10 Things You MUST Know Before Leasing a Solar System
1. Triple the Cost
Add up your payments on that “zero down” solar lease and you’ll find that you’ll be paying up to triple the cost when compared to purchasing your solar system. Factor in the escalating costs and the ‘fair market value’ at the end of the lease, if you choose to purchase the system you’ll be paying close to three times the purchase price.
2. Lose the Tax Credit
The zero down solar leasing company will take your 30% Federal tax credit that should have gone to you.
3. More Difficult to Sell Your Home
It is more difficult to sell a home with “leased solar”. The new buyer must agree to assume the lease and then they must also qualify to assume the lease. The seller can buyout the lease prior to selling the home but the buyout price is normally more than it should have been to originally purchase the system. Homes with a leased solar system sell for 5-10% less than homes that have owned solar.
4. Escalating Costs
Your monthly payments may increase by up to 2.9% per year. If you purchase solar you will be protected against rate inflation.
5. Double the Cost for Electricity
The cost of electricity is a minimum of 15 cents per kWh. When you purchase a system your cost for electricity is around 6-7 cents per kWh(or less).
6. What Happens When It’s Over
At year 20 if you owned your solar system, your system would have up to another 15 to 20 years worth of income generating potential. When you lease a solar system, at year 20, you’ll have to give your solar system back to the leasing company or you’ll have to buy it from them at ‘fair market value’ if you want to keep it or continue making lease payments.
7. No Changes
You cannot make any modifications to the solar system. Some customers may want to add battery backup down the road and with a lease this is not an option because you don’t own the system.
8. Banks Vs Investors
Zero Down Solar loan options are a much better deal than a solar lease or PPA. Solar lease finance companies make a 20-30% return on their investment. If you purchase with a loan you are replacing the 20%-30% return the leasing company makes with a 4-8% return the bank makes.
9. Property Tax
When you purchase SOLAR you add significant value to your home, without increasing your property taxes. When you lease solar you don’t get the added value but you still have all the expense.
10. Rent To Own Solar
Leasing Solar is like purchasing one of your most expensive investments from a ‘Rent-to-Own’ store. Before you sign that airtight leasing contract, you had better have your attorney and your accountant read the fine print. When compared to purchasing a solar system, especially as low as prices are today, a solar lease will probably turn out to be one of the worst investments that you’ll ever make.
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