Solar system owners save significantly more money over the lifetime of their system than those who lease or sign a power purchase agreement (PPA). While all financing options will cut your electricity bill, at least temporarily, lease and PPA subscribers often complain about being locked in, no matter how the energy market fluctuates. Owning your system puts you in control.
The price of electricity from your utility is high because they own the electricity and can charge what they want. The same goes for a solar system that is leased or under a PPA; while it is on your roof, it isn't your property, so you don't get the extra benefits of owning your electricity. When you allow someone else to own the system, they keep all the profits designed to encourage people to own solar, which, over the long lifetime of a solar system, become huge.
Under the right conditions, financing your system can provide positive cash flows every month. In many cases, your loan payments will be less than the amount you save on every electricity bill, meaning more money stays in your bank account every single month. Plus, once the loan term is up, your solar system will still be producing electricity, for free!
The reasons are simple however. The savings on your electricity bill, with cleaner, less expensive solar power, more than offset the loan payments that finance your solar installation.
When you purchase a solar system, you're eligible for a federal tax credit up to 30% of the cost of your system. Your state or local utility may offer additional incentives, like in MA up to 15% of your system's cost (capped at $1000), cutting the price tag even further. When you finance with a lease or PPA, you don't get those incentives, the financing company does.
You'll pay a fixed monthly rate for your solar loan that will never increase. In contrast, leases and PPAs often contain fine print "escalator" clauses that make your monthly payments go up every year, just like your utility bill! This feeling of being locked in by leases and PPAs is one of the most common complaints about solar.
In general, solar loans are 10 years, and solar system warranties are for 25 years, with actual lifetimes much longer than that. So, once you pay off the loan, all of the electricity your system produces is completely free. With a lease or PPA, you never stop paying for your solar energy, and once your term is up, they come and take your system.
In some states, utility companies are required to produce a certain amount of their energy portfolio through renewable sources. To meet these numbers, they will buy solar renewable energy certificates (SRECs), representing 1 MWh of solar energy produced, from you. Typical home systems can produce 6 or 7 of these a year, which sell for hundreds of dollars each. With a lease or PPA, the financing company earns these SRECs rather than you.
When you own your system, utilities pay you for the excess electricity your system generates and puts back on the grid. Of course, with a lease or PPA, the financing company keeps those proceeds.
Homes with a solar system typically sell for $15,000 more. With a leased or PPA solar system however, the home becomes more difficult to sell, because the buyer either must commit to the rest of the monthly payments or you must buy out the remaining contract.
Because they have no moving parts, home solar energy systems are incredibly durable and virtually maintenance-free. Plus, all of our installers have product and performance warranties, guaranteeing the integrity and output of your solar array for 25 years.
Owning your solar system gives you: day one savings, lower monthly energy payments, growing equity, and ease of mind.
Find out more about a loan from your bank!
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