Monday, November 3, 2014

NOW! Solar - Solar lease (PPA) or to own that is the question


Solar is finally coming into it's own record breaking presence on the energy market. The cost of solar cells has dropped an incredible 99% since 1977 http://www.the9billion.com/2013/10/07/the-cost-of-solar-cells-has-dropped-an-incredible-99-since-1977/ which has now made it affordable to even the average income household. The question we hear most often is should I buy solar or lease (solar PPA or power purchase agreement). In Washington State they offer up to $5,000 a year until 2020 plus no tax on installation or solar products. When combined with the Federal Rebate of 30% tax incentive one is looking at under a 5 year ROI which just about any local bank here in Washington will  loan on. Currently in the State of Washington one cannot collect the rebates on a lease financing scheme. I truly believe that the value add lies in the home owner or business owning their own #solar system.

You save more money by buying

There is more money to save (in the long run) if you purchase a solar system in cash. As the owner of the solar system, you receive all the rebates (in some areas up to $6,000 per kilowatt), the 30% tax credit and the additional SREC income that your new solar panels produce.
Loaning is usually wiser than leasing. Most homeowners finance their solar panels through a home equity loan or a second mortgage. Many solar installers offer long-term financing at very affordable rates. If you were financing through a loan that is equivalent to a typical solar lease, you would be paying somewhere between 8-20% in interests (usually tax deductible).
Solar panels will increase your home value
How much is the big question. Here`s a rough estimation to give you an idea of what quantities we`re talking about: A solar system that is producing $1,500 in annual savings with a prevailing fixed mortgage rate of 5% would increase your home value somewhere around $30,000 ($1,500/0.05).
A study conducted by National Renewable Energy Laboratory (NREL) concluded that homes with solar panels sell 20% faster and for 17% more money.[3]
A lease is not an investment
I often advice people to look at purchasing a solar system as a long-term investment. I want to emphasize that a solar lease is not an investment – you do not have ownership of the solar system itself (you have no assets). A solar lease is a long-term year commitment to 10-20 years of lease payments. When would you financially commit yourself to rent a home for 10-20 years?
Solar leases may reduce your home value
You will find leasing companies that advertise increased home value with their solar leases. In some cases this is true (homes with lower electricity bills tend to be worth more). However, a solar lease can also be a hindrance when you`re trying to sell your home. Finding a buyer that qualifies with excellent credit and agrees to assume your solar lease can be tough. Alternatively, paying yourself out of the lease can be very costly.
Why rent your power when you can own it. Call us today and let NOW! Solar show you how solar in Washington is a wonderful investment that you can be proud of. 
Call today 509-948-2449


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