Do solar leases deter potential home buyers?

Solar FinanceA recent Bloomberg article suggests some issues that customers have had with selling homes that have solar lease contracts attached to them. While it has been documented that solar panels have increased the value of homes in California by $5900 per kilowatt, the solar lease contracts could complicate things. Most notably, the article suggests:

  • Solar panels are considered personal property, rather than part of the home, so they are treated and negotiated separately
  • Buyers are reluctant to take over the long-term contracts
  • Since leases have gained significant popularity in the last few years, most leases are still with the original homeowners, suggesting that this is the beginning of a trend
  • Sometimes the new homeowner doesn’t meet the minimum credit requirements of the leasing company

Our take: Well, we read this a few times over and tried to find any good reason to think that this is a real issue, but to be honest, it seems like a few anecdotes to the effect of: these people report having trouble, because, even though every financial metric shows that the new homeowner stands to save money, they are reluctant to purchase a home with a lease, mostly because they don’t understand it.

We’ve written a lot about comparing solar leases to other forms of financing, as well as how solar leasing companies make money, and more recently, some alternatives to solar leases. We’re all about exploring and promoting every option for getting solar on your roof. This topic is certainly something to pay attention to, but, so far, it seems to be more anecdotal than a fundamental issue with the solar lease option.

That said, as solar continues to become competitive with electricity rates, the federal and state tax incentives that required complex financing structures like solar leases will play a smaller role and more traditional financing methods should gain popularity.

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