Solar panel leasing is becoming an affordable and popular way for homeowners to switch to solar power without the expensive upfront costs. Over the past 12 months, solar leasing experienced tremendous growth as property owners look for creative and alternative ways to finance residential solar panels.
Market experts predict that in 2012 a wider variety of arrangements will be available. Homeowners should consider comparing lease options before committing to a 25-35 year lease with any particular company.
Generally speaking, a solar panel lease involves installation of an array on your property, while the company itself retains ownership of the panels and equipment. Because you are not purchasing the panels, solar panel leasing often requires no, or little, money down. Instead of paying off the cost of a solar array, you pay a monthly fee to the company that owns, maintains and insures the panels. Such fee is lower than the monthly cost of electricity you would otherwise be paying for.
So what should you consider in comparing solar lease options?
1. The installers and solar panel manufacturers you will be dealing with through the leasing company
2. System performance and maintenance guarantees provided under the lease
3. Dependability of service and reputation of companies with which the leasing company works, based on customer reviews
4. Degree of flexibility in lease terms – a longer lease with slightly more money down will usually result in more monthly savings than a short lease term with no money down.
5. Whether the state in which you live has renewable portfolio standards that rewards owners for solar electricity generated by your system (create SREC markets) and, if so, whether you are entitled to ownership of the SRECs after the end of the lease (since they are usually retained by the leasing company through the duration of the lease).
Refer to this overview of factors to consider when comparing lease options for solar panels.