Solar leasing is increasingly becoming an option for homeowners who don’t have enough capital to install rooftop solar panels. Some years ago, switching to solar energy was expensive, and most homeowners couldn’t afford the direct installation costs. However, solar leases have revolutionized solar panel installation.
By opting for a solar lease, homeowners in New Jersey aren’t limited by the upfront costs of purchasing and installing solar panels. However, while you don’t incur the upfront costs by choosing a solar lease, this might not be the best option for all homeowners looking to go solar. Ideally, homeowners should consult with New Jersey solar energy consultants, such as Solar Cents, to find a suitable option.
What is a Solar Lease?
A solar lease is almost the same as a motor vehicle lease. However, in this case, instead of making monthly payments to the dealership, homeowners submit the payments to solar developers. While homeowners don’t own the panels, they benefit from solar energy produced by the panel, which significantly cuts electricity bills.
By doing this, homeowners are ideally swapping the monthly electricity bills from their utility company for affordable bills from a solar leasing company. Solar developers often work with leasing companies to offer the lease. However, the installation company is tasked with designing, installing, and maintaining the panels. Homeowners should seek expert advice from solar energy consultants to find the best deals.
How Does Solar Leasing Work?
While the details of solar leasing programs vary, below are the basics;
- Homeowners contact a New Jersey solar leasing company.
- The provider visits the property to determine if it qualifies for the solar lease program. Solar developers often focus on the roof angle, access, and sun exposure to determine the legibility of your house.
- If the house qualifies, homeowners pay a deposit and sign a contract. Most contracts are between 10 and 30 years. If your state has solar incentives, you may not be required to pay the deposit.
- The solar provider hires a solar panel installation company and oversees the process.
Once the panels have been installed, homeowners start enjoying the power generated by the solar panels. Since most energy demands in your home are being met by solar energy, you will significantly reduce your energy bill. If the solar energy is enough to cover all your energy needs, you will totally rely on solar energy, eliminating your monthly electricity bill.
Note that you should remit monthly solar lease payments, which are significantly lower than standard utility bills. You should also note that the solar provider will collect all utility incentives and solar tax breaks.
Key Terms of Solar Lease
As mentioned, solar lease contracts differ. However, some of the basic terms are similar. Common terms include;
- A solar lease contract should be between 10 and 30 years. This period primarily depends on the lifespan of the solar panels installed. Most solar developers have an online solar monitoring program that allows homeowners to track the performance of solar panels.
- The solar developer also monitors the solar panels to ensure that they perform optimally. The solar company is responsible for ensuring that the solar panels perform well. Homeowners shouldn’t incur any cost.
- Most solar lease contracts include a reasonable price escalator, which reflects the steady increase in electricity costs. As such, you should expect a gradual increase in lease payments every year. The price escalator should be between 1% and 5%.
- If you vacate or relocate from the house due to unforeseen circumstances, you can transfer the solar lease contract to the new property owners or residents. They can continue making monthly payments, stop the lease, or remove the solar panels.
- You can renew the lease, remove the panels, or purchase the panels from the solar company once your initial lease expires. Most solar companies outline the fair market value for those who want to purchase the panels in the contract.
The Bottom Line
Even though the cost of solar energy has dropped, installing solar panels still costs an average of $14000 to $16000 in the U.S, even after deducting the federal solar tax credit. Taking a loan to cover solar installation costs isn’t feasible for most New Jersey homeowners.
However, a solar lease program is a great option, especially for those who don’t qualify for federal tax credits or solar loans. Working with New Jersey solar energy consultants can ease this process.
If you’re interested in learning more about how you can benefit from solar power, please reach out to us. Hiring a solar consultant can provide extreme value with unbiased and transparent information regarding financing, installing, and maintaining your solar systems.