Leasing a Solar System - Does It Make Sense?

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dtrammel
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Bob Frick, over at Kiplinger.com has an article about the pros and cons of leasing a solar system for your home.

http://www.kiplinger.com/magazine/archives/leasing-home-solar-power-system.html?si=1

The big news in home solar isn’t the glut of solar panels worldwide that’s slashed prices in half in the past year. No, the big news is the rise of leasing, which makes home systems more affordable and can save you money right away on your electric bill.

Several years ago, Hal and Brenda Wright of Centennial, Colo., a town just south of Denver, started investigating solar power for their 2,600-square-foot home. It was "more because of the green aspect than the economic aspect," says Hal.

But Hal, a retired electrical engineer, became enamored with the savings. The six-kilowatt system the couple lease provides 85% of their home's electricity and cuts their monthly electric bill, which used to be $110, to $16.50, on average.

Hal wasn't averse to buying a solar power system, he says, but leasing made more financial sense. Instead of an initial outlay of more than $12,000, he made a one-time payment of $5,200 to SolarCity, a leasing and installation firm. That sum bought him a 20-year contract for power that will pay back his initial investment in less than five years and yield savings of $16,000 to $18,000 over the life of the contract, he figures.

Leasing has spurred a rapid increase in home solar installations. Though the total number remains small, according to estimates from the Interstate Renewable Energy Council, 186,000 U.S. homes had solar electric systems at the end of last year. Most of those systems were installed in the past couple of years."

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Now common wisdom here on the Green Wizard forum is taking out more debt is a bad thing.

Like anything, you need to do the math for your own personal situation. And for many people the time, energy and learning curve to maintaining your own solar system may be too much, Leasing may give you the advantages of having solar power without some of the downside.

Also, I tend to disagree with forecasts of decreasing energy costs in the long term, as mentioned in the article about natural gas prices. As most of us know, the "Fraking Boom" has depressed gas prices recently, a trend that I do not believe will last. And many electrical companies are changing over from coal to natural gas, that too will increase gas prices and electrical prices when gas rises.

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If you have a solar system now, either bought or leased, please share your experiences.

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sevenmmm
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Oh. I have lots and lots of

Oh. I have lots and lots of stories! I'll keep it short though.

We have an oversized solar water heater configured as a "drain back" system. When the solar storage tank reaches 160 degrees, the pump is shut down and the solar fluid drains back down into the basement drainback tank. This type of system can not overheat and we use zero natural gas from spring to fall equinox and save about half the nat gas otherwise. If one pays federal taxes 30% of the system gets knocked off the bill, and when we had it intalled, a state-mandated program paid very close to 25%. FYI. You don't get these if you lease the system.

The Federal tax incentive also applies to solar electric, and we have just had an assessment for a 2KW system costing about 10 grand.. The state program is going to kick in $1200 and adding the tax credit we will get $4200 of the system paid for. Again, in leasing you will not be able to take advantage.

We also have a solar air heating system on our house, but this received no incentives.

My advice may not be the best advice, but it is my advice, is thus. Do not lease the system. You are far better off making payments on a system that you own, and received incentives to help in buying, plus will sooner pay off, than payments to the lessor.

I also think any device harnessing the sustainable energy from the sun is about the only device worth getting a loan for. Downsize your house, trade your car in for a bicycle, whatever you have to do. Putting the sun's energy to use may help you live in relative comfort sometime down the line where you wouldn't have these luxuries otherwise. IMHO.

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