Solar Panels for Your Home: Purchasing Solar Vs. Leasing
The residential solar landscape has certainly been a fascinating one to follow for anyone involved in this business. Demands for system installation, as well as the price for said installation, seems to change on the wind to a person who is not an expert in these sorts of sales patterns.
With regards to solar installment, people have one of two options: leasing or buying. The question of which you should invest in is both complicated and simple, as the following will explain in depth.
So that everyone is on the same page: what are the main differences between solar buying and solar leasing? Quite a few, actually, for example, solar leases are handled purely by a third-party company, who handle installation either for free or for a reasonably small fee. It is then your responsibility to set a payment amount based on the energy you use for the next 15 to 20 years, which the service caps, and then improves via an annual escalation fee to keep up with inflation.
Meanwhile, with a solar purchase, you own the system straight-out. No rental fees, beyond having to pay off whatever loan you used to pay for the original cost and setting up. Once you lease, the power goes into your home, but the third party still owns the system lock stock and barrel. There are other differences, needless to say, but they are more for the next category.
Weaknesses/Scams of Leasing
Leasing may not sound like a terrible deal, particularly to those who are aware of the problem that originates from crippling debt. But then again, solar leasing has many disadvantages that decrease its attractiveness in comparison to buying:
What these third-party providers will conveniently forget to tell you is that most of the tax rebates, credits, and incentives go to them, not you. This fact would not be as much of an issue if it weren’t for the fact that most of them will explicitly tell you alternatively.
This brand of scamming has become so ubiquitous within the leasing part of the solar business that it is becoming a business model in and of itself. Some solar installers have received up to several hundred million dollars in tax breaks.
Another scam that these businesses have become quite fond of is to approach home owners with an offer too good to be true: complete installation of a rooftop solar system complete with a 20-year lease with little to no upfront cost for setting up.
The scam comes from the fact that, by agreeing, they give the company the power to place a lien or encumbrance on the property. That means the contract holder in question technically owns the entire property, not only the solar system. The money for the scam starts rolling in as the company begins demanding more and more money just a few short years into the agreement.
And not only one person is affected. For almost any scam to be effective, it must cast as wide a net as possible, reeling in hundreds of home owners into its web of lies. As soon as any one of them figures out what is going on, they are likely be too far in to get out of it without an intense and even more expensive legal fight.
This example is not even an isolated incident, nor is it simply the work of some devious outliers Reports have come in from thousands about one of the largest solar leasing agents in the country committing this very scam. And those are just the ones that understand what is going on.
The worst part of this scam is that it is incredibly unlikely that you will catch onto what is going on here. There are just two ways you will notice if you are a victim of this particular scam. Either you will accidentally default on the lien that you weren’t even aware you had (wherein you can only hope that common sense would do the math from there), or when you try to sell your house and basically run into the same issue.
One solar contractor has used the above methods to become quite successful, netting almost 100.000 customers over 14 states. They promise these people, who would alternatively pay around $300 a month, with the prospect of less than half that number for the next 25 years.
Only for their customers to discover less than two years down the road that they are now having to pay twice the amount they would be paying for energy if they hadn’t bothered at all.
Many customers have complained of faulty equipment or installations, forcing them to pay more to get it fixed, only for it to break again not too long later. The contractor then seeks out the assistance of any local real estate broker to basically talk them up, further advancing the fraud about them.
It is particularly devious because of the complexity of the type of equipment needed to run solar systems, making the typical consumer an easy target.
In a nutshell, solar leasing is simply too risky a gambit to be something close to worth it. Maybe it was when it started, but it has at this point become too rooted in corruption and scam artistry. This dilemma comes mostly from giving too much leeway to the contract holders and not enough to the consumer.
Solar Panels for Your Home: Solar Vs. Leasing
For the most part, buying solar instead of leasing is much better and more clean cut. You just buy the entire system, perhaps with a solar loan to help pay for installation, and that is more or less the end of it. There are scams, but they are less prevalent and have less room to fester and grow like with making a lease.
With regards to personal financial security, buying a solar system is the safer and more stable long-lasting option. There are not as many ways, in comparison to leasing, for the contract holder to deceive you out of what you paid for. No third party owns everything and can mess with you however it pleases.
You simply buy the solar system, purchase the installation, and that is the end of it. So when you are looking to be more eco-friendly by investing in a solar system for your house, just bite the bullet and pay for the whole thing, aside from whatever the telemarketers tell you.