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Published on May 19th, 2014 | by Guest Contributor

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Americans Love Solar & Would Rather Own It Than Lease It (Mosaic Poll)

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May 19th, 2014 by  

Originally published on PV Solar Report.
By Rosana Francescato

Solar: What first comes to mind?

Solar: What first comes to mind? Mosaic poll

A new poll from Mosaic shows that homeowners still love solar — and many still think it costs too much. The poll also delves into how homeowners feel about owning their system with a loan, versus leasing.

It never ceases to amaze me that even well-educated, well-informed people who care about clean energy have no idea how affordable solar has become. Or that different financing options are available. Maybe this has all happened too fast for the word to get out to the general public.

But Americans love solar.

Both these truths have been the consistent findings of a number of recent polls. And both were borne out in a recent survey conducted by Mosaic, the first company to offer investments online in solar projects. Mosaic recently began offering a residential solar loan, and they set about finding out how homeowners feel about that and other financing options, and about solar overall.

They reached out to 1000 California homeowners who volunteered to participate in the survey, so it’s a self-selected bunch. But the results are telling.

Homeowners still love solar

One of the most interesting questions posed in the survey was the first, worded simply, “Solar: What first comes to mind?” Almost equal numbers said it’s expensive (17%) and that it saves money (16%), with an equal-sized group remaining skeptical (16%). The most educated respondents were the most skeptical, the least educated the most enthusiastic.

When asked what was most appealing and least appealing about solar, most cited cost — yes, for both questions.

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What is most appealing to you about solar?

And while homeowners were unsure if solar would increase their property value, they did think solar would make it easier to sell their home.

The upshot? Homeowners think solar is a great idea, yet they’re mixed when it comes to cost awareness. And while people care about the environment, cost always tops the list of deciding factors.

So far, these are pretty standard results. But with solar loans being relatively new, we haven’t seen a lot of stats on how people feel about them. The rest of the survey dug into that.

Homeowners would rather own than lease — for the most part

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The findings were clear: All else being equal, homeowners prefer owning their solar system to leasing. The margin for this was significant, at over 2 to 1: 62% said they’d rather own and 26% lease, with the rest being neutral on the matter.

Reasons varied widely for this preference, but they can be summed up like this:

  • People want to own their system, just like they own their home — this was skewed 65% toward women respondents.

  • People think owning their system rather than leasing will make it easier to sell their house. Whether this is true may not be clear yet even to those in the industry, and is something we need to get more data on.

  • People feel that owning brings more freedom and greater financial benefits.

Those who preferred the leasing option gave these main reasons:

  • They didn’t want to deal with maintenance or outdated technology.

  • They planned to move soon and thought they wouldn’t get the financial benefits if they bought.

When asked to compare a few loan and leasing options in more detail, 40% of respondents indicated they would not go solar today. To get into why, we need to go back to what homeowners said was least appealing about solar: the perceived upfront cost, the perceived ugliness of panels on their roof, and the perceived hassle, sometimes coupled with lack of trust for solar companies.

Screen Shot 2014-05-14 at 10.29.54 PM

Among the other 60% of respondents, those who would go solar, there was a preference for the loan option with a shorter term and greater 25-year total savings, though it came with lower first-month savings.

Educating homeowners about solar

What does all this tell us?

First, that residential solar is complicated, and each person’s situation is different. Factors like age, education, and whether someone plans to move soon are bound to affect which solar financing option they pick. Leases are not going away anytime soon, but as we’ve been saying, solar loans could also get big.

Second, I think we can say that when people are informed, they will pick an option that makes the most financial sense in the long run. That was the case when people were given details about loan terms. A significant portion still said they’d lease — and that was also based on the information they had, or that they thought they had.

Which brings us to the third, and most important point. When it comes to residential solar, people are still relying heavily on their perceptions. And we’ve seen how off those can be, especially given how much the solar landscape has been changing.

That’s something we need to change. A key imperative for the solar industry has to be educating the public. The Solar Energy Industries Association (SEIA) has made a good start at this with their America Supports Solar campaign. Now we need to keep the momentum going and ensure Americans know that they can save money with solar. After all, that’s what people ultimately care about.

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  • Loren McDonald

    Also, I wouldn’t put much weight on thus survey … you need to focus on what people do and not what they say. 75% of solar PV households in California have gone the PPA route recently. As prices come down purchases are likely to increase but I think other factors and models will keep the PPA model going strong.

  • Loren McDonald

    I find it interesting that there has been so much discussion/debate/arguments recently about purchasing vs leasing solar. At one level the debate is probably OK and a good thing … but ultimately I think it is not where the focus should be – which is energy bill cost savings.

    How to finance your solar should be secondary decision and discussion. The answer is different for different people based on their specific situation. But let’s get them sold first on going solar because of the cost savings and green benefits – and then convert them by giving them financing alternatives that best fit their needs.

  • Byron Meinerth

    Is it safe to say that the cost of solar has dropped more than any other type of energy over the past 30, 40 years? I think Zachary and Giles Parkinson have both touched on this issue before. If the average homeowner is using information that is even just five years old, s/he will have a distorted view of what it actually costs (both in time and money) to install solar. Using information that is five years old in any market can be misleading, but not nearly as much as with solar.

  • ronwint

    “Those who preferred the leasing option gave these main reasons:
    They didn’t want to deal with maintenance or outdated technology.
    They planned to move soon and thought they wouldn’t get the financial benefits if they bought.”

    Well here’s a dose of reality:

    1. when it comes to “outdated technology”. that’s exactly what you’ll have on your roof at about year 10 when you lease, because with a lease you’re basically stuck with the same aging technology for the full 20 year term of your lease. The leasing company will repair or replace a failed system component but they absolutely not going to upgrade your system for free.

    With a purchased system, you own it, so you can can sell it at year 10 or whenever you wish and take the proceeds from the sale and upgrade to the latest technology.

    And as for maintenance. There is no maintenance with a properly installed solar system other than an occasional rinsing of the solar panel glass with a common garden hose to remove any accumulated dirt.

    And insofar as repairs are concerned, remember, the solar panels come with a 25 year warranty and inverter warranties range from 10 to 25 years. Labor costs to remove and replace these items after your contractor’s labor warranty expires, only run into the hundreds of dollars which is only a fraction of the additional money that you’ll end up paying after 20 years worth of lease payment.

    In fact, at today’s much lower pricing, a $0 down leased system will easily cost you 3 times more than a purchased system, so in reality, you’re paying for your own repairs and maintenance many times over when you lease.

    2. And if you’re planning on moving soon, good luck ever selling your home with a lease attached to it. What potential home buyer will want to buy your home and assume your lease payments on your used solar system, when they can buy a brand new solar system and keep the 30% federal tax credit for tens of thousands less than your remaining lease payments or take over ownership of your fully paid for purchased system for a much greater return on investment than a lease or PPA could ever offer.

    Remember, with a purchased system, at today much lower pricing, at year 4-5 your system will have paid itself off and with the exception of a few relatively low cost repairs in the future, it’s nearly free electricity for the remaining 25 to 30 year expected life of the system. With a lease, your payments won’t end for 20 years and your electricity will never be nearly free.

  • Omega Centauri

    So, the less education you have the smarter you are!!

    It sounds like a lot of people are intimidated about maintaining the technology. I think they think they have to know a great deal to be able to own/operate them. Whereas in reality it is just something like wash with hose a few times per year, they think thatbspecialized maintenence that they couldn’t do themselves is needed.

    • http://zacharyshahan.com/ Zachary Shahan

      I have wondered about that. No idea, but it is something leasing companies put a lot of attention on (which has always confused me a bit).

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