The Pitfalls of Solar Leasing Programs
NOW THIS IS HAPPENING
Global financial services giant Citi and Solar City. a California-based leader in solar power systems and services, have joined forces to make residential solar power more viable. The two companies recently announced that $40 million in funding has been earmarked for expansion of a residential leasing program that allows homeowners to install solar panels without an upfront investment. The step is one of many initiatives Citi is partaking in to reinforce its dedication to greener causes. According to the official release, the global financial services leader is in the midst of a 10-year, $50 billion initiative to support the commercialization and growth of alternative energy and clean technology in markets around the world.
The program is called Solar Lease, and it currently has 7,000 participating customers across California, Oregon, and most recently, Maryland and Washington DC. (The program is called PurePower in some regions.) The funding will allow for further expansion of the program.
SolarCity touts the main benefit of the program is that it allows homeowners to obtain the immediate financial impact of solar energy, because it does not require homeowners to put any money down. According to the company s website, payments can be as low as $20 per month in some areas.
But while it s a nice thought that the companies are joining forces to make the world a better place, is solar leasing really as great as it sounds? Not according to the National Association of Certified Home Inspectors (NACHI). While the group concurs on some positive aspects of solar leasing programs, the system is not without its flaws.
For example, the lowered commitment of leasing allows for experimentation without risk. If after trying solar panels a homeowner chooses to return to grid power, the cost of removing the solar panel system is far less than if the system was bought outright. It also removes a lot of hassle. In a leasing situation, the solar company typically makes the installation process turnkey, handling issues that arise with permits, engineering, financing.
But NACHI also points out that in solar leasing, the homeowner misses out on federal tax credits and state incentives associated with the use of solar panels. Likewise, no one knows what grid power will cost years from now, so whether you will really save still involves guesswork.
Currently, there is an increased focus on solar energy at the federal level. As incentives for using solar energy became more appealing, the technology is sure to improve. That means you could be stuck with less-than-stellar solar power technology just a few years from now. Further, if you move or your renters aren t too fond of the idea, you must either pay to terminate the lease contract, transfer it to a new homeowner, or pay the costs associated with removing and reinstalling the panels on a new home.
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