From coast to coast, the cost of heating and cooling homes and providing energy to keep everything from computers to lights to hot water heaters up and running is rising. Meanwhile, we continue to burn fuels such as coal and oil that might be harmful to the environment and, somewhere down the line, may no longer be available.
Solar power has been a viable option for decades, but only if you could afford to install a costly system to harness the virtually endless energy of the sun. Those who were financially unable to handle the upfront costs remained at the mercy of their local utility companies.
Like Leasing a Car
The situation is changing, at least in 14 states and the District of Columbia, where the option of solar leasing is now available to business owners and homeowners.
We lease cars and office equipment – why shouldn’t we be able to do the same with solar cells? In Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Texas and Washington, solar leasing is both legal and thriving, and several private companies have jumped into the market. In other states, only utility companies can sell energy, but lawmakers around the country are considering legislation that might change that situation.
Leasing solar panels is a lot like leasing an automobile. Private companies install the system and maintain the equipment for the length of the lease, usually 15 to 20 years. You pay the company a fixed monthly fee, all the while saving on your utility bills because the sun, rather than coal or oil, is providing the power. In almost all cases, the sum of your lease payments and new utility bill is less than your old utility bill.
Why Leasing is the Answer
Here are some reasons to take a serious look at solar leasing:
- Upfront costs are minimal.
- Traditional utility bills vary greatly from month to month. You’ll be paying a fixed monthly fee for your solar lease.
- You won’t have to worry about maintenance. The company that sold you the lease will be responsible for taking care of the equipment.
- Solar panels increase the resale value of your home. You’ll probably have the option to transfer your lease or buy the remainder of the lease and include your system in the sales price of your home.
Why Leasing Might Not Work
You might want to consider buying your solar panels rather than leasing them, even though upfront costs could come to $20,000 or $30,000. Here’s why:
- Local and federal governments offer lucrative tax incentives to people who purchase solar panels. If you are leasing, the company that owns the panels gets the tax breaks.
- If your panels generate more energy than you use, the excess goes back into the local electrical system. If the utility company offers a rebate for this extra energy, it will go to the leasing company rather than into your pocket.
- If you buy your solar panels rather than leasing them, you eventually will own them. You won’t have lease payments or high energy bills.
Questions You Should Ask
Several companies are currently offering solar leasing programs, so there’s a good chance that you will have the opportunity to seek quotes from more than one source. Here are some of the avenues you should explore to help you decide who should get your business. Asking these questions also will help you determine if your best option is buying or leasing.
- How much will the monthly payments be?
- Will the payments be constant throughout the life of the lease, or will they rise with time and by how much?
- What will be the total cost of the lease, and how does this number compare with the total cost of purchasing the equipment?
- Will you have the option to buy the equipment during the lease period? If so, how much will the equipment cost? Will you have to pay a penalty to cancel the lease?
Whether you will be able to take advantage of solar leasing to convert your home or business to solar energy depends on where you live. Solar leasing is big business in California, Arizona and Colorado. According to a recent report by GTM Research, nearly three-quarters of all homeowners in those three states who install solar panels pay for them through leases. It’s no surprise that the nation’s four largest companies providing solar leases are headquartered in California: Sunrun, SunPower, SolarCity and Clean Power Finance.
Capturing the power of the sun to heat and cool your home and keep all your electronic gadgets and appliances fired up is both cost-efficient and kind to the environment. Leasing the equipment to do so could be a viable option for you.