The concept of “leasing,” whether you’re talking about cars or a solar PV array, sometimes gets a bad rep in financial circles. When I leased my car, it turned out to be a very smart move. Even though I’ll have nothing to show for my payments at the end of three years, the peace of mind and convenience was worth it to me. If I had to buy a car, it would have been an older model, and who knows how much I would have ultimately spent in repairs and wasted time?
When people hear the term “solar lease,” they often equate it to to leasing a car or to renting virtually anything. A solar lease shares some similarities with these two financial decisions, but when you run the numbers, a solar lease makes sense for almost anybody. Let’s consider the pros and cons:
Solar Leasing PROS:
You don’t have to worry about maintenance or emergency repair costs on your panels. Your solar leasing company owns the panels; it is not your headache or responsibility if something goes wrong.
With some programs, you won’t have to pay any money down. If you don’t have $5,000 or more sitting around to pay for your solar PV installation, a solar lease lets you start reaping the benefits, and cost-savings, of solar immediately with no strain on your pocketbook.
A solar lease has flexible payment options. You can reduce your monthly payments by putting money down. And if you happen to come in to a lot of cash, you can pre-pay the entire lease and have one less bill to pay every month!
Solar Leasing CONS:
You may not qualify for a solar lease if you don’t have excellent credit. A solar lease is not for everyone just because, as with most leases, good credit is required to qualify.
Your solar PV installation won’t be fully paid off immediately, so you won’t enjoy “net zero” electric bills right away. Your solar lease payments will still be lower than what you were paying for electricity! (And, in many cases, your solar lease company guarantees it!)
A solar lease adds another layer of administration to selling your home. You have options when you sell your home, even in the midst of a solar lease. You can transfer the lease to the buyer, buy the system outright and include the cost in your home’s sale price, or have your solar PV array transferred (at your cost) to your new home within the same utility region. The third option is not likely to be desirable or practical, but the others simply hinge on finding a buyer who understands the value and cost savings of solar energy. With all your electric bills and lease payments as proof, this should be an easy sell!