Should You Think Twice Before Leasing Solar Equipment?

Before leasing solar equipment, should you think twice? Do you plan to sell your home in the next several years? Then think twice before leasing solar equipment. Here in California, where the sun shines most of the time, it seems wise to take advantage of the sun to power the lights and systems in our homes. And of course, going solar is the “green” thing to do. However, before leasing solar equipment, read the lease terms carefully. In addition to looking at the monthly lease payment compare it to how much you would expect to save on your power bills.

Look at what happens at the end of the lease term. Look also at whether you or the leasing company will be responsible for repairs and upkeep. If you’ll be responsible, and if the equipment is damaged, will your current insurance cover it? Better check with your insurance carrier. Leasing solar equipment could be more expensive than you realize. Even more important, if you think you might want to sell within the next few years, learn what will happen when ownership of the house transfers.

Your lease is an enforceable lien against the house, so the question will need to be addressed prior to closing. Will you be able to “buy out” the lease and transfer the solar equipment along with the house? Alternatively, will the company from whom you are leasing solar equipment be willing to transfer your lease to a new owner?

A typical solar equipment lease is 15 to 20 years. Would the buyers be able to take over your lease or would they be required to sign a new lease for 15 or 20 years? What if your buyers want nothing to do with owning or leasing solar equipment? Some consumers report having to pay the solar company thousands more than the remaining lease payments in order to
have it removed.

If you believe solar power is right for you, consider buying your equipment.
Many recommending buying rather than leasing. This article https://www.consumerreports.org/energy-saving/real-cost-of-leasing-vs-buying-solar-panels/ from Consumer Reports outlines several of the
reasons why. The article also cautions against using the financing offered by the solar company. You can probably do better with a home equity loan, which might even make you eligible for tax credits.

If you’re thinking of going solar, talk with your insurance agent, your tax preparer, and your lender. Then examine both lease and the sale documents carefully to make sure you know the facts before you sign an agreement.

If you want to buy or sell a home and review the existing solar system lease terms before you commit as a buyer and or know your options with an existing solar system as a seller, call Weintraub & Wallace Realtors, with RE/MAX Gold at 916-233-6759.

— JaCi Wallace