Current Issues in Solar LeasesAssociation of Construction and Development
March 14, 2013 — 1,537 views
Solar leases are required when a company owns solar panels and you are willing to pay them on a monthly basis to lease the equipment. The amount you pay to lease to equipment is usually the same every month no matter how much solar electricity you use.
On an annual basis, it is possible that you may have to pay a little more, but this amount is definitely cheaper than paying for electricity. When the lease begins, you will usually have to pay for the installation as well. Most companies usually provide repair and maintenance for the panels.
If you are planning to incorporate a solar project on land that is private, it is important to consider the issues that come along with it. It is very likely that your customer will ask you why he/she should opt for a solar lease, and as a developer you will need to have the answer.
Benefits and Tax Incentives
Several states offer benefits and tax incentives for using solar energy, but these benefits are only for the owners and not people who lease the panels. Therefore, as a customer, you will only be renting the panels, so, whatever benefits come along with it, will all be directed at the lender.
Selling the Property
Issues with solar leases arise when the owner of the home decides to sell the property. The prospective buyer should be ready to take on the responsibility of the panel and the rental agreement. If the buyer does not want to use solar energy, the owner will first have to cancel their lease agreement before selling. If your client as the owner fails to do either of the two, he will end up defaulting and could end up paying a handsome fine.
Leasing out solar panels could end up being an issue if the property owner ever wants to sell and get an attractive offer and the buyers don’t want it. Also, remember normally the value of property does not increase if they have a leased solar panel as opposed to one that is purchased. This is because you do not really own the solar panel when you are leasing it off another company.
Hidden Terms and Fees
Although leasing solar panels look great on the surface, it is important to understand and be fully aware of all the hidden fees and the terms involved. Make sure you read the fine print and clear all your doubts. If you find that some of your questions have unrealistic answers, feel free to reconsider your options. It is important to ensure you get all the promises you have been made down on paper in an agreement.
You will have to make payments on a monthly basis or can even pay off your lease fees annually. However, remember, a large percentage of the time, buying a solar panel and the other equipment works out cheaper than leasing over long periods of time. It is important to study your needs and then make a decision accordingly.