Things to Remember about San Diego Solar Leases
Solar Leasing Requirements
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At Sunline Energy, we do not believe you should lease your San Diego solar electricity. We have found leases to progressively become more one sided as time goes on and are no longer offering solar leasing in San Diego due to a number of reasons, the main points are listed below.
Please note that the word “Lease” is interchangeable with PPA or Power Purchase Agreement Leasing solar in San Diego is really no different then leasing a car. The main difference is the longest car leases are about four years, a lease can be up to a 25 year commitment, and some increase payments up to 4.5% per year, which means on a 20 year lease your payments during year 20 will be up to 90% higher than your original payment, and on a 25 year lease your payment will more then double.
Things to Remember about San Diego Solar Leases:
- When you purchase a solar system in San Diego, it will provide an immediate increase in your home’s value as soon as you install the system. However, if you do a San Diego solar system lease, you’ve created a debt liability that a potential home buyer will probably not want to assume. Remember that solar systems are custom built based on your needs, and the new owners might use less or more electricity then you designed your system. Your leased San Diego solar system can not be modified as you do not own it. This means you may not expand it.
Remember at the end of the 20 or 25 years, you still need to pay a buyout fee which is not disclosed on most contracts. What potential home buyer would want to assume a lease on a used solar system that they had no say in the original negotiations? If you work with a less then reputable solar leasing company, you might have a lease with annual payment increases as well as well as the fact that the payments could be much less if the original owner negotiated a correct deal. If the potential home buyer wants nothing to do with your legally binding debt or can’t qualify for the lease assumption, then you’ll have to pay a hefty penalty to break your San Diego solar lease agreement which could be tens of thousands of dollars.
- A properly installed solar system requires almost no maintenance other than a good rinsing with a garden hose occasionally to remove accumulated dust from the solar modules if it does not rain every three months or so (and even this isn’t always true). Solar modules are covered under a 25 year factory warranty, and we back them with a 10 year workmanship warranty.
- A San Diego solar system will not only pay itself off in as little as 4 to 5 years, but will continue to make you money over its 30 to 40 year expected lifetime. This is one of the primary reasons why residential solar lease companies want you to let them use your roof. Keep in mind that the overproduction your system might generate goes to the leasing company, essentially cutting you off from profiting on your San Diego solar system.
- If you do a San Diego Solar Lease, the leasing company will get the rebate because they will own the system that you’ll be making payments on for the next 20-25 years. This is another reason why residential solar lease companies want you to let them use your roof.
- The Federal government is currently offering a 30% tax credit that’s currently available for the installation of a solar electric system on your home or business. With a solar lease you won’t get the 30% federal tax credit either because you are not buying the system. The San Diego solar leasing company will get the tax credit because they will own the system that you’ll be making payments on for the next 20 years.
Solar Leasing Requirements
Usually the leasing company requires the installer to purchase panels from them. Let us say on an example installation the system cost is $30,000 that means the leasing company gets a $9,000 tax credit, they might only pay that amount in cost for the panels leaving them with a 20 year revenue stream, not to mention the depreciation they take.
We understand that there are consumers who simply can’t afford to purchase a solar system. But when you consider that you’ll only be saving about 6 to 15% on your electric bill when leasing a solar system in San Diego. Wouldn’t it make more sense to take advantage of all of the rebates that are available for energy efficiency improvements? It can save you even more than 6 to 15% on your energy bills without giving away your valuable roof space and locking yourself into 20 years of lease payments.
We can answer any further questions you might have leasing vs. owning solar panels.
If you are ready to go solar or would like to learn more about solar, or any of our services call us at (858) 252-5580 or fill out the contact form and one of our representatives will get back to you shortly.