We’re still getting through reviewing the various solar leases and solar PPAs in around the U.S. Today, we’re returning to SunRun and their other solar financing program, a Solar Lease.
SunRun is mainly known for its Solar PPAs, but in some states or utility areas, they have a Solar Lease model because of complex utility agreements and/or state laws. Here are the basic need-to-knows.
In the next post, we’ll go over a SunRun solar lease example for an average size 5kw DC system.
- As mentioned, this program is currently only available in the Los Angeles (LADWP) utility and in Arizona. (For other areas in California and Massachusetts, see this post.)
- Standard up front cost is typically $500, but could be less or zip in some utilities in Arizona. So, good news for people worried about high up front costs for solar.
- This is an 18 year lease agreement. Should you move, you can transfer the lease to the new homeowner, buy out the remaining agreement, or buy the system at a predetermined cost.
- You’ll need very good to excellent credit to qualify. SunRun says it takes into consideration more than just your FICO score.
- SunRun does not place any kind of lien on your home, nor does the lease dip into your home equity, but again, they do look at your credit and ability to pay.
- All maintenance of the solar system is included in the lease, including the inverter, which usually conks out at around 12 to 15 years.
- As always with SunRun, they have a list of very experienced installers who will design, install, and maintain your system. That’s really great, considering there are so many new solar companies who have little experience with solar.
- SunRun calculates your first year’s combined Solar lease and utility bill to be equal to what you’re paying now. So, you don’t really save anything in the first year of monthly bills. The real savings come in the next 17 years (or more if you buy the panels.) Why?
- Because for the next 17 years, your SunRun solar lease bill will rise by only 2.9%, whereas the utility portion will probably rise at a higher rate, perhaps 5% or more.
- Historically, utility rates have risen nationally at an average of 5% a year. In the future, could be more or… less. That’s a risk, but with climate change legislation running through Congress and California requiring utilities to buy more renewable energy, it’s a pretty good bet that electric rates will rise by at least 5%, especially in utilities with tiered rates.
- Because the panels are technically owned by SunRun, they collect all of the incentives, including state and utility rebates, Federal tax credits, and renewable energy credits (RECs).
- However, SunRun says it works these incentives into your overall lease price. That can be a really good deal for middle/upper middle income people who may not be able to take full advantage of the Federal Government’s 30% tax credit. (A tax credit is like a gift card for the IRS. For example, you owe $10,000 and get a $9,000 solar tax credit, then you only owe $1,000 on April 15th. Owe less? The credit can be taken over 5 years. Check with your tax expert to confirm.)
In my next post, I’ll lay out an example of the SunRun LADWP lease for Los Angeles and Arizona.
Last modified: December 18, 2015