Looking into a solar electricity lease. Seeking advise/information sharing..?
Looking at leasing to own option (15 year) on a solar photovoltaic panel on my roof. I am looking at low downpayment ($0 to $1000), but that comes with higher purchase price, and 3.5% annual rate increase.
Is such leasing a smart option? What factors should I consider before making a decision? What if I don't plan to own the house for the 15 years?
Thanks in advance!
I didn't notice an annual cost mentioned in your question. If the cost of the leased system is equal to the portion of your electricity bill that would be displaced, I'd say the lease is a good deal. Electricity has increased at about a 6% rate over the years, I believe.
You'll have to check the contract to see what would happen if you move. Possibly, the balance will be due in full, or they'll reposess the panels. Will they put a lien against your house on account of this, or are the panels themselves the only security?
Possible red flags:
- They pressure you to sign on the spot.
- They don't have the full contract handy.
- They are selling a future installation, and have no examples of their installs in your neighborhood.
- They want the deposit long in advance of the actual work being done. (There are many scams where you give a deposit, and you never see them again.)
- They do not have a physical office, where you can drop by and see stacks of panels, inverters, wire, conduit, tools, and other things necessary for an installation by a real company.
- There is no performance guarantee, but the price is fixed. If the deal is you would pay $x per kWh produced, great. But without a performance guarantee, they could put up a cheap, crappy system that hardly saves you any electricity, and you would owe on the lease for the next 15 years, on top of your regular electricity bill.
- There is no provision in the contract for what happens if the system breaks. What if they put up something substandard that breaks after a year, and produces no electricity thereafter? Is it your responsibility to get it fixed? Are you forgiven your lease payment until it is fixed?
Note that the lease-to-own scheme is not the usual way that people choose to get panels installed. With the exception of large corporations that put up on the order of a megawatt of panels, I know of no one who leases.
If this is a company that also does conventional installs (the homeowner owns it outright), and you are able to find references of their work in your area that you can visit, I'd be more inclined to trust them.
HOME-MADE: LOW COST august 2005 PHOTOVOLTAIC.
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