"Free" Solar Leasing for Homeowners: Is it Really Free?

Solar electric powersystems offer a great locally generated energy solution for our ever-degrading and inadequate electrical grid in America. The biggest stumbling block for most Americans for adoptingsolar poweris the up-front costs of the solar PV system. Businesses, with their huge appetite for tax deductions, have been able to utilize the 30% (of total system price) tax grant coupled with accelerated depreciation to pay a huge chunk of thesolar power generatoroff almost right away. Homeowners without the need for more tax deductions often find the 30% system tax credit without benefit for their household. The good news is thatresidential solar leasingis able to take all the incentives of a large corporation and deliver them to the homeowner in the form of a low-cost lease. As the system owner, the leasing company gets the30% tax credit/grant and is able to depreciate the solar power plant. In turn they are able to offer a lease payment that reflects this savings to the homeowner. This establishes a real win-win scenario for both the investor and homeowner.  Typically thesolar leaseis a flat monthly payment that is the same or less than the homeowner’s current electric bill. What is the benefit of buyingsolarif the lease payment matches my electric bill savings? First of all, you are creating clean power closest to the source of consumption. Coal-fired power plants, which are miles away from your home, are creating power with a huge price-tag of pollution and energy loss. The pollution concern is obvious, however not many homeowners know that the distance between their home and the electric power plant causes a degradation of generated energy through loss in the delivery process of the electricity. As electricity travels many miles to your home, the energy degrades through the drop in power lost in the form of heat from wire loss. Without getting too technical, This loss is the reason that the closer one is to a power generation plant the less they pay their electric utility for the delivery portion of their electric bill. Thus we are creating power with pollution and wasting that same power at the same time via its method of delivery. In contrast, the locally derivedsolar power planthas minimal loss of power, since the power is typically consumed within feet of its production location. Even the excess power pushed to the grid is likely to be utilized by a neighbor before wire loss is at all considerable. Secondly, a predictable flat payment each month is helpful with your monthly household budget planning. Most remarkably, your new flat payment will stay flat for the entire lease. While your avoided electric bill triples in cost, you will still be paying the same or less than what you are paying today. If someone asked you if you would freeze yourelectric billat the current rate for the next 20 years, would you say yes? This is what you are doing. Homeowners can see a savings of 20-50 thousand dollars in savings over the life of theirsolar lease. This is what SunMoney Solar calls “Better than Free Solar.”