Leasing and power purchase agreements (PPAs), in almost every case we have looked at, are not in our client's best interest. We have heard many complaints from people about leasing solar panels because of the hidden fees and terms. Some of the so called "advantages" of leasing look attractive on the surface, but the caveats are hidden in the fine print.
Since you don't own the solar system, you don't get the solar tax credits, they do. The leasing company owns your solar system, usually for 20 years. Your electric bill will drop, but now you are sending slightly less than your electricity savings to the leasing company, instead of MECO. It's true, you are locking in a lower electricity rate for that 20 years, but all you have really done is shift who you are sending money to. When is the breakeven time period for a leased system? It's never! As long as your are leasing it, you are continuing to pay for it. Once the lease is up, what happens when the homeowner does not agree to the terms of the new lease? The leasing company will come out and remove the equipment. The question then becomes, who will make the necessary repairs to the roof when the system is removed? These are questions that the homeowner needs to consider before entering into any type of leasing agreement.
Having a lease can scare away homebuyers. If you decide to sell your home, the solar leasing company must approve the buyer. If the solar leasing company doesn't approve your buyer, POOF, the sale falls out of escrow. Furthermore, if the buyer's lender doesn't approve the new debt to income ratio, that the solar lease ads to the debt, POOF, your buyer is gone. The risk ratios for qualifying a buyer are very important to the lender and the added solar lease can sometimes disqualify the buyer, if their debt ratio is already high. Also, even if the buyer is approved and the buyer doesn't want a leased solar system, they are offered a purchase price for the system, which is also usually far over market price. Sometimes, the leasing company will offer the buyer a cost to remove the system, again at a ridiculous price. The buyer can get frustrated and walk away from the deal and your house doesn't sell. Owned solar PV systems raise the value of your home, more than the cost you pay to install it. Leased systems can actually lower the value of your home. Read more about leased PV real estate pitfalls here.
Leasing companies like to highlight the fact that they will "maintain" the solar system for you for that 20 years. Seriously? There are no moving parts and the panels & inverter have a 25 year warranty! (at least our products do) The promise of no upfront costs and low financing sounds great, but the truth is in the fine print.
In order to truly benefit from a photovoltaic system, the homeowner needs to make an affordable, one-time investment that continues working for decades to come. This is why, we don't offer any leasing or PPA programs. Instead, we offer a simple low 2.99% APR loan program to our clients, so that they can reach a break-even time period quickly, by using the enormous solar tax credits.