From High Bills to High Savings: Why More Homeowners Are Leasing Solar

Many homeowners postpone (often indefinitely) transitioning to solar power because they are haunted by Uncle Bill’s 10-year old story about the unexpected lien on his home when he decided to sell, or 80-year old grandma Shirley who was fast-talked into taking on a $40K solar loan. Admittedly, there are far too many stories like these – but this certainly does NOT have to be yours!

Times have DRAMATICALLY changed, thank goodness.

There is a greater sense of urgency to empower more property owners (both residential and commercial) to become PRODUCERS of solar energy, rather than solely CONSUMERS of electricity as rates and surcharges continue to escalate. 

Homeowners are doing their part - buying electric vehicles, upgrading their HVAC systems, and being more conscious about the times of day they do laundry and run their dishwasher – all for the greater good of environmental sustainability and sincere care for the quality of life of future generations of children and their children’s children.

Today, with federal funding through the Clear Energy Act and further expanded by the Inflation Reduction Act, homeowners have more choices than ever before.

YES, you can absolutely purchase or finance your solar system and take advantage of the 30 percent federal tax credit. These two options can make more fiscal sense for many - especially those who tend to pay high taxes each year.

HOWEVER… 

Homeowners interested in solar energy can install solar panels without paying for the system upfront by opting for a lease (if in a municipal service area) or a power purchase agreement (PPA, if in SCE, PG&E or SDG&E service areas).

Both of these options allow homeowners to benefit from renewable energy while avoiding the initial high cost of purchasing and installing a solar system, making solar more accessible to a wide range of households.

When homeowners lease or enter into a PPA agreement for their solar system, the solar company owns and maintains the equipment installed on their property. The homeowner typically pays a monthly rate for using the energy generated by the panels, similar to paying a utility bill but at a lower rate than your local electricity prices. 

These arrangements usually last 25 years, and at the end of the lease term, homeowners may have the option to renew the lease, purchase the system, upgrade to a new system, or have it removed at no cost.

This arrangement allows homeowners to reduce their electricity bills— and carbon footprint— without dealing with the installation and maintenance costs of owning a system. And, by making this move, homeowners often realize up to 4 percent increase in their property value-– by choosing to make their home more energy efficient. 

The main reason homeowners choose this option is cost savings. Since the solar provider owns the system, the provider handles maintenance and repairs, eliminating unexpected expenses for the homeowner. 

Additionally, the solar provider is responsible for capturing any available tax credits or incentives, which helps offset costs on their end, ultimately leading to lower energy rates for homeowners — saving homeowners from steadily raising rates and varying service charges as utility companies deal with rising fossil fuel prices, transmission costs (did you know California imports most of its electricity from neighboring states?), and varying surcharges to mitigate damage caused by wildfires, etc. 

In both cases, leasing and PPAs allow homeowners to use clean energy, lower their utility bills, and contribute to a more sustainable future without a hefty financial commitment upfront or impacting their debt-to-income ratio.