Can't Afford Solar Panels? Lease Them

Solar Leasing Programs Boast No Upfront Cost and Can Cut Energy Bills, or Even Leave Consumers with a Monthly Surplus

(CBS)  Sunlight is free. But installing solar panels to heat your home is beyond the means of many Americans.

If you live in California, Oregon or Arizona though - and other states starting next year - a bright idea can save you a bundle, as CBS News correspondent Bill Whitaker explains.

With rooftop solar systems costing $25,000-$50,000, even ardent environmentalists run for cover. And Kathy Nalty is not the greenest person on the planet.

She says she drives a gas-guzzler and doesn't buy much organic food.

But look on her roof. She's gone solar. In her typical suburban house, which she shares with kids and grandma, five TVs and four computers, her electric bill went from $200-$300 a month to just $59 a month.

That's thanks to a hot idea sweeping the solar industry: leasing. Nalty gets solar panels free. The solar company charges her $100 a month for the 15-year lease, and state and federal rebates for new solar systems - worth a couple of thousand dollars - go to the company.

"My usage is down," Nalty says, and she saves so much on electric bills that she actually comes out ahead about $100 each month.

"I kept thinking it was too good to be true," she said.

"Our biggest problem with customers was they didn't want to pay the upfront cost of solar," said Jim Cahill of SolarCity.

SolarCity, one of the first companies to start leasing to residential customers, says it's a win for the company, the environment, the consumer.

"It's allowed people who didn't have the option of getting the system, to get a system," Cahill said.

"Some of the deals out there right now allow you to essentially go solar right away and do so with a lower average utility bill than you had before, even though solar energy is still more expensive than conventional power," said Daniel Kammen, a professor at U.C. Berkeley.

With leasing, incentives for businesses, and rebates for homeowners who buy systems, solar panel use doubled in California last year - a big step toward the ambitious goal of generating one-third of the state's energy from renewable sources by 2020 and proof of Gov. Arnold Schwarzenegger's assertion that "you can be good to both the economy and the environment."

So Kathy Nalty isn't the greenest person on the planet - but leasing has made her greener.

And, "I feel a little less guilty," she said.

Wonderful idea. Sounds like a great way to make solar power for homes affordable now, and hopefully upgradeable as technology improves.

[FreeCleanSolar]

Anything that promotes the adoption of solar energy should be applauded. Leasing is one option that makes sense for some homeowners, but it has some drawbacks. Notably, the savings are significantly less compared to other purchase methods, there could be balloon payments, it requires a very high credit score, and there could be complications upon a sale of the property. A property sale requires the new owner to sign a leasing contract or a balloon payment for the current contract.

If you are worried about the upfront cost for solar panels, there are many financing programs available to homeowners with good credit. Some loans are tax-deductible too. Buying the system outright will generate the greatest savings. To learn more about solar costs, savings benefits and financing, visit <a href="http://freecleansolar.com">www.FreeCleanSolar.com</a>. You can also search a nationwide network of 500 local solar installers and find information about state solar rebates and federal tax credits.

The bottom line is that many home and business owners can afford and save with solar power today. For example, if you spend $200 per month for electricity, then you will spend $81,979 over 25 years, including a low annual price inflation rate of 2.5%. No matter how you calculate it, you will save money with a $5,000 to $25,000 solar panel system. Remember, you can pay the utility for 25 years, with annual price increases, or you can pay a lot less with solar power.

[jxknowles]

For certain parts of the world and the U.S. this makes a lot of sense. I would also like to install solar and leasing may be my solution.

[sarajaju]

I like the idea. Are you not suppost to buy things that appreciate and lease things that depreciate. So what if Solar City is making money on the deal they are absorbing the depreciation and we are a free market society...its just business.

[rf35]

I guess it's a good idea for larger families/homes. I don't use enough electricity for this to make financial sense. I'd love to go solar/wind, but the upfront cost prevents it and this lease scheme is more than I pay monthly for electricity now. If I were a big energy-waster, it might come out cheaper; but I concentrate on conservation and efficiency. There's more than one way to skin a cat (or an oil sheikh).

[louiville2_5]

You guys did the math right? 100/month * 12 months/year * 15 years = $18,000

They quote "With rooftop solar systems costing $25,000-$50,000", couple that with a life span of 20 years and the fact that the cells lose their ability to convert sunlight over time. Result:

A) the lease company is losing money (check the fine print my guess that's where the profit is)
B) the $59/month cost she pays now will go to $100+ as the solar cells lose efficiency.

End result Novel but more money, more CO2 due to mining etc to collect transport and recycle the cells, batteries................. needed to use this.

That and power companies will still be needed as a backup source, especially after a hail storm.

[rf35]

In regards to the bit about the lease company losing money: they also keep the government rebate/incentive money. There's the profit. As far as the rest, you might have a point. I can't say I've done that much research since they are not a viable option for me.

[azure13]

Man I would love to have one of these systems! As the articles says, it's always been the cost that kept me away.
I want to hear more!

Indy... where did you get the idea that leasing was a Republican idea? Trust me, they would rather you keep your oil burner.

[sjc_1]

The company owns the panels after 15 years, so if you want to extend the lease you can, but the profits go to them. If you buy the panels, YOU or the people that buy your house keep the profits.

[bradkt1]

I like the idea...but I want to hear a little more about the details.

[timetocomeclean]

Where's the sign up form?

Just think if Bush-Cheney-Rice-Rumsfeld had invested in solar power credits for US Citizens instead of throwing money away in Iraq, we wouldn't have any oil sheiks left that can fund the Taliban and Al Qaeda!

And wouldn't Hugo Chavez be another tin horn dictator with a TV show in Venezuela!

Two bits, four bits, six bits a dollar. Everyone who wants the states and federal government to give more tax credits for solar, stand up and holler!

[titletrack]

"Can't Afford Solar Panels? Lease Them"

No thanks

[mike18881]

I have some questions 1) how will the tech world change in the next 15 years? 2) what is the up front cost. We,re off the grid, how much will I save? We don"t pay for electricity anyway. 4) If tech changes will we get any benifits?

[jschmidt27]

Great idea- it makes monetary sense- not everything is an environmental issue. REpublicans always are in favor of monetary sense issues. But the first step is too make sure your roof is new or near new. I believe you have to have 20-25 years on your roof to be able to get the credits.

[djseavy]

I'm hoping that leasing will be available for wind generators eventually. Between the two options, we can really do something to clean up the air.

[indythoughts]

That is an awesome concept and it is largely driven by free markets. This is what is possible when Republicans get their head out of the sand about global warming and apply conservative priviples to solving the issue. I like it!