Solar-Power Shift? Why It Could Make More Sense to Buy Than Lease
Reuters | September 24, 2013 | link
By Nichola Groom
Falling prices and growing acceptance of home solar power is sparking a challenge to major financiers who have anchored the U.S. industry using leases, as smaller banks and other lenders rush to offer homeowners loans to buy systems. Loans offer homeowners a path to solar system ownership and the opportunity to capture for themselves federal tax credits worth 30 percent of the value.
Well over 60 percent of residential systems in top solar states like California and Arizona today are owned by investors or companies which lease systems to homeowners for a monthly fee. Investors like Goldman Sachs Group Inc, U.S. Bancorp, Google Inc., lured in large part by the tax credits, have helped propel the rapid growth of leasing companies like SolarCity Corp., Sunrun Inc., Sungevity Inc. and Clean Power Finance Inc.
But prices of systems have fallen to $20,000-$30,000 for a typical home, equivalent to the price of a car. This has made ownership more feasible and reduced the number of years it can take for a system to pay for itself through lower power bills.
“It became glaringly obvious that someone needed to provide a path to ownership for these systems. It’s not a $40,000 or $50,000 expense anymore,” said Jim Petersen, founder of Fremont, California-based PetersenDean, one of the biggest U.S. installers. “And why would you give up your tax credit? Anybody that has a job has a tax appetite.”