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SunPower Logo
  • commented 3/13/14
  • tags: FSLR SPWR
  • On the surface, getting a solar system on your roof from a solar leasing company for no money out of pocket might seem like a great deal, but here are the facts behind this type of rental financing. When you sign that solar lease contract you'll be forfeiting the 30% federal tax credit which can typically be worth about $3,500 to $10,000. You'll also be forfeiting any applicable cash rebate or other financial incentives. After collecting both the 30% federal tax credit and any cash rebate, the leasing company will also apply accelerated depreciation. Despite applying all of the financial incentives, on a $0 down 20 year solar lease, the leasing company will then charge you 20 years worth of leasing payments that many times will include up to a 2.9% annual payment escalator that will raise your monthly payment, every year for twenty years.
    The leasing companies will try to convince you that a solar system requires a lot of maintenance and expensive insurance and costly monitoring when nothing could be further from the truth. Modern grid tie solar system require little to no maintenance and the bulk of any repairs are covered by the manufacturer's and installer's warranties. Solar panels and many inverters come standard with a 25 year warranty. Insurance can be added through your homeowner's insurance policy with little to no increase in your premium and many solar systems come standard with built in, web based monitoring.
    The bottom line with insurance, repairs and monitoring is that a leased solar system will typically cost you up to three times more than a purchased solar system, so it is actually you who will be paying for these services, not the leasing company. The leasing companies will try to convince you that these services are free but with a system cost that's triple that of a purchase, these services are absolutely not free.
    The leasing companies will try to convince you that a purchased system requires a lot of upfront costs and that their rental financing is the only $0 down option in town, which again is not true. There are plenty of $0 down loans available that even offer tax deductible interest and require no upfront costs. Solar leases and PPAs do not offer tax deductible interest.
    What's worse is that after paying 20 years worth of leasing payments that amount to triple the amount that you could have paid if you purchased your system instead, you won't even own the solar system. It will still be the leasing company's property. If you want to own it after paying your lease off, you will still need to buy it from the leasing company at fair market value. All this for only a 10 to 15% reduction in your electric bill. This is just the tip of the solar lease and PPA iceberg. For more information simply search the term solar lease disadvantages in any major search engine. There's a lot you should consider before signing that airtight 20 year lease contract

    Good luck ever selling your home with a solar lease or PPA attached to it. What potential home buyer will want to buy your home and take over your lease payments on a used solar system when they can own a brand new system and keep the 30% federal tax credit for many thousands of dollars less than your remaining lease payments. [ less... ]
    On the surface, getting a solar system on your roof from a solar leasing company for no money out of pocket might seem like a great deal, but here are the facts behind this type of rental financing. When you sign that solar lease contract you'll be forfeiting the 30% federal tax credit which can typically be worth about $3,500 to $10,000. You'll also be forfeiting any applicable cash rebate or other financial incentives. After collecting both the 30% federal tax credit and any cash rebate, the leasing company will also apply accelerated depreciation. Despite applying all of the financial incentives, on a $0 down 20 year solar lease, the leasing company will then charge you 20 years worth of leasing payments that many times will include up to a 2.9% annual payment escalator that will raise your monthly payment, every year for twenty years. The leasing companies will try to convince you that a solar system requires a lot of maintenance and expensive insurance and costly monitoring when nothing could be further from the truth. Modern grid tie solar system require little to no maintenance and the bulk of any repairs are covered by the manufacturer's and installer's warranties. Solar panels and many inverters come standard with a 25 year warranty. Insurance can be added through your homeowner's insurance policy with little to no increase in your premium and many solar systems come standard with built in, web based monitoring. The bottom line with insurance, repairs and monitoring is that a leased solar system will typically cost you up to three times more than a purchased solar system, so it is actually you who will be paying for these services, not the leasing company. The leasing companies will try to convince you that these services are free but with a system cost that's triple that of a purchase, these services are absolutely not free. The leasing companies will try to convince you that a purchased system requires a lot of upfront costs and that their rental financing is the only $0 down option in town, which again is not true. There are plenty of $0 down loans available that even offer tax deductible interest and require no upfront costs. Solar leases and PPAs do not offer tax deductible interest. What's worse is that after paying 20 years worth of leasing payments that amount to triple the amount that you could have paid if you purchased your system instead, you won't even own the solar system. It will still be the leasing company's property. If you want to own it after paying your lease off, you will still need to buy it from the leasing company at fair market value. All this for only a 10 to 15% reduction in your electric bill. This is just the tip of the solar lease and PPA iceberg. For more information simply search the term solar lease disadvantages in any major search engine. There's a lot you should consider before signing that airtight 20 year lease contract Good luck ever selling your home with a solar lease or PPA attached to it. What potential home buyer will want to buy your home and take over your lease payments on a used solar system when they can own a brand new system and keep the 30% federal tax credit for many thousands of dollars less than your remaining lease payments.
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