6-09-2015 Signing a Solar Lease? Here are Five Things You Need to Know
Solar leases have grown in popularity, and they continue to be one of the most popular solar financing options available. However, there are a few things you need to know before you decide if a solar lease is right for you.
You won’t get any incentives or tax breaks.
Because you don’t own the solar system, you won’t reap the benefits of the federal solar ITC or state incentives. All of the tax breaks go to the leasing company because it legally owns the system. If you can’t use the ITC or other state incentives already, leasing may make more sense than a loan.
You won’t have to worry about maintenance.
A well-installed rooftop solar system doesn’t require much maintenance in the first place. All you really need to do is spray it down with a garden hose a few times a year. However, if something goes wrong with your system, it’s on you to fix it. If you signed a solar lease, though, the company is responsible for sending someone out to fix it.
A solar lease may make it more difficult for you to sell your home.
Solar can be a good thing when it comes to selling your home. In general, homes with solar panels sell faster than homes that don’t. However, some homeowners have had difficulty selling their houses because of their solar lease. It seems that some homebuyers don’t want to deal with the solar lease even if it saves them money.
To remedy this problem, some homeowners paid off their lease early so they could sell their homes. Others were able to find buyers willing to take on the solar lease. However, one thing to keep in mind is that the leasing company may have to approve the potential homebuyers’ credit score. Most people who qualify for a mortgage will qualify for a solar lease, but that’s not always the case.
You’ll probably have your solar lease for the long term.
Most solar leases last between 15 and 20 years. Some people opt to pay them off early and own the solar panels, but most people are content to hang onto the lease until it’s up. If you’re fine with making monthly payments on your lease for the next 15 or 20 years, go ahead and get a solar lease.
You need a good credit score.
Just like qualifying for a mortgage, qualifying for a solar lease takes a pretty good credit score. Most financing companies like seeing a FICO score of 700 or better. However, you may be able to get a solar lease even if your credit isn’t that great. Your best option is to contact a few solar financing companies and determine if you qualify for a solar lease.
Do the Math
In some cases, a solar lease may actually make more financial sense than a solar loan or simply buying the panels with cash. Before you make your final decision, be sure to crunch the numbers and work out which option is best for you and your financial goals. Going green is great for the environment, but it’s even better when it helps your wallet.