Finance Or Lease Your Home Solar System?
There are lots of companies jumping into the business of leasing home solar systems. Some of them are huge corporations, like SunEdison and SolarCity. But are you better off signing a lease with one of these companies or using the equity in your home to finance the project yourself?
Matthew Wright is the executive director of Zero Emissions Australia. He says, do your own research before signing that long term lease agreement. Here’s why.
Wright claims that solar leasing companies are looking out for their own best interests, not yours. He writes in Climate Spectator, “For solar leasing to work, offering a guaranteed positive return from day one, the leasing company needs to size a system that is relatively small so that a bulk of the electricity is consumed directly on-site. Therefore solar leasing doesn’t lend itself to larger system sizes, which are better for economies of scale.”
Furthermore, Wright says, if you are locked into a home solar lease, you may not be able to add more PV capacity in the future if your energy needs increase. He argues that a homeowner would likely opt for a larger system than what the leasing company will want to install, because the costs of installation per kW are smaller when spread over more PV panels. And any excess would go back into the grid to benefit all electricity users — a gain for society as a whole.
Is Wright right? The answer is: it depends. He goes on to engage in a lot of financial calculations designed to prove his point. We all know that figures lie and liars figure, so you have to do your own research and determine what works best for you. The important point is that there are alternatives to signing a home solar lease with the first company that comes knocking on your door.
If you do nothing else, get quotes from at least two companies and compare what they are offering. Find out how much electricity your home uses today and match that up with what the leasing company says their system will provide. Ask questions about whether you will be able to expand the system in the future or make other changes you deem necessary. What if your roof needs repairs in the future? Who pays for that?
When you sign a home solar leasing plan, you are like the home owner who gives an energy company permission to drill for oil in the backyard. You are giving up control of a part of your property — in this case, your roof. Gather all the facts and think carefully before putting pen to paper.