If you've ever been approached by a solar lease or PPA
salesperson or have seen ads for these types of financing options, then
you've probably heard that these forms of financing are
affordable. While their "no upfront cost" sales pitch may
seem appealing at first glance, the long term effect on
your budget
will probably be quite different than what you expected.
In the long run, the reality
is that solar leases and PPAs are two of the most expensive
ways to have solar on your home
or place of business. (At least twice as
expensive when compared to an outright purchase of a
system). Today, pricing has dropped so low for a
purchased system (not a leased system) that a zero
to little maintenance, average sized 4.75 kW grid
tie solar system that will produce up to 600 kWh per
month with only 5 hours of peak sunshine per day can
now be easily purchased for less than $2.05 a watt
after applying the tax credit or less than $9,6000
.
While the solar leasing and PPA companies are
quoting 12 to 16 cents per kilowatt hour a purchased
system can easily yield a rate of 7 cents per kilowatt hour.
Not only are solar leases and
PPAs far more expensive in the end than an outright
purchase but here's a few other things to consider
before signing on that dotted line:
1. You'll
pay so much more for a lease than a purchase that's
it's actually you who will be over-paying for your
own maintenance, monitoring and insurance not the
leasing company.
2. You may have trouble
selling your home because what home buyer will want
to assume your lease payments on a used, outdated
solar system, when they can buy a brand new system
with the latest technology and keep the 30% federal
tax credit and other applicable incentives for
thousands less.
http://www.latimes.com/business/realestate/la-fi-harney-20150322-story.html
3.
After making 20 years worth of leasing payments, you
won't even own the system. It will still belong to
the leasing company.
4. Check that quote from
the solar leasing company and you'll find that most
cases, the leasing company won't even mention the
brand ot model of equipment that they're installing
on your home.
5.
You'll be locked in with the same aging solar system
on your roof without the ability to affordably
upgrade your system for the full 20 year term of the
contract. If you bought your system instead, you can
sell it at any time and take the proceeds from the
sale and upgrade to the latest equipment anytime you
wish. You can't do that with a lease because it's
not your system to sell.
7. You'll have to
forfeit the 30% federal tax credit and any
applicable cash rebate to the leasing company and
you won't get tax deductible interest on your lease
payments. Only a $0 down solar loan or $0 down or
PACE financing will provide you with tax deductible
interest and let you keep all of your incentives for
a much better return on your investment.
Before signing any long term contract
with any solar dealer,
always
ask if
your dealer
can offer you a
system for 7 cents per kilowatt hour. If
they can't, then I suggest that you shop somewhere
else. Be smart about your solar investment. Search
the Internet for 7 cents per kWh offerings. Learn
the truth about fair market pricing before you sign
any contract.
