As many of you have written to tell us how much you appreciate our candor when it comes to solar leases in our Caution, Think Before you Lease Solar article we thought we should start by saying thank you for reaching out and sharing your thoughts. But despite our warnings, the solar leases are very popular. In fact, the lease has become the most popular way for home owners to “get” solar. So popular even, that we at HPE have jumped on the lease band wagon and are happy to say, “GO SOLAR WITH ZERO DOWN!”
But before we offend our fans and appear to be hypocrites. Let us clarify. We stated simply in Caution, that leasing should be considered after cash and options for traditional financing are considered. And while this order of consideration may not be popular with lease providers, it is still how we feel.
The main problems with the solar leases that have exploded in popularity over the past 14 months are simple.
A) Many of the now lease holders could have qualified for financing, thereby owning their systems, taking advantage of the 30% federal tax credit, CSI cash refunds, and be set to make 5-10 times as much return on their system’s production.
B) Most of the leases themselves are marketed/sold by companies that closer resemble large finance machines out to maximize their lease portfolio, rather than clean energy advocates dedicated to understanding the customer’s architectural and energy needs and prescribing the best economic and environmental solutions.
But on the plus side….
A) More people have clean power and are saving money with solar than would have otherwise.
B) The competition in the solar financing industry is heating up, causing better products to be produced for us to choose from and in turn offer our clients.
C) We have sourced our own lease products that HPE can endorse and present to our clients when it’s actually appropriate.
Just like energy needs and architectural aesthetics, every client’s finances are different and require personalized financial solutions. The importance of the wide spread adoption of rooftop solar cannot be understated, and neither can the importance of providing sound financial options to get this done.
To us, offering a lease as part of our financing options allows us to offer the most tools to the most people. The more point of use solar savings the better.
THE HPE LEASE
The first thing to point out is that we are offering a lease on our custom designed and installed system, not just energy production. Many of the leases out there don’t even specify who the installer is or what equipment is being used, but rather simply promote the monthly savings as if all systems are the same and aesthetics and quality aren’t important.
The next important attribute of our lease is that it is designed to be flexible. A young couple and a retired couple have different financial needs. Both couples need to save money on energy, both need to protect themselves from energy inflation, both want to do something for the environment, but their income expectations and concerns are vastly different. Our leases offer personal choices that allow us to adjust the lease terms to fit their specific needs.
Some HPE lease highlights:
o You choose the down payment – Down payments vary from $0 to $5000, adjusting the long-term profitability of the system vs. the monthly payment.
o You Choose the Interest Rate – Fixed or variable interest rates are available between 0 and 4.9 % You determine if your lease payment is fixed over time or if it starts lower increases per the chosen interest schedule.
o Defined lease exit provisions, offering reasonable price per watt buyouts and/or buy-downs.
o HPE designs and installs our customized systems exactly the same as our purchase clients, with the best equipment, installation, and production.
It’s important for us to reiterate that we prefer to sell solar than to lease it. Not because we make more on a sale, we don’t, but because it offers the most robust returns. But for those who are on fixed retirement income, are house rich cash poor, impatient waiting on the Feds, don’t need the tax deduction, or can’t use the tax deduction (Oh Canada), the lease moves up on the list of preferred choices real fast.
We are committed to continue working for our clients to determine the best energy solutions, from balancing their energy use and system design, to determining the best purchase arrangement per their personal financial requirements.
We will continue to review the evolution of the financial products offered and update accordingly. But for those that see this evolution of finance as a reason to delay solar, don’t.
The sooner you start using the suns energy the sooner you save. Those are the facts, no matter how you “get” solar.
