Solar Solutions

In recent years, many solar companies have shifted their focus to leasing solar photovoltaic systems and it has become increasingly popular for consumers. In fact, more than half of all new residential solar installations were financed and owned by a third party in 2012, and many industry experts expect this number to increase in 2013. As a result of its popularity, marketers are spending their budgets promoting solar leases and the market has been flooded with “Zero Down” advertising and sometimes confusing claims.

Once someone has made the decision to investigate solar, they come to us with many questions, and are especially interested in understanding about solar leasing. They want to understand how leasing works and figure out if it makes sense for them. Since so many people have been confused by the mixed messages in the media, we decided to discuss the pros and cons of leasing a system in hopes that the choice to lease or buy will become more clear.

First, let’s go over the basics of a solar lease. A solar lease allows you to rent a solar system from a leasor by paying monthly payments for a certain amount of time. Typically, most lease agreements are for terms of 20 years. Once the lease term is up, one may have the option of renewing the lease, removing the system or purchasing it at fair market value.

The biggest incentive for leasing is that your monthly payment may be less than the amount you previously paid to the utility company, resulting in immediate savings the moment your system is turned on. Additionally, you will continue to realize savings throughout the entire lease term as electricity rates continue to rise and your home benefits from solar energy instead.

Another pro is that the lease provider will take care of the maintenance for twenty years because they are the owner of the solar system. On the other hand, since you are not the owner, you will not receive any rebates, incentives and RECs (renewable energy certificates) associated with your solar system. Instead, they will go to the lease provider.

At the end of a twenty year lease, the final cost of the system for the user is about 2-3 times more than the cost it would require to install and maintain your own solar panels. This is what makes the leasing process so lucrative for providers and explains why so many companies are happy to finance your solar with a lease product.

That said, leasing companies guarantee the solar panel performance for the entire lease term, so you can rest assured that you will be powering your home with solar energy for the next 20 years with no maintenance or repair costs. Also, they usually keep track of production by installing an online monitoring system. If you are a tech geek, you will enjoy checking in online to see how much energy the solar panels produce.

One of the biggest disadvantages of leasing a solar system is that it will complicate and perhaps halt the future sale of your home. If you resell your home before the lease term is over, you must either convince the soon-to-be owner to take over the solar lease (and hope that they will qualify the credit review) or pay off the lease yourself before selling (and hope that there is no penalty for pre-payment).

In summary, leasing is a good way to go solar if improving your immediate cash flow is your goal or simply going green is paramount. If you want a better investment value, then purchasing the system will provide the best results, especially if cash flow is not the primary objective. We offer all types of financing (including leasing) and we’re more than happy to explain and discuss the details of financing options.

Patrick Redgate, AMECO’s CEO and President, was recently interviewed by Solar Industry Mag. In the article, Nora Caley discusses a report released by Lux Research that goes over the solar panel oversupply issues in China and the current health of individual solar companies. After reviewing the past year, she turns to solar experts to get their opinion on the future of the industry.

Redgate responded with the following, “What I think is going to happen this year is there is going to be a shakeout . . . we are going to see who comes out the other end, and it will be either manufacturers committed to staying with this business or manufacturers who have technology that is superior.” He also comments on how competition from other energy sources will affect solar and shares his prediction for the continued growth of residential solar installation.

For more, please visit Solar Industry Mag to read “Coming Soon: Solar Profitability.”

On Friday, May 17, AMECO employees joined a large group of government officials, local residents and members of the solar community to celebrate the Mendoza family’s solar installation.

The family was the sixth on the street to benefit from California’s Single-family Affordable Solar Homes Program, which aims to provide low income families with solar energy.

“California is number one in its production of solar energy and we’re number one in our commitment to it,” Governor Jerry Brown said during his speech.

Other government officials, including Long Beach Mayor Bob Foster and California Assemblyman Steven Bradford, commemorated GRID Alternatives for arranging the solar installation in North Long Beach. As the manager of the SASH program, the organization has installed almost 8.5 megawatts of renewable energy for over 3,000 families during the past 9 years.

The family watched with pride as a team of trainees from LA Trade Tech worked alongside seasoned solar workers to install the solar panels on their roof.

Thanks to GRID Alternatives and SASH, the new solar system will reduce the family’s monthly electric bill by 90% and allow them to redirect the savings to other expenses. While they are thankful for the financial benefit, they are also excited that the PV panels will reduce their carbon footprint.

Last week we wrote about how to choose a trusted solar contractor by checking professional credentials, customer references and online reviews. This week’s article will go over the importance of hiring a company that focuses on solar installation in addition to seeking out trained solar professionals and quality products.

Every few years, we see an influx of people trying to get into the solar business. For instance, your general contractor might add solar installation to their services or the local roofing company will start selling solar panels. One time a customer even told us that their real estate company was getting into the solar business! Beware of these types of companies; it’s very likely they will not have the proper training and experience. Since solar installation can be quite complicated and there are many different rules and regulations, it is best to find a firm who is solely focused on solar.

We also recommend going with a locally-based company. They are usually familiar with your city’s building codes and inspection procedures, so they will most likely provide you with a higher quality installation and better service in the future.

In nearly 40 years of business, we have seen a lot of solar installation companies come and go. If a company shuts down it can result in a variety of issues; it is possible the terms of your lease might change or you won’t be able to solicit them for any future maintenance. By choosing a company that’s been installing systems for at least 10 years, there is a better chance that they will stay in business for as long as your solar system is producing energy. You can look this up by going on the CSLB website.

Pay attention to any other contractor’s licenses they have opened in the past. Many people will claim that they have been in business for 20 years but it’s possible those years were spent as a roofer, burglar alarm company or other trade, and they just recently started installing solar panels last year.

Of course, it’s important to hire trained solar professionals to work on your solar system. First, if a company has C46 solar contractor’s license, then you know they have gone through special training. Second, make sure that they do not subcontract any part of the job. Ask them once, ask them twice, and get it in writing. You really want experienced, solar installers up on your roof instead of someone who was hired for just a few days of work.

Finally, there are some companies who have one or two pre-packaged solar deals that they offer to everyone. However, since energy usage, roof space and location vary so greatly from project to project, it’s better to choose a solar installer who offers a variety of products from reputable brands (like SunPower, Sharp, and Bosch/Aleo to name a few). Then, the company can tailor the solar system to your needs and, ultimately, provide you with a higher performing array that will better fulfill your expectations.

Deciding to invest in a solar system is a huge decision and long-term investment. Hopefully, this guide will help you avoid a fly-by-night operation and find a trusted solar installation company who will provide a smooth transition to using clean, renewable solar energy to power your home or business.

If you haven’t already, read Part 1 of our “How to Choose A Solar Installer” series. Also, check out Troy Wolverton’s article  at the Mercury News website. He provides some great information about how to shop for a solar system and solar installer.