As solar technology continues to improve and sustainable energy options become more and more accessible, homeowners across California and the U.S. are beginning to line up to switch to solar. The great news about going solar in San Diego? Homeowners don’t also have to have the savings to cover all the upfront expenses of installing a solar panel system. That means all the benefits of switching to solar are available without the initial heavy financial burden.
For homeowners that don’t want to purchase their solar panels and system from day one, there are two main alternatives: solar leases and solar PPA agreements. Under a solar PPA, a homeowner purchases the electricity produced by the solar panels installed on their home (still owned by the solar company) at an agreed upon rate. They basically only get the immediate benefits of more affordable and sustainable energy.
While PPA agreements can be attractive to some, others may prefer more flexibility that general leases offer. Under a solar lease, the homeowner still doesn’t own the solar panels or other equipment installed on their home, however, they still have the same net metering process as solar owners would. Generally speaking, the monthly savings homeowners get on their electricity bill will exceed the monthly lease payment, resulting in instant savings. Over the lifetime of a system, a homeowner can see as much as 70% savings on their electricity expenses.
What’s the Best Leasing Option for Your Home?
When it comes to going solar, you have to make sure you settle on the right lease agreement. So what are your options?
Here are some of the most common solar lease agreements:
- Zero-down: Under this agreement, there is no payment required on the date of signing the lease agreement. Only when the solar panels begin to produce electricity will you begin to pay a monthly fee to the solar panel owners. The benefit is obviously that there is no upfront investment needed and can allow you to get electricity rates that are 20 to 30% lower than average. Each year may include a rate increase.
- Prepaid: The entire lease is paid upfront, which means you won’t have to make any monthly payments for the duration of the agreement. Essentially, by paying 100% upfront, you get more flexibility with your lease terms because the solar panel owner doesn’t have to assume any risk. You may also get some piece of any Solar Renewable Energy Credits and boost the value of your home by covering the entire lease upfront. By opting for a lease, the total price of the system is typically between 30% and 50% cheaper than it would have been without a third-party owner.
- Custom down-payment: With this type of agreement, you can expect to pay some amount upon the initial signing, usually negotiated with the third-party owner. The down payment may range anywhere from $1,000 to $5,000, allowing for lower monthly payments. Typically, a down payment will negate the annual rate increase a $0-down lease includes.
Make the Right Solar Choice
With so many options for going solar, it can be overwhelming to make decisions on everything from type of solar arrays to financial agreements. That’s why Semper Solaris is here to provide the guidance and insight you need on solar financing. Over the years, our San Diego solar company has installed thousands of residential solar projects. Time and time again, we’ve helped homeowners select the right solar agreement for their financial situation. When you work with our team, we’ll review your budget and preferences and help you select the best solar leasing option.
Interested in learning more? Give Semper Solaris a call anytime to get connected with a solar expert!