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If you want to take advantage of the many benefits of using solar energy to power your home , but are concerned about cost , renting solar power may be a good option for you. To know if a solar lease is right for you, it's important to know what the lease offers and, more importantly, how it works.
Essentially, this option allows solar users to maximize savings by providing access and use of the equipment they need to power their homes with solar energy for a fixed monthly fee. Leasing can finance the purchase of solar panels without spending money.
"With solar leasing, Americans can avoid upfront costs and start saving right away." of the State.
When considering solar leasing, you should not only understand how it works, but also research the pros and cons of deciding to lease solar. Here's what you need to know.
How does solar leasing work?
Semanek shares that solar leasing began in 2007, allowing homeowners to use solar panels for as little as $0 . This was revolutionary at the time because it eliminated the high initial setup and upfront costs (and some hassle) of choosing this power option.
Since then, solar leasing has quickly become one of the most popular ways to get solar power. Since solar panel energy costs are so much cheaper today than when they were first introduced as a viable energy solution, leasing may not be as attractive or even necessary as it was when this energy-based option was first introduced. in costs.
The most important thing about solar leasing is ownership. For a fixed price or fee calculated or set by the rental company, you can install solar panels on your home.
What happens after installing solar panels?
Once installed, the panels provide electricity to your home, but do not belong to the owner; The rooms are owned by the rental company, and you basically pay a monthly usage fee just like you would rent and drive a car. One thing to look at and keep in mind if you decide to go with the rental is the terms of the rental agreement.
Be sure to ask about the length of the lease (typically 20-25 years), the amount of the fixed monthly payment, and how much you can expect your bill to increase each year based on the interest rate scale, from 1% to 5%.
Pros and cons of solar leasing
Advantages of renting solar panels
- Solar panel rentals offer customers energy savings. For example, Sunrun guarantees that your new solar system will not operate at less than 95% of its rated capacity. If the sun does not shine or something breaks and the panels do not produce the expected electricity, the company will refund the difference. Sunrun does not penalize customers for any additional power their systems may produce beyond rated power.
- Solar leasing allows customers to avoid upfront costs for solar equipment and installation. Instead of paying directly for the solar system, the customer can pay a fixed monthly amount for the electricity generated by the solar panels. This makes solar energy affordable for many.
- The lease also provides customers with the benefits of a professionally managed and maintained system, daily monitoring and guarantee of energy production. Solar leases typically include regular maintenance and repairs, system monitoring, system insurance, and a roof approval guarantee.
- While solar power purchase agreements, or PPAs, offer a viable financing solution without worryingly large upfront costs, they can actually cost more money than leasing, which offers a fixed monthly fee regardless of usage. With a PPA, you are charged for each kilowatt-hour of solar energy produced, so leasing is the best option.
Disadvantages of renting solar panels
- Depending on where you live and how many sunny days are actually available to generate solar power, you may need to supplement your solar power with another power source, such as electricity. In such cases, you need to cover two bills.
- Leasing solar adds no value to your home, mainly because the leased panels don't get to keep the house when you sell it. It's also important to remember that leased solar can make selling a home more difficult if potential buyers aren't interested in solar and need to explore other home energy options.
- Solar panels are cheaper than electricity and other energy sources, but renting panels doesn't offer the same long-term savings as buying the best solar panels outright. In addition, there are no tax benefits or incentives associated with the lease. All tax credits offered go to the solar developer, not the owner.
Frequent questions
What is better, buy or rent solar panels?
No matter what type of solar panel you are looking to invest in, renting and buying is a valid concern. For example, solar panel leasing makes solar power use more affordable for people who don't have the money to invest in solar panels upfront. But unlike buying solar panels or using a payment plan to buy solar panels, leasing solar panels means you don't own them. Instead, the third party owns the team.
However, in addition to the initial investment in purchasing solar panels, there are some benefits to consider, such as receiving additional solar credits on your tax returns based on state or manufacturer rebates. Solar panels can also increase a home's value, which is an important factor, but it may not stop your home from selling.
Should you rent solar panels?
By leasing solar panels, you get the benefits of lower utility bills and helping the environment without a significant impact on your savings. Depending on the lease plan and its terms, you may be able to purchase the solar panels at the end of the lease.
What is a power purchase agreement?
In some states, homeowners can lease or finance solar panels, known as power purchase agreements (PPAs). In these power purchase or lease agreements, a third party owns and installs the solar system on your roof, then pays that party for their power each month. You'll save money, typically 10-30% less than your current monthly bill. Some PPAs set you at a fixed price, but some have a payment schedule that increases each year.
