The city of Lancaster in Southern California has a great way to bring affordable solar power to its residents: leased solar panels. Through a recently unanimously passed plan and a partnership with SolarCity, Lancaster residents will have the opportunity to lease solar panels and reap the renewable benefits.
From what I can tell, the leasing of the solar panels will work like this: a company will handle evaluation of the viability of solar panel installation as well as the processing and permitting that follows. It is unclear whether the panels are installed by the company or if this sizable task is left to the homeowner.
Panels for a three or four bedroom home might lease for $110 a month, but electricity savings could amount to hundreds over the year. Apparently SolarCity is guaranteeing a home will save on the cost of their electric bill, even accounting for the cost of the lease, by making up any difference. Sounds like a good deal to me, but I wonder how this affects the lessor's bottom line.
Eligible residents must own their home and have a credit rating above 700 to qualify.
Could this be the business model to usher in widespread adoption of residential solar panels?
I actually work for this company and to clarify, SolarCity is a full service company and will send a vested employee to install the panels no matter if it's a lease or a purchase. Also, the bottom line on the lease works out because you are locking in your utility rates versus being susceptable to annual rate hikes.
I got a quote from Solar City on a solar lease and found out that after making the lease payment that I was only going to save about $10.00 per month on my $249.00 per month Edison bill. And even worse, I would not even own the system after making 20 years worth of lease payments. Plus I would not get the cash rebate or the 30% tax credit. The cash rebate and the tax credit would go to Solar City. And as electric rates go up so does your lease payments because in the solar lease contract they have a built in increase. Plus I read that if I ever go to sell my home that the buyer would have to qualify to take over the lease, if he even wanted to or I would have to pay a penalty if I wanted out of the lease. Solar City does sell systems, but their prices were way higher than several other dealers that I talked to. No solar City for me.
What other investment can you put 0 dollars down and get any kind of return on your money? Also, which home owner wouldn't want to take over the lease if it's adding value to your home and adding independence from the grid? People can still take advantage of the rebates with the lease, they just don't get the tax credit of the purchase. Even without the tax credit your ROI is still better with the lease.