Zero-Down Solar Leasing for New Homes

Posted on October 23rd, 2013 by
   

The solar PV market has been though a lot of changes in the last couple of years. Since Solarcity introduced the model of zero-down solar leasing back in 2006 many solar providers (including SunRun, Sungevity, SunPower and Real Goods Solar) have followed suit. Third-party-ownership has become the preferred way to go solar in many of the solar states across the country. A study conducted by PVSolarReport found that 70% of all Californians now prefer third-party solar.

SolarCity announced that they have started offering zero-down solar leasing in new home communities. This means that homebuilders can integrate solar panels in their residential communities, and according to SolarCity, “homebuyers can save up to 20 percent on their energy costs from the very first day they move in”.

 

EIA (Energy Information Administration) says the residential sector contributed to 20% of all carbon dioxide emissions last year – there`s clearly a lot of potential for lowering our carbon footprint by being smarter about energy use in our homes.

A residential solar system is an excellent replacement of other carbon-based electricity sources. Thanks to federal and state incentives, solar panels also makes a lot of sense financially. One Block Off the Grid reports that the average homeowner saves over $1200 a year on electricity by going solar.

Whether or not a lease or a power purchase agreement (PPA) would be the best approach in your situation depends. As a general rule of thumb, if you can afford to pay with cash upfront, or if you can finance the solar system through a well-structured loan, then you should avoid third-party-ownership. The truth to the matter is that in terms of long-term savings, ownership beats a lease or a PPA every time.

SolarCity is offering zero-down solar leasing for new homes in Arizona, California, Colorado, Maryland, New Jersey and Oregon, and plan to expand the program to other states in the months to come.

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One Person has left comments on this post



» Ray Boggs said: { Jan 19, 2014 - 07:01:13 }

Unfortunately, no money down solar leases and PPAs are two of the most expensive ways to have solar on your roof. A zero down solar lease will typically cost a homeowner more than 3 times what he or she would have paid had the system been purchased instead. In fact you’ll pay so much more for a leased system that it will actually be you, who will be paying for your own repairs, insurance and monitoring many, many times over. Don’t believe it ? Do the math. Add up your lease payments including the annual payment escalator over 20 years on that $0 down solar lease and then compare that to purchasing an installed system at today’s much lower pricing of less than $2.10 per watt after the incentives are applied, and there you have it. More than 3 times the cost when you lease.

And good luck if you ever want to sell your home with a solar lease attached to it. What home buyer will want to assume your lease on a used solar system, when they can buy a brand new solar system and keep the incentives for tens of thousands less than your remaining lease payments Don’t become a solar sheep. Shop before you sign that 20 year contract !



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