The great news is that it can cost practically nothing to lease your solar panels. Companies are offering to install and maintain your solar system for as little as $0 down in exchange for providing your rooftop for their panels and paying a monthly lease fee. Typically, the lease agreement payments are less than or equal to the amount you are currently paying your traditional utility company.
Over the course of your lease, commonly 20 to 30 years (often as long as the lifespan of your solar panels), you will see the lease payments slightly increase as time goes by. Many solar energy providers offer a payment cap unlike regular energy providers. As the cost of utility rates continues to climb for your neighbors, you will be able to save cash.
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As with any business, the fine print is always important to read. Every company offers different details with their lease agreements. Some will provide an option to purchase in the future while others will never give you an option to buy your equipment. Maintenance and installation fees will be taken care of by the solar provider. However, the amount you will pay for these services can vary greatly between companies. Obtain numerous quotes from a variety of solar energy providers to ensure that you are getting the best options for your property.
When the Contract Ends
Certain companies will allow you to sign a new contract or upgrade to the latest and greatest solar technology once the 20 to 30 year initial lease agreement ends. Other companies will request their equipment back once the lease is over and some may offer you a contract renewal between 1 to 10 years. Typical solar leases do not allow customers the option to purchase the solar equipment once the lease is finished; however, be sure to ask each company specifically.
What is the Rate Increase Cap?
Standard energy rates rise approximately 2 to 5% every year. The lease agreement commonly contains a rate increase cap around 3% so that you will be able to budget for your monthly payments. However, this cap can range between 1 to 5% for leases so again, check the final numbers with each quote you receive.
Moving Prior to Finishing My Lease
Panels are often removed for no extra charge at the end of the term if you decide for some reason to switch companies or alter your energy provider. If you move during your lease agreement, you have the option of transferring the payments to the new owner. Conversely, you may wish to take the system with you to your new location and or remove it if the prior options are not viable.
Do Your Research
If you are planning on obtaining additional financial benefits from solar through tax incentives or rebates, leasing is not the option for you. As well, you will not be able to sell back any excess power to the energy company if you opt for a lease. However, having someone else responsible for all of your maintenance and installation can provide peace of mind.
Work out the different benefits of owning your panels vs. leasing them to see which route will be more beneficial for you. Either way, switching to solar energy will help lighten the load off of Mother Nature and enable you to feel fabulous about reducing your personal contribution of environmental emissions. The reasons to consider solar are much vaster than strictly financial. Discuss your needs, wishes and wants with each solar energy company to determine who will be your ultimate provider.
A lawyer never retires. So I would just say that I am not as active as I used to be. Now I simply dedicate myself to fishing, my hobby, and my grandchildren. For Business Finance News I write about legal aspects of mortgage policies, mostly regarding the rights of policyholders. I also have articles about personal injuries.