A bit about me: I tend to know more than most about the energy space because I work in the industry. That being said, I know solar can be inefficient, expensive, and the pay-off long. But then, solar leasing programs were created and the game was changed.
One of the biggest hurdles for solar adoption and ownership was the high up-front costs. Even with tax breaks and rebates cutting the cost down by as much as 45 – 50%, a homeowner still has to pay around five figures for the pleasure of owning a solar panel and wait 15 years for the payback.
You might think that Texas is a natural location for solar given the amount of sun the state receives each year. However, the Texas solar market has challenges that are not unique to its market.
For one, home prices in Texas are low. An investment of $30,000 in a solar panel on a $150,000 home represents a much more significant amount of the home’s overall value than a $30,000 panel on a $500,000 home in California of the same size. This makes the benefit of home value improvement from solar panels in Texas harder to believe.
Secondly, Texas deregulation means that prices for electricity are more competitive than prices for electricity in regulated markets. That makes the payback time even longer in Texas if you only look at the potential savings on your electricity bill.
So why invest in solar panels at all? Well, leasing provides two incentives.
Solar Lease versus Purchase
Why is leasing with SolarCity better than owning my own solar panels?
- Well, for starters, the low up-front cost means I don’t have to shell out all that cash. Instead of having $15,000 available, I only needed to have $4000.
- With SolarCity, I’m able to monitor my savings, at no extra cost, as long as I own the system.
- I have the option to upgrade the service where they’ll monitor my usage and let me know how much electricity I’m using on a daily basis from the grid and from the solar panel.
- They provide a performance guarantee and a warranty on the system for the life of the lease.
- Finally, with a 15-20 year lease, I practically own it without the headaches of owning it. Because I prepaid the lease payments, I can transfer the lease when I sell the house without having to worry about the credit of the home buyer ruining the home sale.
I wanted to make sure I was getting the best deal, so I shopped around a bit. SolarCity offered me the best price and the company has a good reputation for stability.
When my wife and I called SolarCity, agent pulled up our address on his computer and was able to tell us how big of a system we could get and how much production we would be able to get from it. He sent me a PowerPoint proposal that explained everything we needed to know and a form to fill out to get started.
In short, our system was going to be 5 kW, sit on the front roof of our house, and cost $3600 upfront if we chose to prepay the lease (which we did). They were able to make this happen because of the rebate Oncor was offering for homeowners.
Since we put in our solar panels, Oncor has discontinued the rebate. I took another look at my decision now that the rebate isno longer available and my conclusion is that solar is still a very good deal (due to China’s enormous investment into solar manufacturing and creating large availability of solar panels in a slowing market.)
Without the rebate, you can’t get the four year payback I got with my system. But the payback at 8-10 years for a 20 year lease is still a great deal because it means you’ll earn a 100% return over the life of the lease. Further, if you factor in the attractiveness of an energy-saving feature in your home during this slow real estate market when you sell, it’s an even better deal. I also get a kick out of watching my electricity bill go down each day and month.
For a technology geek like me, this is the ultimate toy.
- David C., TXU Energy
Do you have solar panels at home and are they worth it for you? Tell us about your experiences and what you learned in the shopping/buying process.