In my last post about the CT Solar Lease model, I told you about the basics of the program. In this post, I’ll discuss the pros and cons and why I think this is overall the most affordable way to go solar in Connecticut.
So let’s go over the pros first:
- There’s no upfront costs. In my conversations with both installers and consumers considering solar, the upfront cost is always a big impediment to moving forward. People worry about what they might be doing with that 15 or 20 grand, whether it’s investing it or saving the home equity for a cash reserve or for other repairs. Here, you don’t have to worry about that choice. You just pay a flat monthly fee. Simple and easy.
- It’s a flat rate. So, for the example provided by them for a 5KW system, you’re going to be paying $120 a month for the next 15 years with no annual price increases, except for the extra power you need to buy from the utility. (Remember that your solar system can cover 50 to 99% of your power. Whatever it doesn’t cover, the utility covers you–at their regular prices.)
- In an analysis by the National Renewable Energy Laboratory (NREL), they calculated a modest 3% rise in electricity costs in Connecticut over the 15 year term, and the CT solar lease still came out ahead in terms of electricity costs. But energy prices could rise much higher, say 5% or more on average if a carbon tax gets instituted, so the savings might be even greater with a flat solar lease payment.
- Currently, even if you wanted to buy the solar system, the incentives in Connecticut have run dry. So unless those direct incentives are refunded, the most affordable way to go is through this solar lease program.
So what’s the down side? I got to say, not much.
- You’re locked in to at least 15 years, but to me, that’s really not such a big deal. Why would you want to give up your solar panels when energy prices are only going to be rising over the same period? Should you decide to move before then, it’s a good bet that a new buyer will also see the advantage of home energy savings and make your home even more attractive.
- After 5 years, you’ve got to take care of the solar panels and maintenance. Again, this isn’t such a huge deal. Many dealers include web based system monitors that tell you if you’re generating power or not. The panels are guaranteed for 25 years, so no cost there, and the inverter will need replacing. But it’s expected that the Solar Dividends will cover that. Otherwise, because solar has no moving parts, the only thing you need to do is wipe the panels off every few months and brush off any unmelted snow. Solar panels are more efficient (produce more energy) in cold weather, by the way.
- You don’t get the same tax benefits that you would from buying through a home equity loan, but you also don’t lose that cash reserve. Also, as mentioned above, the direct state incentive program has run out of cash, so even if you wanted to buy outright, it’s cheaper to go with the lease now and buy the system at fair market value at the end of the term.
So, bottom line, as of this writing, if you qualify for this program, it’s a no-brainer to me. The NREL analysis mentioned above also gave it a thumbs up. There’s only a limited number of systems that can be installed under this program, so contact one of the pre-approved installers and get a quote.
As always, quotes are free, so even if you’re still on the fence, run the numbers and see what they say. Couldn’t hurt.
Last modified: January 13, 2015