Solar industry studies show that for the first quarter of 2012 seventy percent of Californians who wanted solar power decided to either lease or use power purchase agreements. The trend continues across the U.S. with many homeowners deciding not to buy panels outright themselves but lease from companies large and small who offer these agreements.
There’s an upside and downside to all agreements. The upside for homeowners is there’s no upfront cost of purchasing panels and the installation. The downside is that many of these leases and purchase agreements are based on long-term contracts. If for any reason a homeowner wants out of the deal or wants to sell their home-legal complications will arise for the owner and the panel system provider.
The panel providers are large and small companies who buy panels wholesale from American manufacturers and Chinese importers. There is a rift within the solar industry created by the cheap Chinese panels. American panel manufacturers want to impose heavy tariffs on the Chinese but installation companies argue that the cheap panels allow homeowners to get a better and cheaper installation deal. Solar manufacturers in the U.S. are concerned the dumping of cheap panels will harm their industry.
One New Jersey installer claims that solar panel suppliers are dropping their prices on a daily basis in order to sell their inventory. He claims the drop in panel prices has allowed him to offer an installation at 30% to 40% less then two years ago.
The panel provider companies retain ownership of the panels and are responsible for the maintenance. They also take the tax breaks and any renewable energy credits the homeowner would’ve received. The homeowner pays the company a monthly fee for the electricity the panels generate.
In a slow economy this trend will continue as many homeowners don’t want to invest thousands of dollars in a solar system. Have your lawyer go over contracts that have long-term agreements. Discuss with the installer what the penalties will be if you decide to sell your property or if you want out of the agreement.
Details at the NY Times Energy & Environment.
2012 Year of Solar Lease and Purchase Agreements
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