Is Leasing A Solar System Or Going With A Ppa Better Than Owning One
Solar leases and PPAs are a wonderful option because they make it possible for almost any homeowner to go solar, even if they do not have any cash to purchase a system. However, many homeowners have found it is more beneficial financially for them to own their solar system because they can see a substantial return on investment.
If a homeowner decides to buy a system they not only save on energy costs as soon as the system is operational, but they also begin to generate profits from the excess energy their system produces and can take advantage of tax credits and grants. Plus they can sell their SRECs to earn even more income. In fact, on average a purchased home solar system generates a 125% return on investment in 5-7 years. By year 20, homeowners are earning a 500% return on investment.
Many of Solar Energy Worlds customers who own their solar system now pay $0 for their electricity due to the ROI it provides. To see video testimonials of homeowners who purchased a solar system and now have a net zero energy homes, click here.
Its also less difficult to purchase a solar system then many people think it would be. Buying a solar system is similar to purchasing a car. Most people do not pay cash for a car and most people do not pay cash for a solar system. Solar Energy World offers financing for purchase including an option where a customer can go solar for $0 down and just have low monthly payments.
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Free Doesnt Mean Free Or No
A solar company sales representative may inform you that by signing up for solar power, you wont have to pay for the panels themselves they will be given to you for free.
The trouble is that you will still end up paying each month toward a lengthy contract which could last up to a quarter century. Basically, a solar lease, or solar power purchase agreement , closely resembles a home mortgage in contract duration than it would an automotive loan. .
No Infrastructure Or Physical Equipment
Being a solar garden subscriber, you are not required to get physical equipment installed or build an infrastructure for obtaining solar power.
All the installations, upkeep, and repair work is the responsibility of the trained professionals hired by the solar garden operator.
It is good news for the renters, as they dont have to acquire prior permission from the homeowner. What they need is to subscribe to the community solar facility and minimize the utility expenses.
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I’ve Got Solar Thermal Panels Can I Get The Smart Export Guarantee
Unfortunately, no. The smart export guarantee is only available on what’s known as solar PV, which catch the sun’s energy and convert it into electricity that can be used to power household goods and lighting.
Solar thermal, which allows you to heat water and can cut down heating bills, isn’t covered. However, help is available for these types of solar panels under what’s known as the domestic renewable heat incentive scheme.
This guide shines a light on solar PV, as that’s where you can earn money by selling the electricity you don’t use back to suppliers, as well as save on your electricity bills. According to the Department for Business, Energy & Industrial Strategy, well over half a million British homes have panels installed.
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Can You Get Free Solar Panels
Well, unless your friend donates them to you, beware of any offers of free solar panels even if they are thrown in as a special deal from any company trying to promote themselves. Were not saying refuse them, but do a bit of homework first. Make sure you check the name of the company offering on the Better Business Bureau website. Better safe than sorry.
Will Free Solar Panels Save You Money
You may have various reasons for going solar. If youre like most people, saving money, eliminating your utility bills and/or reducing your carbon footprint are probably at the top of the list. The environmental benefits of going solar are more or less the same regardless of who installs your system, so its key to focus on the financial benefits.
Regardless of its do-good image, the solar industry is an industry like any other: the companies offering products are looking to turn a profit. Providers of solar leases make their money by selling you electricity, usually at a lower rate than what you pay your utility.
Although companies like SolarCity once dominated the market for solar leases, countless other players have since entered the space and begun competing with each other. Some solar leases will save you more money than others. You as a solar shopper can now take your pick of company based on their offer. So even if financial gain is secondary to environmental considerations for you, you should still shop around to make sure youre getting the best deal.
Interested in learning about your local solar options? By shopping on the EnergySage Solar Marketplace you can compare not only solar lease options, but also purchase and solar loan options. Sign up today to get quotes from solar installers in your area.
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Ways To Go Solar With No Upfront Cost
You have a couple of options for going solar without stumping up huge sums of cash upfront. And, with the right program, your monthly repayments will be lower than your energy bills.
Solar Leases and Power Purchase Agreements
A Power Purchase Agreement is where the energy company installs a solar system on your rooftop and sells you the energy that you use on a per-kWh price.
A solar lease is similar, in that the energy company carries out the installation, but your fixed monthly fee is based on an estimate of the amount of power that you will use.
For all intents and purposes, these types of agreements are the same, so in this article, we will lump them in together! How do you know if you should lease or buy your solar panels?
Use our guide on solar leasing vs buying to help you make the best decision.
So, are solar panels free when using a power purchase agreement?
This comes back to our definition of free! PPAs, along with solar leases, have many zero down plans, meaning that you do not have to pay an upfront cost. All you need to pay is your monthly payments.
You enter into a contract and rent the panels for a period of around 15-25 years. When the panels have been installed on your roof, you then purchase electricity off the utility company as described above. This rate is usually lower than the rate you would pay for your normal energy bills, bringing you savings in the long run.
These benefits go to the owners of the panels the leasing company.
The Answer To The Question: No
Solar energy is a time proven, clean and affordable source of electricity for your home. Recent improvements in the manufacture of photovoltaic panels used in the conversion of free, inexhaustible solar energy from the sun have made home solar power a viable option for many consumers, that is NOT A SCAM. Unfortunately, as with any industry, there are unscrupulous contractors and companies that have, at times, bloodied the nose of the home solar industry. Dishonest contractors and companies give traction to solar energy opponents, usually big energy companies that are protecting their own profits, allowing them to make exaggerated claims of risk associated with switching to home solar power.
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Forget Leasing How About Financing Your System Instead
The revolutionary thing about solar leases was that they made it possible for virtually anyone with a roof to go solar. Solar leases were crucial in removing barriers to entry back when solar system prices were prohibitively high.
But times have changed! Solar prices have plummeted in the last 5 years. and financing options other than solar leases have become viable. The most important of these is the solar loan. With our SolarBase Program, we can provide homeowners with $99 down financing options with 5, 7, 10, 12, 15 and 20-year term options along with the benefits of system ownership.
So before you sign up for the first free solar panel deal that comes your way, make sure you understand what youre being offered and that youve considered our SolarBase Program.
Solar Rating Is Irrelevant
If you want to install a rooftop solar array, it is necessary to know the sun score or solar rating of your property. This relates to the time for which sun shines on your roof. The solar rating also explains the intensity of the sunrays.
It helps to analyze how much power one can generate through a rooftop solar array. However, the subscribers of the community solar garden dont require any kind of solar rating.
As long as the solar garden receives the sunlight, you are good to use this facility.
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How To Avoid A Dodgy Install
Although there is growing pressure for the CEC to clean up these dodgy players in the solar industry, unfortunately for now it is buyer beware.
The good news is it has never been easier to find a reputable installer. Manufacturers are partnering with the industrys top installers as well as recognising the best of the best with awards.
Continuing with the example of LG Solar panels, Solaray Energy is one of a handful of installers that are Platinum LG Solar Authorised Energy Specialists:
We have also recently been recognised by LG Solar as the best installer in the country:
It takes a bit of time to research the top installers of the products you want on your roof, however conducting your due diligence can save you thousands of dollars, not to mention the time and stress of having to deal with an installer that wont help you if something goes wrong.
An Important Warning About The Solar Industry In 2021
The solar power industry is in a price war at the moment. Due to everything that is happening in the world, we are seeing a number of solar installers dropping their prices to win business.
You would think this would be a good thing, but its turning into an absolute disaster.
There are two main types of systems being discounted:
What Do Companies Mean When They Say Free Solar Panels
The terms free solar panels or no cost solar program are sometimes used to advertise solar lease or solar power purchase agreements . Under both types of arrangements, a company will put solar panels on your roof for no money up-front but will charge you for the electricity that they produce. Most offers will save you money but not all of them, so make sure youve thoroughly compared all your options. Also consider buying the solar panels or financing them with a zero-down solar loan.
So what do a companys marketers and salespeople mean when they say free solar panels or no cost solar program? Usually, they are referring to solar leases and power purchase agreements . Under these solar financing arrangements, a solar company will put a solar system on your roof at no up-front cost to you for installation, enrollment, or maintenance. This sounds great you get to say that your home is powered by clean energy, and can even point to the solar panels on your roof to prove it.
But the reality is that you do not technically own the system, and the solar energy the panels produce is not part of a no cost solar program. Under solar lease agreements, ownership is retained by the solar company, and you pay for the electricity it produces. In essence, the company has built a small power plant on your roof and is selling you the electricity.
What Have I Signed Up To With Free Solar Panels
If you’ve rented your roof out, you ought to be fully aware of what you’re involved with: you have entered into a lease contract with the company, and rented out your roof to someone else for 20-25 years.
We analysed a contract from one rent-a-roof company, and found issues with liabilities and provisions that were very much in favour of the company.
- The contract we saw stipulated that the householder would have to get consent during the term of the lease if they wanted to sell their house, or make any alterations or additions to the building near the solar PV system. This clause would apply to a loft conversion.
- If the panels needed to be removed for a period of time to do maintenance work on the roof, for example the householder would have to compensate the company for the missed FIT payments.
The lease stays with the property. So if you have free solar panels installed and want to sell your home within the 20-25-year lease period, you’ll have to find a buyer who is happy to take on the lease for the remainder of the contract.
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What Kinds Of Solar Loans Are Available
- Secured Loans
These are more affordable than unsecured loans as they have lower interest rates and are tax-deductible. However, this type of loan does use your home as collateral, so you need to be sure that you can pay off the money.
An alternative to a home equity loan is an FHA Title 1 Secured Loan. This has a government guarantee, and instead of repossessing your home if you do not make the repayments, the outstanding amount is paid upon selling your house.
- Unsecured Loans
Unsecured loans may cost more. This is because there can be additional fees, the interest is higher, and you have no access to tax reductions. However, similarly to credit cards and other loans, your home will not be used as collateral.
The penalty for non-payment is the negative impact on your credit rating.
- PACE loans
Property Assessed Clean Energy loans are a straightforward financing option that is available to residents of California, Missouri, and Florida. PACE loans differ from solar loans as they tax assess your property. Your payments for your solar system will show up along with your other property-related taxes on your tax assessment.
Homeowners can benefit from this type of financing because sometimes the first payment is not made for six months.
Your home is the only collateral on this type of loan . This means that they can be a little bit more expensive than other types of solar loan.
Similarly to PPAs, PACE loans are not available in all states.
No Such Thing As Free Solar Panels
CLAIM: You can get free solar panels installed on your roof!
FACT: Some companies offer solar panel installation for no money down, but its not exactly freeyoull be renting the panels, monthly, for the term of the lease, which is usually 20 years.
CUB RECOMMENDS: Explore all of your options. While leasing may make sense for some homeowners, buying your solar system outright could end up being much more cost-effective.
For several months now, weve been getting reports of door-to-door salespeople pitching free or no money down solar panels to homeowners all over Chicagoland. Sounds great! But are these offers legit?
In general, any company that says theyll install free solar panels on your roof is actually offering a solar lease.
Yes, the solar panels will be installed on your home for no money down, but you will have to pay the leasing company every month to lease the panels, and those leases typically last 20 years. Leases weve seen also include a provision allowing the company to raise the lease rate by 2.9% every year.
With a solar lease, you will never see a return on investment, and do not see the full benefit of the monthly energy savings. Most people will pay more over the lifetime of a solar lease than if they purchased and financed a system.
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