A salesman knocked on my door last week selling solar panels. He said if I did a lease to own on the panels, I would cut my energy bill and be able to use some of the savings each month to pay for the panels. Cut my energy bill, pay for the panels with what I save, and still have some savings left—it sounds like a great deal. I’m considering giving him a call back to discuss how to move forward, but wanted to get some outside advice first.
On top of the savings he mentioned that when I went to sell my house, the value would increase dramatically…up to $50,000 possible on my house. It all sounds almost too good to be true! I am sure you have run across all this before.
Thanks for all the advice!
Doug, Grand Junction
Like I discuss with my kids all the time, if it sounds too good to be true, it most likely is! We could probably stop this answer here and cover the bases for 90% of home owners, but that would not be doing Paul Harvey any justice. We need to provide “the rest of the story”. I will preface this answer with full disclosure that I am not a solar expert. My answer is based on the stories I have been exposed to and the first hand experiences of our clients. There are MANY angles that need to be examined to determine if going solar is right for you.
I also realize that my answer does not take into account the sales person’s pitch about a meteoric rise in electricity costs that is coming. Listen, if the cost of electricity sky rockets, then my answer here is wrong! If you believe the cost of electricity will skyrocket and you are going to live in your home for MANY years to come, then purchasing solar panels makes all the sense in the world and you should stop reading now! If you’re still reading then you better think long and hard before taking the solar plunge. For most solar panel owners, it is more about the statement made by having them than the fiscal savings they actually provide. YES, solar energy is good for the environment and I don’t think there are many who would debate that. I don’t think there is any doubt that there is the need to focus and continue to develop renewable energy sources that reduce our carbon footprint, but specifically with solar, the real monetary benefits are likely to be years down the road.
If you purchase a solar system for your home, there is no doubt you will reduce or eliminate your electricity bills, but at what cost? Obviously you will still have a natural gas or propane bill, thus seeing bigger savings in the summer and less in the winter. Let’s just hypothesize that you spend $25,000 (after any rebate or incentives) to put in your solar system. Let’s also say that your electricity bill is $150 per month or $1800 per year (remember you still will have a gas bill). It will take you 14 years to break even with the cost of the system. Not bad, but 14 years is a long time! According to Zillow the average family moves every 7 years! Uh oh, that math does not work. Looks like the true benefactor will be the home owner that’s two home owners down the line! Oh yeah, what about your property value increase? From my experience, to date, there is not a significant increase in home value of a home in our market with solar panels vs. one without. Maybe that changes in the future, but right now it is a selling feature, not a significant value add.
Ok, so let’s not purchase the panels, let’s lease them…same great savings, but you don’t have to pay for them up front! Right? Not so fast my friend! Back to the first line of this article, if it sounds too good to be true, it likely is. I have yet to encounter a solar leaser that left me saying, “now that’s a good deal” and I have seen many. Each and every lease has its angle, but ultimately, if you look into them you will encounter red tape and potentially unattractive answers. How easy will it transfer to a new owner? What happens if you want to remove them? What is the early prepayment penalty? What happens to them at the end of the lease? The list goes on and on and the answers are not always easy or cut and dry. Not to mention that when you go to sell you have to find a buyer who not only loves your home, but also loves your solar lease! Harder to do than you think…trust me.
Lastly, if your home was not built to energy star rating standards there are MANY things you can and should do to increase your home’s energy efficiency before you take the solar plunge. There are a lot of things to consider and it is a very personal choice. Best of luck and hope this helps…
The Kimbrough Team