Off Grid Solar Lease Or PPA Versus Owning An Off Grid Solar System


Ever wonder why the solar leasing companies never post their pricing on their websites? The answer to that question is simple. If you knew upfront how overpriced their grid tie only solar system are, you would probably never consider inviting one of their high pressure salespeople into your home to provide you with a quote on an even higher priced off grid solar system..

The solar leasing companies might post their interest rates on their solar system financing, but what good is a low interest rate if you're paying nearly twice the price that you would pay if you purchased the same solar system from a fair market priced solar dealer?

Unfortunately for consumers across the country, low interest rate solar leasing company loans, power purchase agreements and solar leases are three of the most expensive ways to have solar on your roof. Up to three times the cost of a standar grid tie only solar system from a local or regional dealer using the same name high quality, reliable equipment. Purchasing an off grid or grid tie battery back solar system from one of these high priced solar leasing companies will probably cost you 4 to 5 times the cost of purchasing an equivalent off grid or grid tie battery back solar system from us.

If the leasing companies offered off grid solar packages, you would typically pay so much more to purchase or rent one of these system from a solar leasing company than a purchase from a local or regional non-leasing dealer, that it would actually you who would be over-paying to maintain, monitor and insure the leasing company's off grid equipment. You would probably have problems selling your home with an off grid solar lease or power purchase agreement attached to it. What home buyer will want to assume your remaining lease payments on a used, outdated off grid solar package when they can own a brand new off grid solar system with a fresh battery pack with the latest technology and keep the 30% federal tax credit for thousands, even tens of thousands less.

The low interest rate loans offered by the solar leasing companies may appear inviting at first glance but these low interest rate programs are very expensive for both the solar leasing companies and in the end for the system purchaser. They are known as "rate buy down loans" and can cost the solar leasing company thousand of dollars in fees which are simply padded into the price of the system.

While many fair market priced solar dealers are installing off grid solar systems with batteries for less than $5.50 per Watt, based on the solar leasing company's existent grid tie only pricing, they would need to charge homeowners an outrageous $8.00 to $10.00 per watt, completely pricing themselves out of the off grid and grid tie battery backup market.

If you could purchase an off grid or battery backup solar system from a solar leasing company then you would have to forfeit the 30% federal tax credit and any applicable cash rebate to them and you won't get tax deductible interest on your lease payments. By purchasing your off grid solar system with a $0 down FHA solar loan or PACE financing instead, you may qualify for tax deductible interest. Solar leasing company loans, leases and power purchase agreements don't offer tax deductible interest. And after making 20 years worth of leasing payments, you won't even own the off grid solar system. It would still belong to the leasing company. If you wanted to own their off grid or battery backup solar system after making all those payment, then you'll have to buy it from the leasing company at the end of your lease at fair market value.

Grid tie only solar leases and power purchase agreements will typically only save you about 15% to 20% on your electric bill after you factor in the monthly lease/PPA payment. Offering a solar lease or PPA on a grid tie battery backup system would save you far less. Not only would you be forfeiting the lucrative 30% federal tax credit on your grid tie battery backed or off grid solar system worth thousands of dollars but to make matters worse, most if not all $0 down solar leases include an annual payment escalator that will increase your monthly payment by up to 2.9% per year, every year for 20 years. A lease payment that may start at $80 per month can run into the hundreds of dollars toward the end of a lease contract.

Add up all of the disadvantages that a Solar Lease, Power Purchase Agreement as well as the much higher pricing that a solar leasing company solar loan offers and you'll find that none of these forms of financing makes much sense in today's much lower priced solar market.