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Leasing Solar Panels

June 01, 2020

The switch to renewable energy has become the fashionable thing to do for environmentally conscious people and those who wish to cut back on utility bills at home or business. The sun is an ever-present resource, and this makes solar energy a sustainable option when compared to regular electricity. The regular grid has its conveniences but intermittent access in some places, and it is prone to frequent power blackouts.

Sun Solar Electric (SSE Inc.) is a comprehensive provider for electrical and solar projects for business, residential, agricultural, and industrial buildings in Northern California and the Bay Area. We firmly support going green for the sake of our planet, and that is why we make it easy for homeowners to switch to solar energy. If you wish to change from the regular grid to solar energy without committing too much, leasing is an excellent option, as you will see in this article.

Understanding Leasing Solar Power

Leasing solar panels is a lot like renting a car. You rent the energy produced without having ownership of the solar equipment or having the responsibility to maintain them. In this arrangement, you make payments every month for using solar energy produced by these panels. Some companies have the provision to buy after the leasing term expires, and you can negotiate a discount for this.

Notwithstanding the similarities between leasing a vehicle and leasing solar panels, these arrangements differ in several ways. Firstly, leasing vehicles don't accord you any savings, whereas renting solar panels is a cost-saving measure that keeps your electricity bills in check. Also, the lease on solar panels increases annually by a certain percentage of the full cost of the system. This industry term for this increase is the lease escalator.

The third difference is leasing terms usually last twenty years, while the average car lease is three years. Your leasing contract will outline how much you stand to pay for two decades, including the escalator increments. Knowing the full costs beforehand is much better than waiting to see the raises per year. Leasing solar power is convenient as you don't have to take care of the maintenance or other work that is needed to keep the system functioning optimally.

Advantages of Using Solar Power at Home

  1. Environmental Friendliness

The overall goal of using solar power is to keep a lid on greenhouse gases in the atmosphere. Solar power achieves this aim by reducing carbon dioxide levels and pollutants released into the air like nitrogen oxides. These pollutants are harmful to both fauna and flora, and have seen the adverse effects of climate change; we should all endeavor to do better to make the planet more habitable.

Also, solar energy saves on water as compared to geothermal power, which requires plenty of water to produce. We strongly encourage you to embrace solar power for your home rather than shelve the idea.

  1. Cost Saving

Solar power helps you save on the expenses for running your home by doing away with electric bills or at least reduce them considerably. Please note, the amount of savings made depend on many factors like power consumption in your home, the size and angle of the roof, whether leasing or buying a solar unit, etc. Our experts surmise that the number of hours of direct sunlight and how big the solar group also determines how much savings you stand to make on the whole.

  1. Diverse Usage

You can use solar energy in many ways, like powering a home that is not connected to the grid to produce heat. The construction industry incorporates solar energy into materials to enhance their power-efficiency. Solar power comes in handy in places with water shortages where it is used to distill water before entering the piping system.

  1. Solar is not Depleting 

California has beautiful weather, which means uninterrupted solar access throughout the year. Experts derive that one hour of sunshine during summer at high noon equals to the national electricity demand per annum.

  1. Continuous Innovation

Technology in the solar power industry continues to evolve at impressive speeds. Some recent innovations include nanotechnology and quantum physics, which are poised to increase effectiveness and efficiency. Making the switch now accords you the incredible benefits of these innovations once they enter the market.

Who Should Opt for Leasing Solar Panels?

As you can see above, leasing solar panels is an ideal method for people who wish to switch to renewable energy but lack the investment to install their systems. Leasing is also significant under these circumstances:

  • If you want to start using solar power immediately perhaps in a new build or other property
  • If you're going to reduce your electricity bills without worrying about maintaining the solar unit

Advantages of Leasing a Solar Power Unit

Leasing a solar power system comes with the following advantages:

  • Keep your electric bills lower by locking in your power prices
  • One-stop-shop method for people wishing to use green energy
  • Eliminate pollution that is associated with standard electricity
  • Guaranteed performance of the solar power unit
  • You don't have to pay a down payment for many leasing agreements
  • There is a power production guarantee, so your lease payments reduced if there is less power production
  • No need to worry about maintenance and repairs, e.g., if the inverter stops working

When to Lease or Acquire Solar Panels through PPA

There are many benefits to leasing a solar power unit for your home, but you must also consider many factors that would make such a move more feasible than other methods. Leasing is ideal if you:

  • Are mostly seeking to use renewable resources of energy and not very interested in maximizing the financial gains of having your solar panel system
  • Wish to stay away from the burden of maintaining or repairs for a solar panel system;
  • Don't qualify for federal or state investment tax incentives and you do not wish to postpone the next year to get these credits

Where Can I Lease a Solar Panel Unit?

As the quest for renewable energy grows, more providers are entering the market to offer residential and commercial buildings an alternative source of energy. Sun Solar Electric is experienced in all matters concerning solar power, and we have arrangements with clients who don't wish to make the full investment.

What are the Downsides of Leasing a Solar Unit?

The above benefits, notwithstanding, the decision to lease solar power is not always advisable. For instance, leasing power for a single-family home may not save you money in the long run. We advise clients to consider alternative financing options like getting a loan from the bank or applying for an FHA Title 1 loan. Power Purchasing Agreements (PPAs) come with the following disadvantages:

  • You will never own the system unless the provider allows you to buy after the lease expires
  • There is less return on investment as compared to financing your order with a personal loan
  • You cannot claim a tax incentive as the provider collects this from the government

Essentially, solar leasing providers are merely taking advantage of the many incentives given by state and federal governments to promote the adoption of green energy. These providers get subsidies and turn impressive profits by leasing solar power to the masses at a commercial or residential level. These incentives can quickly add up to more than 50% of the total unit value, and they all go to the solar provider.

If you finance a system, you can get a 30% Federal Tax Credit as an incentive for investing in green energy. You will then apply that credit to the traditional loan or other financing option to speed up the payment plan. When you look at things in the long haul, leasing a solar system is not the best financial move.

Also, selling your property may become harder if you have a solar lease agreement in place. Prospective buyers have to take up payments for the remainder of the term until the lease expires. They have to pass rigorous credit checks on top of the usual procedures when buying a home. The situation is different from owned panels, which increase the home value; leased panels complicate things. Buyers may require you to buy out the lease before they sign off on the deal.

When Buying a Solar Panel Unit is Better

After seeing the advantages and disadvantages of buying a solar power unit, you may still not be clear on what move to make for your family home. Sun Solar Electric endeavors to provide expert advice to clients, so they make the best decisions for their unique situations. It is better to buy a solar system if:

  • You wish to maximize the financial gains of using a solar panel system and not just protecting the environment
  • You qualify to curb your federal and state tax liability by applying for the federal investment tax credit
  • There is an enterprise that can earn tax benefits by classifying the solar unit as a depreciable asset
  • You wish to increase your home's value in time for offloading when the market is agreeable

What are the Steps to Installing Solar Panels in Your Home?

There are numerous benefits of having solar power for your home. Once you have decided upon leasing from a reputable provider like Sun Solar Electric, we can now look at the installation process.

  1. Energy Consumption at Home

How much power do you consume, and what is the average bill per month? The journey to using green energy at home starts with getting a clear picture of power usage by gather utility bills for the past six months. Factor in seasonal changes like winter versus summer, number of household members, increasing the square footage, etc. These estimates will inform the type and size of the solar system you need to lease.

  1. Understand Your Home's Energy Efficiency

We recommend conducting a home energy audit to determine which appliances consume the most power and how to get around them. Buying energy-saving light fixtures and weatherizing your home keeps the heating and cooling expenses to a minimal. Weatherizing means sealing air leaks and insulating the house to retain the heat during winter. The U.S. Department of Energy estimates this process reduces heating bills by 32%, which is roughly $400 per annum.

  1. Learn Your Home's Solar Potential

Before leasing a solar unit, determine your home's potential for direct and scattered sunlight. PV technologies are equipped to produce energy from both forms of sunshine, but direct sunlight is preferred. You can gauge the solar potential using satellite maps, irradiance data, remote assessment tools, or enlist mapping services.

Investigate the federal incentives in California then find the best solar system to suit your home's characteristics. Sun Solar Electric has expert solar installers who can conduct an accurate assessment and give suitable recommendations.

  1. Compare Quotations

The solar installation industry is booming with installers who promise to deliver at a fraction of the market rate. Leasing is a long term investment that has an enduring impact, and you, therefore, want to make informed decisions. Sun Solar Electric is highly experienced in installing residential solar systems for clients in California. Our professionals offer personalized service, including after-sale service, to ensure clients are happy with the results.

We advise you to compare quotes but only use installers with a proven track record and who are familiar with the intricacies of the process, like applying for building permits. Due diligence is a must as well as getting client references and looking for any legal problems the prospective contractor may have.

  1. Size of Solar Electric System

The installation experts will recommend the appropriate size of the solar unit as per the common factors like the amount of direct sunlight. You want a system that can efficiently convert solar to electricity, and this, too, affects the size we recommend. More so, the order must be tilted correctly to maximize sunlight absorption even during gloomy weather. The billing rates vary, but our experts will be on hand to share information for your area and explain how you can take advantage of net metering.

Find a Qualified Bay Area Solar Power Installer Near Me

California boasts year-round sunshine, which makes switching to solar power even more practical as compared to people living on the east coast. Once you decide to go to the solar power route, the next dilemma is whether to purchase or lease a system from a trusted provider. The environmental benefits are not the only considerations here; you also want to make sound financial decisions for your family.  

Sun Solar Electric has a proven track record of leasing solar power systems in Northern California and the Bay Area, and our clients can attest to our services. Reach us at 707-658-2157 to discuss renting a solar unit for your home.

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