benefits from owning your 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. Buying 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. 

If you want to join the solar revolution, go to HahaSmart.com and try our price checker tool. You can see how much a system will cost, and how much you can save over the next 20 years. For more information about solar, don't forget to visit our solar blog section for guides and articles.