Earth Notes
12:35 pm
Wed May 14, 2014

Earth Notes: Solar Panels: To Buy or To Lease?

In the sunny Southwest, installing solar panels to produce electricity makes a lot of sense. But should homeowners buy their own, or lease rooftop panels instead?

Leasing has become a popular option in recent years. In 2013 86 percent of new solar installations on residential homes in Arizona were under a solar lease.

Solar leases are intriguing to homeowners because they remove the high upfront costs of installing solar panels on a home. In a solar lease a homeowner signs an agreement with a company that owns, installs, and manages the solar panels and equipment. The company takes advantage of bulk pricing and incentives to return a profit and pass monthly electricity savings on to the customer.

Leases usually run for 15 or 20 years. The savings potential for the homeowner depends on the lease agreement. Often, the homeowner pays a relatively small upfront cost in exchange for predictable and reduced monthly electricity payments over the term of the lease.

Also, the solar company is generally responsible for maintenance of the solar equipment. In some leases the homeowner receives a guarantee that the system will produce a certain amount of energy, to say nothing of the warm glow of generating and using clean energy.

But solar leasing is not for everyone. Daniel Snyder of Westwind Solar Electric encourages homeowners to read those lease agreements carefully with an attorney to clearly understand the legal complexities. And he suggests that homeowners can get loans to purchase panels and realize greater savings in the long run.

Credit American Solar Electric