Service 1st Energy Solutions explains the benefits of buying versus leasing a solar system. While many homeowners in their Las Vegas area prefer to buy, leasing might be a good option for some customers.
When we spoke to SolarCity CEO Lyndon Rive last year, he seemed dismissive of solar loans. While he thought they’d make some inroads, he didn’t see them supplanting solar leases or becoming the next big thing.
Other signs, though, are pointing to solar loans getting big. Leases have been crucial in upping solar adoption and account for 75% of new residential installations in California. But with more loan options becoming available, more homeowners may opt to buy their solar systems. A recent poll conducted by Mosaic found that 62% of homeowners would rather own than lease.
The bottom line is that it depends on each family’s situation.
That’s something that Las Vegas solar provider Service 1st Energy Solutions recognizes. In a recent press release, the company said it takes the time to provide information to their customers so they can make the decision that’s right for them.
Service 1st notes that Las Vegas has experienced a reverse trend in these financing areas. There, monetary solar incentives for leasing have been scarce, so the average consumer has become accustomed to the idea of purchasing a solar system. However, with recent solar competitors entering the area, and local incentives around the corner, solar leasing has become a hot topic of conversation.
According to Service 1st, leasing can be a good option — but only for certain customers. The power of solar, the company asserts, is really in the purchase.
“We offer leases,” says Tim Fromhart, President of Service 1st Energy Solutions. “We offer leasing because we want our customers to have a choice, and for some people, leasing is beneficial. However, the majority of our customers are candidates for ownership. According to what we’ve researched so far, solar purchasing is an excellent investment for our customers. We believe that it comes down to educating our customers and helping them see the possibilities of solar ownership.”
Service 1st has identified a few considerations for consumers interested in solar leasing:
After 20 years of payments (or completion of lease term), customers still don’t own the solar system. (It’s worth noting that leases are new enough that we haven’t really seen what will happen at the end of a lease term — leasing companies may not want to deal with removing systems, so customers might end up owning them.)
Most leases have an escalator, which can make payments over time much higher than expected.
Leases are often constructed with the idea of decreasing the power bill, not eliminating it.
Since homeowners who lease never actually own their system, they never receive truly free power.
Conversely, owning a solar system offers these benefits:
No prepayment penalties for financed systems, so homeowners can enjoy truly free power faster.
No escalator involved in the payment structure, making the financing more transparent.
Homeowners can easily, completely eliminate their power bills. (This of course is not the case in areas where there is some fixed charge on a power bill.)
Consumers who own their solar systems experience added value to their property, increasing the resale price with this asset. (Whether that’s the case with a lease remains unclear, but we can’t assume it’s not.)
“We certainly understand how solar leasing can be attractive to some Las Vegas residents,” said Fromhart. “Solar energy is a great asset for a home and it provides a valuable return on investment. That’s why we believe in formulating customized financial options for our customers.”
Service 1st clearly has a preference when it comes to leasing or buying. But they’re tapping into a consumer preference, too. We may be seeing a lot more systems owned by homeowners in the next few years.