Zero upfront costs
The most appealing aspect of the solar lease can be that it doesn’t need to fret about the expensive initial costs of a solar panel system to enjoy the advantages of solar power. The majority of solar leases are zero-down and therefore you don’t have to be concerned about having to pay an enormous amount of money.
Lower energy costs
Solar leases can offer you electricity bill savings since the leasing payments were (initially) made to be lower than your electric bill would be.
Not accountable for maintenance
If you sign an agreement with a solar company it is not your responsibility for the care and maintenance of your system. While this may sound great initially, it’s not all that any benefit. Solar panels are extremely easy to maintain, and require only the washing of the hose every four times per year, at the least.
The more serious problems, like defective wiring or problems with inverters will likely be covered under the manufacturer’s warranty or the installer’s warranty damage that result from storms might be protected by homeowners insurance.
Therefore, you’d get these security features with the routine purchase of solar panels regardless.
Monthly payments that are predictable
You’ll know exactly the amount of your lease payment will be since it is stipulated in your lease. This will make it easier for you to calculate the monthly costs.
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Advantages and disadvantages of a solar lease
Tax credits are not available or other solar incentives
When you sign a lease for solar you are not able to avail of any kind of tax credit for solar energy since you aren’t proprietor of your solar panel. Thus the federal 26% solar tax credit will be given to the solar developer, not you. State credit will also be given to the solar developer.
Furthermore you’ll be unable to avail other solar rebates and incentives including SRECs. These could put an enormous amount of money into your pockets.
Savings on long-term debt are lower
The most significant drawback of the solar lease is that the savings you will enjoy over time are significantly lower you compare it to purchasing solar panels. If you buy a solar system instead, you’ll have the option of eliminating the entire electric bill, and not have to worry about other monthly installments.
Even if you get loans to purchase solar panels, in the end you’ll be able to pay for the loan, and your solar panel will become yours. That means they’ll generate electricity absolutely free! Solar energy that you generate can lower your electric bills and you’ll not need to make lease payments or lease fees – just free energy.
When you lease, you’re obligated to paying for twenty to 25 years. In that time the amount you spend on lease payments could be greater than the system could have been worth starting with! The electricity that the panels generate won’t be for free.
Price escalator
Solar leases will have price escalators in order to reflect the rising electricity costs. There is however no way of knowing how much electricity will rise until the time it occurs.
The majority of solar leases include an escalator of between 1 and 5 percent per year. Therefore, if your solar lease costs 100 dollars in the first year it will go up by 1percent in Year 2. If electricity does not rise by this much during a particular year, you may be paying more for your solar lease than what you would have spent on the electricity you get at your local utility.
It doesn’t add value to your property
If you purchase solar panels that are installed, they boost the worth of the house. When you lease them the panels do not have any value because you’re not the owner.
Selling your home isn’t easy
Alongside the fact that leasing solar systems that do not add value to your home, it can also make it more difficult to sell your house.
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A small percentage of potential buyers won’t be interested in taking over the lease contract contingent on your consumption of energy. In addition, many prospective home buyers might be misled by the idea that a lease is based on solar energy which could turn them off the thought of buying your house.
Is there an alternative to financing solar energy alternative to leasing a solar system?
Solar panels are less expensive than they’ve ever been however this doesn’t mean that it’s not costly. A typical solar panel within the U.S. will cost somewhere between $14,000 to $16,000 after the federal tax credit for solar is utilized. This isn’t pocket money.
Thus, even though solar panels are still costly but the lower price allows you to take loans to pay for expenses. The idea of taking out a loan have the potential to work for solar as the cost was too high, and it was not financially sensible to finance it with the aid of a loan. That’s when solar leasing began to take off.
The cost of a solar energy system is not so high that homeowners are able to get a loan to cover the cost of installation. Solar loans, which are similar to mortgages for home equity, let homeowners put in solar panels without having to spend the purchase of tens of thousands of dollars at one time. Instead, you will make monthly installments till the loans are paid back. When you have paid your loan back, the panel becomes totally yours and will provide electricity to your house for absolutely free.
Do you need to sign the solar lease?
While “free solar panels” (otherwise called solar lease) seem like a fantastic bargain, there are few situations where it is the most effective option to go solar. The only situation where the solar lease is a good idea is if you’re not eligible for federal tax credits or don’t meet the requirements for the solar loan.
The most effective way to finance solar energy if you’re not able to pay to purchase it cash is through the solar loan. It offers all the advantages of solar power, such as the reduction in your electric bill and the powering of the home using renewable power and you don’t need to think about the initial cost.
