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Leasing Solar Panels Appeals to Less-Affluent

A new study has found that being able to purchase a rooftop solar panel system is often a privilege of the affluent, but that leasing rooftop solar panel systems is an increasingly popular option for those who simply don’t have the money to pay up front.

Asked time and time again what one can do for the environment, our answers are often dependent upon our income. In most cases, one of the biggest items — like installing solar panels — is for those who earn a lot (and can make a large up-front investment in a system that will earn them money several years down the road).

However, if you have the money to lease a rooftop solar panel system, you’re not only helping the environment, but, within just a year after you start, you can start saving money. On the other hand, for those who have the money to make the initial investment of $10,000 or $20,000, it may take a decade or more to break even. But that’s not even the best part….

The real benefit for those leasing a system is seen over the next few decades of their contract, where third-party companies are touting household savings of up to $10,000 to $15,000 over two decades.


Because as you pay a constant $40 or $50 per month lease on the solar panels, the cost of electricity is going up, saving you money.

The study was conducted by analysts from the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL), who found that leasing solar panels is surging in southern California and is especially being adopted by those in ‘less-affluent’ neighborhoods where households are earning between $100,000 and $150,000 a year (okay, not exactly poverty-level, but those making complete, up-front purchases are more likely to be households earning over $150,000).

Published in the journal Energy Policy, the study hopes that if what proves true in southern California proves true for the rest of the US, leasing rooftop solar power could prove a tempting offer for an additional 13 million Americans living in the bracket of a household earning between $100,000 and $150,000 per year.

“What is so interesting about the southern California data is that the strong decrease in PV prices – from lower retail costs and stronger federal incentives – didn’t pick up a new demographic. But the new business model – leasing – did pick up a new customer demographic,” NREL’s Easan Drury, the lead author of the report, said.

Repackaging the value of photovoltaics as a simple savings on the monthly bill is an attractive alternative to the pitch that it will pay for itself in a decade, he said. “If someone comes up to you and says you can make money next month and forever, that totally changes how people see the value of solar.”

Among Drury’s other findings:

  • Third-party leasing usually eliminates the need for home-equity-style financing and, thus, the need for significant equity in the home. Without the hurdle of financing, more people can adopt solar, Drury said.
  • Along with the lower income threshold, Drury found a surge in solar leasing in neighborhoods with younger families.
  • In the Los Angeles and Orange county markets, customer-owned PV was five times more prevalent than third-party owned in 2009. In 2010, the ratio had dropped to 2 to 1. And for the first quarter of 2011, the ratio was almost even.

Source: National Renewable Energy Laboratory
Image Source: Allan Henderson

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