Why Leasing Solar Panels Shouldn't Always Be Our First Choice

We all have been there.  It's been a hot summer, and the AC has been cranking, the kids are home for summer break and continue to leave the refrigerator door open.  Then, the dreaded day comes as we reach into the mailbox and our body shakes as we open the electricity bill.  As we ponder how we will ever pay for our children's first car, college, retirement, our mind latches onto a familiar saving scenario.  We immediately begin to attempt to seek the methods possible to attain low-cost, energy bill saving, solar panels.  For many people who cannot afford to buy their solar system outright, leasing becomes a considered option.  However, leasing solar panels vs. buying can expose some short-falls when trying to make a move to solar.    

Why Leasing Isn't Shouldn't Be Our First Choice

The up-front expenses for a household solar system can make a leasing solar energy company's phone sales pitch sound pretty impressive. Often the solar energy company's salesperson will encourage a system that demonstrates a no-cost or low-cost payment to save hundreds of dollars per year on average. They often base this premise of savings around the concept that one saves due to the union of your lease payment and one's electric bill is less than what you currently pay for your energy consumption costs.  Try to avoid the emotional leaning as you imagine your immediate financial burdens. Leasing can also seem enticingly simple contrasted with buying.  This one-stop shop method can move things along at a speed that can be bewildering. There’s no need to shop separately for an installer and a separate financing house. Just sign on the dotted line. This ease of contract through the demonstrated 72 percent of the people who installed residential solar systems in past years did so through leasing or another type of third-party arrangement.  However, simplicity doesn't always mean quality.  

Modest Savings For Solar System Leasing 

People who lease solar tend to save far less than outright cash and private loan buyers. Several leases include escalating rate increases, sometimes as much as 3 percent per year. Those starting out with a 12 cents per kilowatt-hour in year one, with a 3 percent escalator, they end up paying 18.2 cents in the 15th year. So, if the cost of energy doesn’t rise as quickly as the contracted lease payments increase, you can watch your energy savings disappear.

Your Roof Becomes The Leasers Roof

Leasing companies make money in proportion to the number of solar panels you have on your property.  In the case of roof installation, the leasing company may put more panels than you had expected to raise their profit line.  They also might turn your roof into a neighborhood eyesore.  Since panel maximization is vital, they may utilize roof space that doesn't add to the beauty of your home but aligns with their ability to put as many panels on your roof as possible.  

Home Buyers Become Weary

When you put your home up for sale, the lease you have contracted into can last up to 20 years.  The would-be person who is interested in purchasing your home might be especially reluctant to take on or buy out the lease with the already formidable cost of a home purchase.  This is something to consider if you do not think you will live in your house for the duration of your life.   In some cases, solar leasing companies may offer to relocate their systems at an additional cost.  However, there may be many complications with approvals from the utility company, local landmark commission, or HOAs.  

Service Plans Don’t Serve You

Often the solar system equipment is not covered by the maintenance plan, but are covered by the warranty.   The leasing company might not cover the loss of damage if a storm destroys your panels.  You may have to file for your homeowner's insurance to cover those costs instead.  So, make sure whether you buy or lease, you inform your insurer when installing your solar system.

Solar Leasing Might Not Last Forever 

The last thing to reflect on when considering leasing a solar panel system is the long-game.  When the lease is over, what is your next move?  When the end of your contract arrives, the solar leasing company may remove your equipment, and those energy savings as well.    

In Conclusion

For many people who cannot afford to buy their solar system outright, leasing becomes a considered option in an attempt to seek the methods possible to attain low-cost, energy bill saving, solar panels.  However, we have learned that leasing solar panels vs. buying can expose some short-falls when trying to make a move to solar.    

If you want to move into the future and join the solar revolution, or if you want to find out what solar panels are right for you, 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 relating to going solar, don't forget to visit our solar blog section for more handy guides and articles.