10/11/2013 8:02:00 AM Ask the contractor: Pros and cons of leasing solar versus buying
Sandy Griffis Yavapai County Contractors Association
Q: My wife and I recently moved to Prescott from Oregon and we are thrilled with the number of sunny days in Prescott - so much so that we want solar. Should we lease or buy? -Aaron and Megan, Prescott
A: A solar lease would allow you to "go solar" for a lower up-front cost than an outright purchase. A solar lease is "full system management," meaning that the leasing company handles warranty issues and maintenance.
On the other hand, if you purchase a system, you need to be confident that the company be in business in several years for warranty and maintenance issues.
Some solar leasing companies insure your system so you do not have to cover it under your homeowners insurance. It is important to confirm what is covered in terms of your solar lease. They all vary. Some companies cover hail damage, while others do not. Some cover the inverter replacement and others do not.
Leasing versus purchase is specific to individual budget situations. Over a 20-year lease, the cost of the leased system is more than what a homeowner would pay for an outright purchase.
Jim Evans, executive solar sales consultant with SolarWorks, says that anyone who is thinking about solar should look at both options and determine which is best for their needs. The down payment on a solar lease varies from nothing to a few thousand dollars. This amount is tied into various factors such as the size of the unit, panel type, complexity of design, etc. Leases typically are 20 years.
With a lease, it is also important to confirm what happens if you sell your home before the lease is over. Can the lease be transferred to the new homeowner? Are you as the current homeowner responsible to pay for any remaining electricity in the contract? Can you purchase the system?
We have had situations with solar companies that have leased systems and then closed their doors. It is important to ensure that you are dealing with a well-financed, established solar company, and that they are financially strong. Make sure the lease contract indicates that if the company does declare bankruptcy or close their doors, you are able to keep your solar system and will continue to receive the renewable benefits. In this case, usually another solar company will pick up the maintenance and warranty.
Leasing a solar system is a good way for you to go solar without the large financial payment up front; however, you do pay more over a 20-year lease versus a purchase.
We are very fortunate that Prescott has top-drawer photovoltaic installation companies that are knowledgeable on design, installation, purchase and leasing of solar systems. Any of these companies can give you the comparative advantages and disadvantages, design overview, and whether solar is right for your home. They can provide an accurate cost, production and savings estimate based on their model. It is important to talk with more than one solar company because they use different panels and design models.
Contact Jim Evans with Solar Works at 499-4445; Ben Mancini with EV Solar at 636-2201; or Travis Purington of Pur Solar at 821-0891.
Yavapai County Contractors Association (YCCA) is a professional association representing licensed, bonded and insured contractors, suppliers, distributors and business entities. Call YCCA for information on hiring a contractor at 778-0040. Submit questions to email@example.com or through www.ycca.org.
Posted: Saturday, October 12, 2013
Article comment by:
"A solar lease would allow you to "go solar" for a lower up-front cost than an outright purchase. A solar lease is "full system management," meaning that the leasing company handles warranty issues and maintenance." This is no longer true. Today, homeowners can get a $0 down solar loan instead of an expensive solar lease and keep their 30% federal tax credit and any applicable cash rebate for a much better return on investment than a lease. Also, solar lease and PPA companies charge so much more for their systems when compared to a purchase, that it is actually the homeowner who is paying for their own maintenance and repairs. And good luck ever selling your home with a solar lease attached to it. What homebuyer will want to assume your remaining lease payments on a used system when they can buy a brand new solar system for tens of thousands less?