Solar leases have the benefit of no upfront costs (i.e. you get a brand new installation for free). In addition, you pay a lower monthly fee for your electricity over the 15 to 20 years of your contract.
But as many soon discover, solar leases have a potential dark side.
We looked at one example of a customer whose bills went up after signing a lease with a highly popular solar contractor. Instead of paying $182 a month, he’s now paying $500. And he can’t break the contract.
Other customers who used this same contractor faced slightly different problems – namely – shoddy workmanship.
Rapid growth is usually a good thing. And solar leasing has allowed the abovementioned contractor to expand its customer base very quickly. Almost too quickly. After all, 90K customers is a pretty large pool. That’s almost the definition of success.
But there’s a downside.
When you’re dealing with that many customers, it’s much harder to maintain quality. There are countless complaints cropping up all over California from homeowners who are dissatisfied with their installations.
- Underperforming solar panels
- Code violations and property disputes
- Poor repairs and failed inspections
These are bad enough. But many also complain of the unnecessarily long wait times required to get these issues resolved. Repeated requests and emails don’t always do the trick. Only by contacting independent agencies like the Better Business Bureau can some customers get their issues resolved.
Is the Solar Panel Lease Approach Always a Bad Idea?
It’s worth noting that solar leasing isn’t all bad. In fact, many homeowners and businesses have enjoyed tremendous success with this financing approach. And the above horror stories have as much to do with “leasing” as they do with the contractor(s) involved.
No matter how you finance your solar installation, make sure you stick with local contractors who have the time and resources to devote to YOUR energy needs. As this article explains, bigger is not always better.
That being said, solar leasing still has some major drawbacks. Even with a local contractor, you still face the risk of decreased property values and higher than expected electricity payments.
Moreover, you don’t receive many of the incentives, rebates, and tax credits that come with true system ownership. For a more exhaustive list of solar leasing dangers, you should check out these 4 articles:
A Better Alternative to Solar Panel Leasing?
So is there a better option to solar leasing?
If you don’t have the cash to pay for a new solar installation upfront, we strongly recommend using a solar loan instead. With this financing approach:
- all benefits, tax credits, and incentives come to you (the system owner)
- you pay almost nothing upfront (some loans even require $0 upfront)
- you enjoy lower electricity bills (starting immediately)
- your property value increases (i.e. your system is an asset – not a liability)
Probably the biggest difference is that your solar panels become an investment. When you lease your system, you’ll never build up equity over the 15 to 20 years of your contract.
But when you own your system, you’re working towards true energy independence. Within 4 to 6 years (on average), your monthly obligations to the bank stop. After this payback period, you enjoy decades of free electricity.
Yes – decades.
A standard solar installation lasts a minimum of 25 years. A well-installed system can last 40 years or more. So with a loan payback period of 5 years, that’s 35 years of free electricity.
This is why we encourage our customers to explore loans instead of leases. Solar delivers ROIs that put Wall Street to shame.
To learn how you can make solar work for you, contact us today for a free consultation.