This seriously burns my biscuits.
Lately, I’ve been hearing a lot about this incredibly good idea called Solar Leasing. In a nutshell, it’s renting solar panels. This alleviates the enormous up-front cost associated with purchasing the system, as well as the not insignificant ongoing maintenance costs.
Most programs work like this:
- * The company designs a custom setup for each customer’s power usage, roofline or other install area, and budget
- * The customer signs off or asks for tweaks before signing
- * The contract is set up for X years at the current price of power from the customer’s pre-solar provider. The price will not go up for the duration of the contract, while the price from the power company assuredly will. Thus, the customer is locking in a lower price for up to 10 years.
- * The solar leasing company takes care of all routine maintenance, free of charge. Things like a baseball through a panel would be charged-for in most cases, just as with other rental items receiving damage.
- * Excess power (if any) is sold back to the grid.
In many cases, the first year after installation does not see a reduction in the electric bill, as the rate paid for the system will likely keep matching the grid-based power price. However, each year after installation will see more and more savings as the price of grid-based power goes up.
Let’s say we sign our contract at a rate of $0.16/kwh. We have that price locked in for the duration of our contract. Next year, DTE will assuredly raise their rates, but we’ll still be paying 16 cents for our, plus selling any excess power back to the grid for a profit.
Why wouldn’t we want to do something like that, right?
I first contacted a company called CitizenRE, to see what they could do for us. As it turns out, nothing – they have no service in Michigan.
I refined my search and found Michigan Solar Solutions: “We are a Michigan company, installing Michigan products, with Michigan labor.” Outstanding! I contacted a sales rep, who gave me some sad news: There is no residential solar leasing program in Michigan currently.
Crushed, I asked him how I could help further this important issue. Is it legislative? Are the power companies blocking it? What’s up? This was his reply:
“As for leasing, I don’t think it’s legislative. I think the lending or
leasing institutions don’t see it as a viable or profitable market to be in.
From what I’ve heard there are financial institutions in California that
lease systems but none here in Michigan yet!
“If you want to lobby something I would try to get Michigan to get on board
with some state incentives to help the solar industry survive. Even if we
could get the sales tax from renewable projects exempted this would save our
customers 6%. Governor Snyder needs to do something for solar and wind
projects and promote sustainability.”
Ok, green-oriented people: TALLY-HO!
I’ve started a petition – will you please help me get our Governor’s attention by signing it?
Additionally, I have sent a letter to our credit union, asking for them to back solar leasing programs, and I’m writing letters to the Governor and my state legislators, as well. I hope you might consider doing something similar to promote renewable energy!
Creating tax incentives is the first step toward a viable solar leasing program in our state.
To give you an idea of just how much up-front money is required for residential solar installation, I’m going to share the figures the sales rep provided for me. You can download the full spreadsheet via this link – the figures below are the nutshelled version. IMPORTANT NOTE: The representative from MSS let me know today that the DTE incentives are purely speculative at this point, as they have not yet released their incentive program specifics for this year. The amounts listed may therefore be incorrect.
18 x 255 watt panels = 4,590 watts
System Design, Parts, Permits & Labor: $24,097.50
Total cost plus MI 6% Sales Tax: $25,543.35
DTE Upfront Incentive: $11,016.00
Customer Out-of-Pocket before Tax Credit: $14,527.35
30% Federal Tax Credit: $7,663.01
Net cost after DTE Incentive & Federal Tax Credit: $6,864.35
Estimated 20 Year Electric Savings: $18,427.67
Estimated 20 Year Profit: $24,232.35
Cash needed at contract signing: $14,527.35
Final payment (DTE upfront incentive can be used as final payment:) $11,016.00
That’s not chump change.
Not to mention, if we sell this house before the system pays for itself, we’re just flat out the money. With solar leasing, that’s not the case.
Solar leasing makes good sense.
I would love to hear about your experiences with renewable energy sources, particularly if you have installed solar power in your home. Does your state have a solar leasing program?