If you have dreamed of using solar energy to power your home, but have been unable to outlay $18,000 to $40,000 to purchase and install the typical rooftop solar energy system, new leasing options may be your answer. In recent years, several companies have started to provide zero-cost options to U.S.-based homeowners to install and share use of solar energy systems.
Over time, buying a solar energy system versus leasing it will save more money for the average homeowner. Leasing, however, offers several distinct advantages, including the ability to get a solar system with no money upfront, immediate monthly savings on utility bills, ongoing remote monitoring of system performance, worry-free maintenance should any issues arise, and included insurance coverage against damage or theft.
According to SolarCity, the largest third-party solar system provider in the U.S., the savings over a 20-year period for solar energy depends upon your location. In Los Angeles, California, the 20-year savings for a self-purchased system is $12,576 versus $10,437 for a zero-down leased solar system. In Long Island, New York, the expected difference is much greater with a savings of $29,662 for a purchased system versus $14,956 for a leased system.
By installing their solar systems on your home, third-party companies like SolarCity, Sunrun, and Sungevity will own the energy generated by the solar panels. Like a utility bill, you must pay a monthly, or other pre-arranged term, for the solar power you use. The ongoing cost, however, is much lower than traditional electricity from the grid. Also, the savings can be expected to grow over time as utility rates have increased 3–5 percent every year.
There are disadvantages of leasing solar energy systems, including signing a long-term contract with steep penalties for cancellation, difficulty selling a home with a solar lease, and the third-party company receives any federal tax credits and ongoing cash incentives for installing and using solar power. As with any major purchase, it is important to do extensive research and weigh all options.
Whether you buy or lease solar panels, the economics of solar make sense for most homeowners with sufficient sunlight exposure and no immediate plans to sell their house. Of course, switching from electricity produced from dirty fossil fuels to clean renewable energy in any capacity will help reduce carbon emissions which contribute to global warming and air pollution.
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