Leasing solar power. Another option to go green.
Posted on September 27th, 2010 by Daniel
Solar panels are probably the first thing we think of when we think clean power for your home. And it’s no surprise, because we know there will be daylight readily available to give us the power we need. However, most of us probably think that we can’t afford solar panels on our roof because of the up-front cost of tens of thousands of dollars. The federal government has stepped in by providing a 30% tax credit for solar installs, and states like Maryland have rebates of up to $10,000, but even after applying those, the cost can still be pretty high. So why not lease solar panels?
Here’s an example: Say that your household pays up to $175 for 1000 kW-hours of electricity per month, your highest usage during the year. You decide to install a 5.5 kW solar photovoltaic system to generate 50% of your electricity for $30,550. After applying Maryland’s $0.3/watt rebate and the 30% federal tax credit, the total cost drops to $19,440, a nice drop! But because you do not have that kind of money laying around, you decide go with the No-Money-Down lease option.
A typical lease term for a solar system is 15-20 years (yes it should be transferrable to a new owner if you decide to sell your home). Using the 15-year term, your monthly lease payments come to about $78. Since you are still paying some money to the utility company for the additional power you need at night, etc. (aka the other 50%), your average utility payment is now $68 per month. Adding the two payments, you get $166 per month, or about 5% in savings. Note that most of these deals are structured such that you save at least 10% off of your usual electric bill, so the numbers presented here vary slightly (they’re based on a residual value of $1/Watt and a 9% interest rate), but we hope that you get the gist of this option.
Of course you don’t get to collect any of the incentives and credits for the system because you do not own it. However, at the end of the lease term, the cost of the system can be more affordable, so it would make sense to buy the existing panels, instead of getting another lease agreement. From a technological standpoint, there may be better/cheaper options available at the end of your lease as well. So we’ll simply say “let’s cross that bridge when we get there!”
Overall, we think this is an excellent option for people that want to get solar panels with no money down. As long as the federal/state incentives are available, these green financing options make it very affordable for people to go green and reduce their carbon footprint. We have several solar contractors available to help you with your solar project, so request a free quote today!
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Tags: Green Financing, solar lease, solar power
This entry was posted on Monday, September 27th, 2010 at 11:37 pm and is filed under Featured Content, Green Financing, Solar Energy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
just like leasing a car, but greener
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