How to Lease Solar Panels
87Purchasing a solar panel system upfront is often the thing that stops many people from converting to renewable energy. Today, however, you can lease solar panels, and often save a bundle.
Leasing solar panels is one of several ways to help finance solar power. But it may be one of the most lucrative. Even CBS News had a featured story on the subject recently. When you enter into a solar power lease, you don't own the system, but the terms of the lease agreement could save you significant funds that can help you with your monthly budget.
Don't believe me? Ask Kathy Nalty. She was profiled on the CBS Evening News, sharing her story about going solar.
In her typical suburban house, which she shares with kids and grandma, five TVs and four computers, her electric bill went from $200-$300 a month to just $59 a month.
Nalty's solar panels are "free," due to a solar panel lease program. The company charges her $100 a
month for the 15-year lease. Generous state and federal solar rebates - worth a couple thousand dollars - go to the company.
Yet, with her electricity usage down, Nalty says she saves so much on electric
bills that she comes out ahead about $100 each month.
How to Lease Solar Panels
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50 3x6 Untabbed Solar Cells DIY Panel Kit +Free Junction Box NEW TECHNOLOGY Cell
Current Bid: $49.95
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108-3x6 solar cells manufacturing grade cells with wire kit and leadbox(A grade)
Current Bid: $105.00
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SOLAR Flexible Roof Panel 124 watt UniSolar
Current Bid: $199.00
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170 Watt BP SOLAR PANEL 170W Solar Panel # SX170B Polycrystalline Silicon black
Current Bid: $175.00
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1KW Grade A Multi 6x6 Solar Cell DIY Solar Panel Kit w/Wire Flux Diode Free Ship
Current Bid: $394.95
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Solar Panel Charger Controller Regulator 10A 12V/24V, Auto Swich
Current Bid: $.85
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Should You Consider a Solar Lease?
There are basic considerations any property owner should review before deciding whether to purchase, lease or otherwise finance solar panels:
- What are your monthly electricity bills?
- What would the monthly payments be (under a lease or a loan)?
- Make sure that the payments are less than your average electricity bills
- Do you have equity in your home?
- Are you planning on staying in your home for at least the next 12-24 months?
- Would you prefer maintenance or repair of the solar panels to be done by professionals, or yourself?
- How much liquidity do you have (available cash?)
- What is your credit score? (should be at least 640)
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What Should You Look for in a Solar Panel Lease?
Today, a number of companies are getting into the solar lease business. But what can you expect as a consumer?
Definitely check with the Better Business Bureau to make sure that the company with which you are dealing is reputable. Review its website and even make a call to your local Chamber of Commerce to find out as much information as possible.
When you enter a solar panel lease, it is a binding contract. Both sides to the agreement must fulfill their promises, or risk legal action. Be sure to review every single provision in the agreement carefully. Given the value of solar panels, you may want to consider retaining a lawyer to help you make sure that all potential concerns are addressed and there are no overly restrictive terms.
The type of terms you will want to see in a solar panel lease include:
- Lease term: How long will you be leasing the panels (usually at least 5 years)
- Lease payments: How much will you pay, how often? Is there an escalation clause that gives the solar company the right to raise the rent?
- Early termination: Do you have the right to terminate the lease before the end of the term without penalty? If there is a penalty, how much?
- Lease renewal: Can you renew the lease? How? Under what terms?
- Maintenance of the solar panels: This should be the solar company's responsibility. Contact information should be spelled out specifically. Ideally, there should be a time stated within which a response must be made in case of damage or failure.
- Insurance: This should be the solar company's responsibility - to insure the solar panels.
- End of lease: What happens when the term is over? Removal of the panels, or will you as a consumer have the right to purchase the panels at a reduced cost? How will that cost be determined?
What Other Options Are There?
If you would prefer to purchase your own solar panels, instead of a lease, you can still minimize the upfront cost by financing solar panels.
Options may include: direct vendor financing (through companies like Sharp Solar or BP Solar), power purchase agreements (the provider finances, installs and owns your solar panels, and you pay them instead of a utility company for power), local government loans (residents within the district borrow money from the municipality and pay it back through property tax increases) or Energy-Efficient Mortgages (financing for energy-efficient installations are secured by equity in your home).
The bottom line is that its time to stop thinking about solar power as prohibitively expensive. You can go solar through a solar panel lease, or other financing options. And, like Kathy Nalty in the beginning of this article, you'll both save money and reduce your use of carbon-emitting, non-renewable resources.
That's a win all-around!
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Hello my dear friend Zsuzsy, (one of my very first fans here at HP) - yes, see if they have leasing options in Canada for solar panels. Same general guidelines as to what to consider. Best of luck to you. Warmly, Steph
I thought solar panels were obsolete now and had been replaced by the innovative solar tiles.
Solar tiles are aesthetically pleasing, but may be more expensive than traditional solar panels. Still, its great to think about all the options for renewable energy
We all knew that solar panels are good to environment as they are eco-friendly but its high cost led us to think thrice before purchasing. Any way your hub is really nice.
Leasing solar panels seems like a really interesting alternative, especially the part about maintenance and repair. Wonderful hub filled with good info as always
Hi Vizey, with the rising popularity of solar panels comes many different ways to help people install them on their homes or businesses. I suspect we'll hear about more people like the woman in the story who are using different ways to finance or lease panels in the months and years ahead.
Hi Roberta, some people have said that leasing solar panels is like leasing a car. I might agree, except that the insurance and maintenance provisions under a solar panel lease generally are more favorable to consumers. Anyway, its great to see options like this to help people go solar, don't you think?
I´m lucky enough to live in a place where solar energy production is supported by companies and town government. I only had to invest less than 1000€ to have a solar tracker producing energy on my backyard and also thermic panels to heat the water. http://portugal-silver-coast-property.com/blog/200
I´m glad I chose to live in Obidos :)
Here in the Central Valley of California -- home of unrelenting sunshine 9 months of the year -- there is NO reason not to be heating our homes and hot water with solar power. EVERY roof should have solar panels.
And thanks for the thorough analysis of the leasing alternative. That's definitely the wave of solar power companies down here.
Good hub!!! MM
Wow - less than 1000 Euros? I wish we had programs like that in the states! Good for you!
MM- I totally agree that we need to - and can - tap into solar energy much more than we do! Particularly in areas like where you live.... I appreciate the comment and support.
This is very interesting! I have been thinking about solar panels before but their cost is simply prohibitive. I wonder if leasing is possible here in our country? I will have to find that out.
Thank you for this truly informative hub!
Your are even able to build them yourself :O
I want to be addicted to the "SOLAR PANEL" group because I enjoy it much everyday I see it.
I want to be addicted to the "SOLAR PANEL" group because I enjoy it much everyday I see it.
Really interesting hub, thanks! Didn't know this was going on at all, very informative.
Thanks for stopping by - yes, the solar panel lease option should open the doors to many more people who wish to convert to solar energy!
Great hub as usual steph, We have a solar panel on our car and caravan and they are great. But too expensive in west oz to put on our home worst luck as our electricity is going up yet again. shameless thanks for telling us about leasing.
Hi Eileen, Yes, rising electricity costs are like kicking us when we're down.... I love to hear that you have solar panels on your vehicles. Perhaps they'll implement some special solar incentives in your area? Steph
It is a cool idea, yet your paying way to much for a system that will be considered outdated and possibly not up-to-code by the end of the lease. Still, great hub...keep writing my friend!
Thank you spartanking! There are definitely many considerations to make when deciding to lease solar panels.
I agree that leasing panels is a much more viable option for those that want to go solar but are gobsmacked when they see the price of the whole thing. And yes, leasing should appeal to most homeowners because they have less risk involved... the company pays / deals with manufacturing and installation flaws...
While some see the cost and size of a system like this... I thought it was interesting that no one mentioned to reduce your energy usage BEFORE investing in a lease or installation. That way the solar panel system you buy or lease is actually less than what you may have been given estimates on.... :)
Great point - of course, reducing energy costs is always recommended. Even when you install solar panels, you want to make sure you can avoid tapping into grid-based electricity (if you are grid-tied) to the maximum extent possible.
no chance of leasing on similar terms in Canada; the system of grants and rebates like in the US doesnt exist here, so you would have to add that to the cost and then, sadly, it isnt so cheap or competitive anymore. But it will come no doubt: prices of solar panels are coming down and will be coming down further over the next few years. so maybe....
Hi Paul - that is too bad about Canada, but I am hopeful that the solar panel market is going to change in a big way soon. Costs continue to drop and there are more and more ways to finance solar panels (through the manufacturer, local governments and more). Best, Stephanie
What a great concept. I've even seen some companies (in CO I believe) where they install the solar panels and everything for free but the kicker is that you pay them a portion of the money you save!
absolutely brilliant. You have just given me some much needed motivation to start up something similar from where Im from. Consider Hub Voted Up!
A solar lease is absolutely the worst way to get into solar. All of the benefits including the cash rebate, Federal tax credit, RECs (Renewable Energy Credits) go to the leasing company. You're only saving 10 to 15% in most cases and you'll be stuck with lease payments for 10 to 20 years ! Anyone can easily save up to 20 to 25%on their electric bill by taking advantage of all of the cash rebates that are available for simple energy efficiency improvements such as lighting, without being stuck with 20 years worth of lease payments. PACE (Property Assessed Clean Energy) financing programs offering 0 upfront costs and great interest rates and loan that you automatically walk away from when you sell your home are popping up all over the country. And unlike a solar lease, when you're done with your payments, you'll own the system. With a solar lease after 20 years worth of payments you won't own anything because the system belongs to the leasing company. With prices for solar coming down like they are (less than $5.00 a watt for an installed system) in a few years, a lot of people are going regret that they ever signed a lease agreement.
Wow thanks for the info!
Using solar power to our homes is really a good thing. Aside from having great benefits from it, you get to help the environment too! Thanks for sharing this great hub.
solar panel is best way to produce electricity.
our GOVT should took step for this becz we are facing problms in this field
Jim Davies hit it on the nail on the head. A solar lease is absolutely the worst way to go solar. In fact,if this is the only option available to you, wait until you can afford to pay cash or you're able to get a loan. Do you really want to be locked into a 15 to 20 lease? Do you know what the penalties are for an early out? If you are dead set on doing this, please consult with your attorney and/or your CPA. Don't take the advice of a salesperson. You need a trusted adviser to help you make the right decision.
Interesting site. Are there any solar leasing co's near or
in my 34232 area in fla.
Great article. Solar financing is so important because of the great costs of solar panels. I am still debating buying one. The pro is you could earn all your money back and more from the energy you are saving. Con is the price. Thanks!
Very happy to see solar projects.
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Zsuzsy Bee Level 3 Commenter 2 years ago
Well isn't that an innovative idea. I've been looking into solar and wind power. I must find out if such is available here in Canada.
What a super hub once again Steph.
Hope you and your gang are well
kindest regards Zsuzsy