With climate change threatening the planet, constantly rising electricity prices hurting your budget, and solar photovoltaic (PV) technology becoming increasingly affordable and efficient there’s no better time to make the switch to a solar PV system. This guide will help you find the right system for your needs, but before anything it first asks you to take a step back and assess whether buying a system makes the most sense for you.
Solar power purchase agreements
After pricing out solar panels you may find that buying isn’t possible for you. Fortunately there are alternatives, such as a solar power leasing program or solar lease that allows you to power your home by solar without having to buy a PV system.
As long as you own a home and qualify, a third party provider such as REC Solar will enter into a contract with you to install and maintain a PV system on your property at no cost. Under a solar power purchase agreement (SPPA) they own the panels and charge you a set rate for the electricity that their system generates. A solar lease is the same except you pay a fixed monthly rate to rent the system regardless of how much power your panels produce.
To help you decide whether to buy or lease, read through this list of pros and cons in going with a solar power purchase agreement.
Free – First and foremost, the greatest benefit to leasing is not having to pay the substantial upfront costs of purchasing and installing a solar PV system (aside from possibly paying a small installation cost). But is it really yours? No. You can’t say you actually own it, but should you generate the funds at some point in the future you may be able to buy the system from them.
Predictable pricing – The two most common pricing options under these arrangements are fixed price and fixed escalator. You could choose to lock in at a fixed rate, which may result in higher initial costs, but can save you in the long-term as electricity prices rise. The fixed escalator alternative translates to a lower initial cost, with slight annual increases. Either option means you can count on a predictable electricity rate for years to come.
Minimal concerns – You neither have to worry about your system not performing up to par nor concern yourself with the complicated permitting process and installation and maintenance headaches.
Lack of ownership – You don’t actually own the system under this arrangement. And since it isn’t yours, you’re at the mercy of the contract and can’t do what you want with the panels.
Incentives – Government tax credits and rebates offered by utility companies go to the third party provider, not you.
Contracts – If you don’t like dealing with paperwork and signing contracts, this type of arrangement could cause aggravation.
Additional costs – Putting panels up on your home may raise your property taxes.
Check back next week for part 2 of this guide or join our free newsletter to download the entire guide>>[box]by UB Hawthorn[/box]