Get a Solar System on the Cheap

By Caitlin Dewey

Robert Schumacher might have plunked down $30,000 (less after tax credits and rebates) for a solar-energy system for his 3,000-square-foot Southern California home. Instead, he took out a 15-year lease with San Francisco-based SolarCity, which put 30 panels on his roof at no upfront cost. He's paying $141 a month to rent the solar panels, but he's confident that savings on his electricity bills over the next 15 years will put him thousands of dollars ahead.

Solar leasing is a relatively new option in the young field of residential solar power. Connecticut sponsors its own limited leasing program. Companies such as SolarCity and California-based competitors Sungevity and SunRun lease systems for ten- to 20-year periods, at rates ranging from $30 to $300 a month. Customers typically see net savings of 10% to 15% as electricity bills drop.

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But not all leases are equal. Look for one that allows you to sell excess energy back to the grid and that locks in a rate over the life of your lease. Ask about renewable-energy rebates -- leasing means you'll miss out on the federal residential energy credit and some local incentives, but a provider should pass those along in the form of a lower monthly rate. If you can afford it, consider a prepaid leasing option if your solar provider offers it. Prepaying even a part of your lease can double or triple your net savings.