Solar Leasing, an Affordable Solar Solution for Home
Why a solar lease?
Solar leasing and affordable solar are becoming the hot alternative energy topic these days. People new to solar are asking why solar leasing has become so prominent. The reason is that "home solar power systems" and "affordable solar for home" are two statements that have not always been synonymous. Since the advent of the green movement, many a homeowner has yearned to do their part to help the environment and save money at the same time by installing a solar energy system in their home. So why havenât we seen an abundance of solar panels popping up on the rooftops of homes across America in the last ten to fifteen years? Well up until now, the biggest obstacle for people has been cost. Fortunately though as Bob Dylan once sang, "The times they are A-changin." Thus, enter the solar lease option.
Solar the average homeowner can afford
Because the cost of solar panels and equipment has dropped significantly in the last couple of years, solar companies have been able to offer several solar programs that the average homeowner can afford. Number one on the list is solar leasing.
Leasing a home solar power system enables a homeowner to have a custom designed solar system installed in their home for free. They just pay for the use of the system on a monthly basis plus any remaining electrical bill, if there is any. The combined total monthly cost of the lease and new electric bill can be from 10% to 30% less on average compared to the their current energy bill - some will even see a greater percentage based on their electricity use and size of the system. These savings can add up to several hundreds of dollars saved each year over the lifetime of the lease.
Monthly savings chart
In addition, many solar lease programs require little to no money down. You do have the option however to put some money down upfront if you have it. This will lower your monthly lease payment and create an even greater savings over the years. The amount of electricity that the leased system generates in conjunction with the amount of energy consumption in your home is what determines the sum of money saved.
This is the great advantage to the many homeowners who don't have the financial means to come up with the large down payment necessary to purchase their own solar energy system. It finally allows a way for the average family to go green and save money with solar.
The sun is shining on homeowners in less affluent neighborhoods who are discovering they can afford solar energy after all - by leasing rather than buying the panels on their roofs.
The new business model lets homeowners save money the very first month, rather than breaking even a decade after an initial investment of $5,000 to $10,000.— National Renewable Energy Laboratory
You can read the entire article from the NREL here. Remember that this article was written in April of 2012 and that the cost of solar has come down even more since then. This has created an even greater savings for those who lease solar.
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How can solar companies do this?
There are two main reasons. The first is that the reduction in cost for solar panels and equipment has made this a more viable option for solar companies. It was just too expensive to consider before.
The second reason is that when you lease, you sign over to the solar company the monetary credits from the Federal, State, and Local rebate programs that exist for purchasing home solar. This allows them to recoup much of their upfront costs for the installation of the system.
Do you have to qualify for a solar lease?
You do have to qualify for a solar lease, but fortunately, solar companies make it very fast and easy to find out if you do. The first thing they ask when you contact them is if you own the home. You cannot lease if you rent. They then ask for your address and input this into a solar calculator to determine if your area receives enough sun throughout the year. They then determine from you what your monthly electricity bill is on average. As long as it is not too low, you will most likely qualify. If your electric bill is only $50 a month for example, it’s just not feasible to lease.
Most solar companies offer a free solar consultation when you contact them. If you qualify initially, they will come out to your home to determine if your roof will accept solar and that it faces in the correct general direction in order for the panels to receive enough sun. They also determine if there are any shade issues that need to be dealt with. They will then sit down with you and provide a number of solar leasing options based on your current energy needs and financial resources – all free of charge.
A fun solar lease video
This video is a good example of how the average homeowner can take advantage of the solar lease programs that exist today.
Solar leasing pros and cons - Solar leasing benefits
- Free installation of a home solar energy system that is designed just for your home
- Monthly savings on your energy bill that adds up to hundreds of dollars every year
- All system monitoring including maintenance and repairs are provided for at no cost
- All project management, utility inspections, and local permits are provided for
- No money down programs
- Flexible leasing programs
- Some have the option to upgrade to owning the system
- Most systems are fully insured
- Homeowners without the financial resources can finally take advantage of solar power
- System power performance is guaranteed
Solar leasing drawbacks
- The energy savings are not as much as when you own your own system
- The average solar lease program is 20 years
- If you sell the home, the home buyer must accept transfer of the lease or you pay a penalty
- The solar company collects on the rebate and incentive programs, not the homeowner
- Some leases have an escalator clause which can raise the lease payments each year - presumably at a rate lower than the average energy rate increases.
Is solar leasing the best alternative?
If you are a homeowner who doesn't have the financial means to purchase your own solar energy system, then yes, solar leasing is a very attractive and viable option to take advantage of solar power. Not only are you going green and reducing your carbon footprint, you are also saving money that can go where you determine it is needed most. If you qualify, then it just makes financial sense to lease solar if you have no other way of purchasing your own.
If you do have the financial means to purchase your own system, then solar leasing would not be the best alternative for you. There are many solar purchase programs that allow for creative financing and some require no money down upfront. With the solar rebate and incentive plans offered, you can save up to 50% on the cost of the system depending on your energy needs. You can actually eliminate your electricity bill all together and save thousands each year.
What say you?
Now that you have learned about solar leasing, do you think it is a good alternative if you can't afford your own system? Tell us what you think!
Find more information here!
- Go Solar California
Explains how the California Solar Initiative works. Rebates, incentives, and etc.
- Arizona Goes Solar
Arizona solar initiatives, rebates, and programs
- Understanding Home Solar Panels
Good information about DIY home solar from a resident squid.
- Federal Tax Credits for Consumer Energy Efficiency
Learn how to get all your Federal tax credits for different energy components including solar.