Leasing the sun
Discount deals and tax incentives help homeowners go solar,
If faced with a $700-a-month electric bill, one might be inclined to cast one’s eyes heavenward. So it wasn’t surprising that Lisa Max took a good hard look at rooftop solar panels as a possible solution to her soaring energy costs. But the estimates “shocked” the San Rafael, Calif., homeowner.Skip to next paragraph
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It’s a typical scenario faced by US homeowners who are eyeing solar energy as a way to help the environment and save themselves some cash at the same time. When they crunch the numbers, the financial clouds descend.
Going green, at least until recently, took an awful lot of green – say, between $20,000 and $40,000 for a residential solar unit.
But a number of creative financing solutions have made tapping into solar energy more feasible for environmentally minded homeowners. These options range from neighborhoods using collective bargaining to whittle down the price to a new leasing program that allows people to go solar without any upfront costs.
Factor in this year’s new tax incentive from the federal government, which allows homeowners to take 30 percent of the cost off their taxes (up from a $2,000 cap in previous years), and a global downturn that has driven solar-panel prices down as much as 40 percent, and solar energy starts looking like less of a pipe dream for the middle class.
“When you look at these new finance mechanisms – not that leasing is new, but leasing a solar [energy] system is – what these guys are doing is trying to find a way to get solar to be mainstream,” says Glenn Harris, CEO of SunCentric Inc., a solar-energy consulting firm in Grants Pass, Ore. “It’s a big project, but it’s a worthwhile one. They have a profit motive, but the creativity behind it is pretty cool.”
For Ms. Max, the solution turned out to be leasing a solar unit much the same way one might lease a Prius. “I have a huge electric bill – we have a 55-year-old house with a flat roof, lots of glass, and a pool that requires daily pumping,” she says.
The new unit was installed in July, and, even factoring the monthly cost of the lease, she’s still hoping to cut her energy costs by almost half. “It was a much more economical choice for us,” says Max.
While leasing has gotten a bad rap when it comes to home appliances, this new venture shouldn’t conjure up images of unwary customers who leased their water heater or, even worse, their telephone, for decades, Mr. Harris says.
“When you go to an auto dealer about leasing a car, you don’t think anything about it,” he says. “It’s been an option for a long time. The idea of leasing is just saying to a consumer, ‘We know this thing has a high initial cost. We’ve come up with a balanced financial solution: We’re going to own and operate it, and we’re going to sort of split the benefits of the clean power coming out of it.’ ”
Solar City, one of just two US firms with leasing programs, began offering the option in April 2008. More than 1,600 customers have signed up so far. “We expect it to double about every year,” says CEO Lyndon Rive, whom Harris credits with pioneering both leasing and neighborhood collective programs.
“The homeowner can go solar and save money from Day 1, with no investment needed,” Mr. Rive says, adding that typical savings would be about $30 to $50 a month.