Interested in Solar Power but don’t have tens of thousands of dollars? Free Solar Panels?
Solar City, and most other solar power installers, have an interesting program where you lease solar equipment and pay a monthly lease. The Solar Lease payment and lower electric bill will be less than your current electric bill. The company owns the solar panels and you rent them by paying the cost of the power.
80% of solar installations used this solar lease technique in the 2010 – 2012 time frame. The numbers have been falling due to the banks seeing that it was profitable and causing rates to go up.
They advertise a medium sized 5kW system with $0 down – free solar panels!, no security deposit for $110 a month with 3.9% annual interest rate for 15 years on approved credit. When the solar lease ends, you can extend it, remove the solar panels, or upgrade to a new, more efficient solar system. Other providers should have similar offers in other areas.
You can save $10,050 over the next 15 years, because you have locked in low price for solar electricity while utility rates continue to increase. Some leases last from ten to twenty years and cost from $30 to $300 a month.
With some solar leases, you may be able to write off depreciation on your taxes. Ask your solar installation company and accountant about this.
Loans from financial institutions to pay for solar panels is becoming more popular. Home owners pay a reasonable interest rate, typical 6% in early 2013. A solar lease when calculated out, may result in a high 18% effective interest rate.
Because solar panel prices have fallen so fast, the best way to purchase a new solar panel system is by paying cash or getting a loan. More than 50% of customers do this in 2017.
Sun Run Solar Power
Sun Run partners with local companies to provide solar systems and financing. They have a Solar Power Purchase Agreement or solar PPA where you pay a fixed, set rate for all the solar electricity produced by the solar panels. The rate is typically $0.20/kWh for the next 18 to 20 years. Sun Run also has a solar lease you pay a monthly payment to rent the solar panels on your roof. There may also be a small installation fee upfront with either plan, usually under $1000. PG&E recently invested in the company.
The amount of your monthly solar lease payment is the same each month, regardless of how much solar electricity your system produces. This is the main difference between a solar lease and a solar power purchase agreement.
Leasing your system does not qualify you for Federal or State solar rebates, the company installing them gets the rebates. Make sure the provider is passing along the rebate in the form of lower monthly lease costs. Some plans allow prepaid leasing, which can double or triple your net savings. The best solar incentives are in Arizona, California, Colorado, Massachusetts, New Jersey, and Pennsylvania. Texas and Florida are coming online. In 2012, merely 74% of solar installations utilized these solar leases.
Make sure any solar service you sign up with has insurance and a means to fix any problems. Keep in mind that solar power agreements are a contract, so if you move, you need to either transfer the agreement to the new owner, or buyout the remainder of the lease.
Read Are Solar Panels for me? and decide if Solar Panels are in your future.