Hello everyone, 

   I am doing some research into Solar panel leasing and I wanted to reach out to all of you for information.  There is a great deal of rumors about some hidden facts regarding this practice that can be detrimental to the homeowners, and that is the information that I am trying to collect for my research.

   I like to thank you in advance for your help!

Luis

Tags: energy, leasing, panels, solar, sustainable

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Clearest concise piece I have seen - https://runonsun.com/newsletters/v2015/02-Newsletter.html

Top 5 Reasons to Stay Away from that Solar Lease!

 

Thank you Sean,

   I will read it as soon as I get back to my office? Do you have any first hand experience on homeowners that got a rotten deal from a solar lease?

Sorry but no, not that big of a thing up here

Biggest issue I see for most is everyone grid ties & then wonders why they have no power when lines go down...

Solar panels have no value to a homeowner on an appraisal when selling your home.  Guidelines for FannieMae where changed effective March 2015 for homes with leased solar panels that don't allow any value to be given on an appraisal during the home sale.  

During a sale, the amount of the payment for the lease is added to a buyer's debt to income ratio as if the buyer already owns the panels in order to qualify for a mortgage.  This additional debt is oftentimes detrimental to the sale in that the buyer either no longer qualifies for that much of a loan or their FICO score (if less than 650) can exclude them from qualifying.  Not every solar company has that minimum FICO score.  Some require a FICO score of 680 or higher, making it ever more difficult to qualify or sell the home.  

Realtors don't always know how to convey the "value" of a leased system.  They don't share the utility savings as a benefit to the home buyer for acquiring a lease.  They don't understand the leases and don't ask the right questions of a home seller.  They don't know what they don't know so how can that be translated into a successful sale of a home? 

Buyers don't want to assume a 20 year lease.  Why should they assume  a payment and get locked into something that they will never own. Even if the lease is paid off, the panels still have no value and are considered personal property like a security system. 

The inverters don't last as long as the panels, maybe 7 years give or take.  A homeownersneeds to be aware that they will have to replace the inverter at an additional cost.  

Lease payments can escalate so even if utility rates increase, so do they lease payments.

Utility companies can tack on extra fees to homeowners who add solar panels to their roofs in order to support the grid; we've experienced this in Arizona.

If a homeowner has an asphalt roof or a type that will need to be replaced sooner than tile roofs, the panels must be removed to change out the roof, which is an additional cost to the homeowner.  

Solar installers don't explain that there are other methods to reduce energy bills that can oftentimes be a shorter ROI and less costly than adding solar panels, ie changing out light bulbs and sealing ducts. 

If a homeowner knew that they could reduce their bills prior to adding solar panels, thereby possibly reducing the number of panels needed, they might make smarter decisions.  But it seems that none of this is ever discussed because a solar company's primary goal is to lease or sell solar panels, of course. 

Thanks for sharing this information.

Anytime!

Great information.  I will share with my realtors.  thanks!

Jan makes some very good points. The reality is that PV panels are more attractive to homeowners than weatherization for a few reasons. 1)- the energy "savings" are much easier to quantify than for weatherization  2)- PV panels are a visible sign that the homeowner is doing their part for the environment, where weatherization measures are not seen  3)- Taxpayers are funding typically 30% of the cost of the PV system through tax credits.

In addition to the down side of PV panels on the roof, the panels have a finite life of 20-25 years, where weatherization is essentially forever. There is no question that we need to add renewables to our fuel supply, but we should be putting the same effort into weatherization

Thanks Brad.  Solar panels are exciting to most homeowners but they clearly don't understand every method to reduce energy.  Solar is being "sold" without all of the information necessary for homeowners to make educated decisions when it comes to energy efficiency.  If more people knew they could reduce their energy bills with less costly methods, they'd be doing it.  

It's up to US to share that message on every platform necessary.  I've created speaker panels 6 years ago and it's been very effective.  My panelists are a home builder, energy auditor/rater, lender, appraiser, and me.  We go through every aspect of building, adding, financing, appraising and selling homes with energy efficient improvements.   

If you know of a realtor or anyone in the industry who would like to put this panel together, please have them contact me.  It's been a very effective conversation. 

My next class in Scottsdale will be the first of it's kind adding CE credit to realtors, appraisers and BPI credits! 

This article is a year old, but I thought it covered the topic fairly: http://www.consumerreports.org/energy-saving/shedding-light-on-sola...

The biggest problem in SC with the lease is the home owners dont realize the lease must be requalified by the new owners if they sell the house. This is a pretty big barrier to sale of a home as the new owners have to apply and qualify.

The article skips over the detail that a lot of the details vary by company.  Some companies have provisions for when a lease ends.  A homeowner might end up paying a final fee and then the panels become their responsibility versus removing the panels.  So advising a prospective solar leasing homeowner means reading EVERY detail of leasing panels.  

There have been numerous companies that have gone out of business during the housing recession.  This can also be a real headache during the sale of a home.  

I urged my client to consider purchasing solar versus leasing on a new construction home.  Builder discourage purchase. Told client they will have to finance or pay of out pocket if the appraisal didn't come in at the loan amount.  Client of forwarded to request read his 50 page lease agreement for solar.  I got lost after page 5. 

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