To Lease or To Buy Solar? 02/25/2014 Would you lease a car or home improvement project for 20 years? Why would you lease a solar system? Research is essential before committing. Residential solar systems typically are deployed through either purchase or lease scenarios.
Both methods have their merits and we need financing vehicles that suit different pockets but it is important to fully understand the impact of each, not just personally, but how it affects the overall economy of Long Island. In a lease scenario, a national company will attract you through a web target program or a neighborhood canvasser. The lease program offers no upfront costs and a lower monthly payment to offset electricity for a term of 20 years. Expected saving are about 10-20% per year from your existing LIPA bill. The homeowner basically gives up control of their roof for 20 years, signs documents that are similar to a mortgage agreement, and will never own the system. Please consider if you will be in your home for 20 years and what you will be responsible for in the lease documents. The leasing company gets to keep the LIPA rebate and the federal tax credit and be able to depreciate the system over an accelerated period of time. The leasing company will create some jobs for salesmen, installers and processors, but the lions share of the work is done in the main offices typically off of Long Island. The profit from these projects is more importantly shipped to the Venture Capital money guys, also typically not local. So the Long Island homeowner never owns the system, saves a few bucks a month while the bankers and VC guys make out. Sound familiar? Now for the purchase program. A Long Island company that has a stake in your community will custom design a system that maximizes your rooftop while taking your budget and energy strategy into consideration. You will know exactly what equipment the contractor is using and can be sure that the team that installs it will be the same guys that will service it. We can provide you with many financing options that will allow you to own the system by allowing you to use the energy you produce to pay for the system and no upfront costs as well. The homeowner gets to either keep the LIPA rebate or assign it to the contractor or supplier. The homeowner also gets to keep the state and federal tax credits. In a reasonable amount of time (with current rebates and incentives 5-9 years depending on the system) the homeowner owns the system outright. The homeowner is free to re-invest those energy dollars every year in our local economy, creating more jobs and more importantly keeping the money for Long Islanders on Long Island. SUNation Solar has installed over 1,000 solar systems on Long Island. In fact one out of every seven solar arrays you see on Long Island are part of our solar family. These families, and their decision along with the thousands of other purchased systems on Long Island, are making a difference in our energy dependency and the economy of Long Island – your island. We in the solar industry subscribe to the theory that all solar is good. In January 2013 LIPA allowed third party leasing on residential solar systems and the national solar companies came in hard and fast, very much like the gold rush in the old west. Easy money!! In 2013 LIPA had no less than 15 micro drops in the rebate program and depleted the rebate program funding in September due to the overwhelming pressure from national solar leasing companies. Some funding was restored in October but the damage was already done. The nationals have had a strong presence in Albany this year and pretty much silenced the Long Island contractors repeated claim that the leasing and purchase rebate pool should have been separated as leasing clearly does not need the same incentives as purchasing to work. The moral of the story here is when you are making a commitment for 20 years and tens of thousands of dollars you owe it to yourself, your family and your neighbors to do your research. Allow a reputable local contractor the opportunity to show you all of your options from equipment to financing. Leasing may in fact be the best vehicle for your solar project but have all the facts first and for goodness sake read the fine print – the devil is in the details as they say. – – – – Written by Scott Maskin, president of SUNation Solar Systems in Oakdale and Southampton Contact Scott at [email protected]