Your Local Electric Rates
Finally, you must factor in what your electric company charges and its rate structure. Todays U.S. average cost of electricity is predicted to rise in the short-term by 3% each year. Then, you guessed it, energy prices are likely to continue rising incrementally.
Speaking of average, the average energy consumption in a U.S. household multiplied by the average electric rate per kilowatt hour equals an average American monthly electric bill of $113.20.
How Much Will My Electric Bill Be With Solar Panels
Recent research from the Rocky Mountain Institute shows that monthly electric bills for a typical home in Westchester County, New York may rise to $350 a month by 2030.
Yet, the same household may spend $260 or less a month if theyve installed solar panels and battery storage. The time for solar is now.
Going solar can reduce your electric bill dramatically, to the point where its not a significant player in your monthly budget. Some fortunate homeowners can even eliminate their electric bill.
The Demand And Supply Of Solar Sites In An Area
Its no brainer that the forces of demand and supply have a significant effect on the price of any item. This is no different in the case of solar farm lease rates. If the need for ideal sites is higher than its supply, the price of a lease will rise.
The availability of suitable land for solar plant installation may be affected by various factors, including natural land constraints. For example, if we consider a place like Florida, the area is full of wetlands.
Also, the insurance rates are incredibly high, especially near the coastlines. On the other hand, a place like Virginia has a mountainous western part, while the eastern side is urbanized.
All these limits the amount of available land that can fit large solar farms. Also, areas where solar installations started long ago, can experience a shortage of land.
Thats because the best land may already have been taken. When the supply is less than the demand, the solar farm lease rate will, in most cases be high.
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Why Lease Your Land With Oya Solar
OYA Solar works closely with landowners to create a long-term partnership that rests upon honesty and reliability. First, we assess the suitability of the land for solar at no cost to the landowner. Next, we work up an agreement based on the landowners needs for the land and how much will be used in development. The land lease details are discussed with both landowners and their legal counsel until they are comfortable with every aspect of the agreement. In taking the time upfront to put your concerns to rest, we can set the project up for success.
You May Be Forced To Drop The Selling Price To Pay For The Lease
If you cant get the person who wants to buy your home to take over the lease, you could reduce the selling price of the house to cover the amount they will have to pay until the lease terminates. Thats assuming you dont want to take it with you to your new home or buy the equipment, and you cant afford a buy-out.
If the lease still has a way to run, the price reduction could be substantial, impacting your ROI negatively.
Another option could be to continue paying the lease while the new owner gets the benefit of the solar equipment. And that is not an option anyone is going to like unless the lease is nearing the end of its term. Even so, it doesnt make financial sense.
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Leased Solar Panels Do Not Add Value To Your Property
Leased solar panels are excluded from property appraisals. This means that they are not an asset, which, in turn, means that if you lease your solar panels, they wont help you earn more money for the sale of your home.
Once you have paid the lease, unless you then buy the old system, you will have no asset to show for your long-term spending.
This is one compelling reason why many purchasers dont want to take over a solar lease when they buy a house. Its not that they dont want solar power, they simply recognize the benefits of owning the equipment.
Tax Credits And Incentives
One of the biggest disadvantages of solar leases is that you dont get to take advantage of certain solar panels, most notably the federal investment tax credit – which will save you 26% of the total cost of the solar panel installation costs.
This is because even though the solar panels are on your roof, you dont own the solar panels. Instead, the solar installer you are leasing with gets the benefit of the tax incentives and rebates, not you.
When you buy solar panels, you own them, so you will be able to take advantage of the federal tax credit, solar renewable energy credits , plus other utility and state incentives.
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Alternative Uses Of Your Land
The economic value of your land hinges on what the highest revenue-generating use of your land is. If youre a farmer, you probably have a good feel for what you can earn from that. That sets an anchor for any lease offer a developer makes to youthey have to match or beat it for you to consider leasing your land to them. A good developer will do their research on properties in your area and make you an informed offer accordingly.
Of course, if you own a financially successful vineyard in California or your property sits on an oil field, for instance, it is unlikely that a solar developer will offer you more for your land than youre earning today.
Keep in mind, however, that solar lease paymentswhich are guaranteed, and in some cases rise over timeoffer predictability in income that agriculture, mining, timber, or revenue from other uses may not. Even if you could earn more from one crop today, that may not hold true for the next 20 years. We saw this with the recent trade tensions with China, where demand for soybeans suddenly plummeted.
Selecting Land For Solar Farming
We seek out suitable land for solar farming and do a preliminary screening for proximity to substations and three-phase power lines, among numerous other factors. Although there is a preference for cleared, level land, we find creative, smart solutions to many challenging terrains.
Unlike brokers or land agents, we only offer leases for land we are committed to develop for a solar project and have thoroughly assessed. An OYA Origination Specialist will walk through the land lease or purchase agreements with you and in some cases, does a site visit.
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Savings Over The Years
Often, the lease for solar panels costs approximately what your energy bill would cost per month, so there may not be significant savings in the years to come. If you can get a reasonably accurate estimate, though, you can cross-check this with your average monthly energy bill and see how much of a difference there may be.
What Are The Terms Of A Solar Lease
Each solar lease contract is different, but the basic terms tend to be similar.
Solar lease term lengths are usually between 20 and 25 years, which is about the lifespan of solar panels. The solar developer will usually offer a solar monitoring program for your smartphone or online so you can track how your solar panels are performing. You can learn more about various solar monitoring programs here.
The developer will also be monitoring your system to ensure that it is working properly. If there are any issues with your solar panel systems performance, the solar company is responsible for repairs at no cost to you.
Solar lease contracts will include a price escalator to reflect the increase in the cost of electricity, which means your lease payment will go up each year. The escalator will usually be between 1% and 5%
And if youre thinking of moving, most solar companies will allow you to transfer the lease to the new homeowners, or you can break the lease and remove the panels. At the end of your contract, you can either renew the lease, have the panels removed, or purchase the panels at fair market value or at a price that is already outlined in the contract.
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Are Solar Panels Worth The Trouble
Lets get to the bottom line and help you decide whether solar panels are really right for you. In order to figure that out, you have to consider installation costs, average energy savings and sales price.
According to the National Renewable Energy Laboratory, the average cost of a solar installation is about $3.09 per watt for a 5.2-kilowatt setup. If you do the math, that comes out to $16,068 in installation costs. The cost could be quite a bit lower if your state or local energy company offers incentives for installation.
If youre worried about the maintenance costs that come with having solar equipment, you shouldnt fear. If you purchased or are making loan payments to the system, you own it, which means youre fully responsible for maintaining it. But luckily, solar equipment is known for its durability and has warranties, so you wont have to worry too much about maintenance. Leasing solar equipment has even less maintenance on your part because the company that owns the system is responsible for maintaining it. However, there are many apps you can use to track the performance and maintenance of your solar panel systems.
The good news is that adding solar panels could likely boost your home value. According to a government-sponsored study from the Lawrence Berkeley National Laboratory, the average sales boost from the average solar panel installation is about $15,000. That means that your solar panels would more or less pay for themselves upon the sale of your home.
How Does A Solar Lease Work
Once the solar energy system is installed, you get to use all of the solar power the panels generate. Instead of using electricity from your utility, your home will power itself using the energy the solar panels produce.
Because you are using solar energy instead of taking electricity from the grid, your electric bill will be lower. If the solar panels generate enough electricity to cover all of your energy usage through net metering, you could completely eliminate your electric bill .
But, youll still have to pay your solar lease payment. Usually, the lease payment will be lower than what your utility bill was before installing solar. So, if your electric bill is $150 per month, and your lease payment is $100, youre saving $50 per month with a solar lease.
Keep in mind though, that the solar system might not always produce enough electricity to cover your whole electric bill. Maybe there werent that many sunny days in a month, or you used way more electricity than usual. In these situations, you could end up needing to take more electricity from the grid to meet your power needs. Then, youll have both an electric bill and a solar lease payment.
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Connecting The Solar Farm To The Grid
Solar farms send power directly to the grid and become a source of power for local regions served by the same utility.
Before connecting the solar project to the grid, the utility will inspect the site to verify compliance with the Interconnection Requirements and Site Application. Once satisfied, the utility will connect the project to the local grid to generate power and the project is operation.
How Big A Solar Power System Home Depot Bp Solar Partnership No Installation Deals Here
Most solar panels are built from among 3 kinds of solar cells: monocrystalline, polycrystalline or amorphous silicon. Silicon is utilized for solar panels because it’s a resilient material that’s highly effective and easily available. Monocrystalline solar panels are the most typical and efficient kinds of solar panels offered. Due to the silicon’s high pureness, these panels stand out at producing electrical power and boast some of the greatest effectiveness scores on the marketplace.
These benefits come at a high cost point, so think about just how much you’re ready to invest if you have an interest in monocrystalline solar panels. Polycrystalline solar panels are a lot more efficient and quicker to produce. A streamlined production process ultimately makes these panels more economical than monocrystalline solar panels. While polycrystalline solar panels are more affordable, they do not generate as much power as monocrystalline solar panels do – home depot solar.
They’re likewise not as reliable in high-temperature or low-light situations.: Amorphous solar panels are made from a thin layer of silicon, which permits them to be more flexible and light-weight than monocrystalline and polycrystalline panels. Another benefit is that they carry out well in heats. They’re likewise one of the best photovoltaic panels for low-light conditions since they can soak up a larger variety of the light spectrum.
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What Are The Advantages Of A Solar Lease
- Lock in your power prices going forward
- Solar leases provide significant savings over your utility bill while eliminating pollution
- Most leases are $0 down
- Leasing is the simplest one-stop-shop solution for homeowners who want to go solar.
- Leases include a power production guarantee so if the panels dont produce a certain amount of power your lease payment goes down.
- The company maintains the system for the duration of the lease so if an inverter stops working, the company comes out to fix it.
Since the leasing companies are so large, they are able to take advantage of many special tax benefits that regular homeowners cant take advantage of, and these companies are then able to offer leases at a discount to residential buyers.
Planning A Solar Farm
We start by working closely with the landowner to ensure that we are respecting their needs for the property. From those discussions, we will choose the precise location of the solar project.
Then we work with the local towns and surrounding communities, along with the state or federal government authorities, to ensure the solar project meets all environmental requirements and standards.
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A Lease Is Personal Property And Not Real Estate
A lease is a personal property contract and doesnt apply to the home, which is regarded as real property. So, if you sell your home and dont want to take the solar panels with you, you will have to persuade the buyer to take over your contract.
While some buyers are willing to take over solar leases, there is no way of knowing in advance. Also, buyers will need to apply for credit before they take over a solar lease.
These factors can make a house more difficult to sell and might prolong the process.
8. A Solar Lease Can Make It Difficult to Sell Your Home.
Solar leases are seen as an obstacle by many real estate agents selling solar homes. We discovered that solar homes can sell 20 percent to more than 100 percent faster than those without solar. But if theres a solar lease in place, they tend to sell more slowly. This is primarily because they complicate the selling process.
In addition to my own stories above, here are a few examples of professionals who have found that a solar lease can make it more difficult to sell a home.
Janelle McGill, a Fort Collins real estate agent and consultant who offers free classes for agents, homeowners, solar installers, and utility companies, maintains that leased solar panels dont add any real value to homes. This is because buyers are sometimes unwilling to take over solar leases. If buyers do agree to a transfer and the process is delayed for any reason, it will delay and might even cancel a closing.
The Drawbacks To Solar Leasing
There are also a few important drawbacks to leasing a solar system instead of purchasing one. The savings you will experience in the long run will be lower. While buying a solar system upfront is expensive, the average payback period is between 6 9 years. For the remainder of its lifetime, your solar system will only generate a profit for you. And if you own the system, you can sell excess solar power back to the grid. If you lease solar panels, you will always pay a monthly fee with no end in sight and cannot take advantage of net metering programs in your area.
Leasing solar panels also means you wont qualify for tax credits. Youve probably heard that federal and state tax credits and incentives can help ease the cost of solar panels. In fact, the federal tax credit offsets 22 percent of the cost of a solar system. But if you dont own the panels, the credits wont apply to you. Instead, the solar leasing company that owns those panels benefits from tax credits, which are usually worth thousands of dollars.
Finally, if you choose to lease a solar system, selling your home could be much more difficult. The average solar lease contract can last up to 25 years. If you try to sell your home during that time, you may have some difficulty attracting potential buyers. This is because those potential buyers would need to assume your solar panel lease and have to qualify for the financing of the panels on top of the mortgage loan.
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