Aahhh...finally...a business model to lease solar equipment is making solar electricity affordable for the rest of us. The concept is not new. Back in the day, when I worked for a solar inverter manufacturing company in New Hampshire, my colleagues and I would brainstorm on profitable ideas that would commercialize renewable energy fast, and leasing to homeowners was always at the top of the list.
The solar lease model would not only be hugely profitable, but also useful jump starting the solar industry, if you will. Only, there was a big problem with execution: cost. Cost in addition to inventory, and financial backing.
It took a great deal of initiative and collaboration between government, banks, manufacturers and solar integrators, but after several years of back and forth, formulating the approach to lease solar equipment became reality. This is a prelude to a new type of utility company, where the homeowner is generating electricity, paying a private company to lease solar equipment (or wind or fuel cell, etc.), have it maintained and repaired, AND feed any extra electricity back into the utility grid (net-metering).
Solar panel leasing has a great potential for creating a win-win for the consumer and there are now a few solar leasing companies offering services in several states. Leasing solar panels is a long-term deal, longer than leasing a car. Typical periods are between 10-20 years, with an "electricity rate" that is locked in for that period. This rate is usually comparable to the rate you are currently paying to your utility company (plus or minus), and is guaranteed for the duration of your lease. This is one of your primary benefits - insurance against the rising cost of electricity in the future - the other, of course is reducing your carbon footprint.
I, particularly, like the solar lease model versus a large centralized solar utility generating power from a solar farm. Distributed power is less vulnerable to large system glitches, and has a lower environmental impact. When you lease solar equipment, you claim a certain amount of autonomy. If one home goes down, there is no impact on your home. It can also be customized to each home's usage, and it creates more awareness of electricity use. If homeowners are properly educated in their energy use, and learn how to time their appliances properly to not oveload their system (not run the dishwasher and washing machine at the same time, etc.), we would naturally learn to conserve energy. Or, so is my hope.
With all of this, however, there are pros and cons to dealing with companies that lease solar equipment. A while back, I received a great question from a reader about solar leasing pros and cons, which I share below.
From Bob Lawrason:
I came across your site and was particularly looking for solar leasing info. Your site is one of the best ones I have seen and the only one recommended by SBIs link exchange I would consider. I am in search for solar leasing and would be interested in any leads comments or whatever you may feel helpful.
First, thank you for your question and comments about my "infant" website, much appreciated. I hope you keep revisiting as it grows...
Cutting to the chase, I do know of three companies that lease solar equipment; they all operate similarly with similar equipment/panels, services and rates. The "big" 3 are SunRun, Sungevity, and SolarCity. They all provide a zero down or $1000 down solar lease, with generally a 20-year period, charge a fixed monthly electricity rate which would still be slightly less per month than a utility company's. They seem to own all the equipment, and therefore, have total control.
I don't know much about Sungevity yet, but SunRun has been getting some buzz in the news lately, and I see SolarCity's Google ads on the internet pretty often.
Here are the pros to these companies:
For each one of the pros above, there is the flip side con:
Just some food for thought. If you do decide to lease solar equipment here are a few final comments:
If you decide to pursue the buy-your-own option, remember to check www.dsireusa.org for current information on incentives. While it is mind-numbing and challenging work, the financial reward is well worth it.
In addition, qualified solar contractors should know about the applicable incentive programs, and help, if not, file the applications for you. One final thing to remember is that a professional energy audit will often help get higher rebates due to a home energy rating.
This is the best picture I can paint of the current solar lease status. All in all, it is a promising market-driven endeavor.
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