Solar power wars – leasing vs. buying

Investigate the impact on your property when it’s time to sell

Photo Source: Metro Service
Are rooftop solar panel systems cost-effective?

■ By Matt McPherson / Columnist

Homeowners should consider many factors before “going solar,” especially when choosing between the three major options: Paying for a system entirely up front, financing the system through a lender, or getting a developer to partner up using a power purchase agreement (PPA), more commonly referred to as leasing.
Most homeowners purchase rooftop solar because they think it will help save on energy costs, make them green, or a combination of both. Many experts claim the rooftop solar trend squanders billions of dollars every year that could actually be spent on much more cost-effective renewable sources of energy.
Recently a study by North Carolina State University backed by the U.S. Department of Energy looked at the 50 largest cities in the U.S. and found that small solar systems are more affordable, but only due to heavy government subsidies.
Rooftop solar is most advantageous in outlying sunny areas of California and Arizona. South of Hemet in Sage, Anza, and Aguanga, solar power is very popular, especially when tapping into the nearest power pole becomes extremely expensive. A south facing roof or slope is usually available and open desert landscapes with few trees make it much more feasible.
Energy efficiency is measured in kilowatt-hours (kWh). On average the typical rooftop solar owner in California generally pays around 17 cents per kWh, whereas the energy company can purchase power from a utility-scale power plant for around five cents per kWh.
Leasing solar may affect your ability to sell your home down the road, because the new buyer must also qualify to take over the solar lease on top of getting approved for the home loan. In many cases, buyers were turned down by their lender, even though they qualified to buy the home. The additional monthly payments associated with the solar lease increased their debt to income ratio and killed the deal.
“Please do your research and ask questions because a solar lease will likely make it difficult to sell your home,” explained Jennifer Murphy of Coldwell Banker Associated Brokers.
Selling your home down the road with a solar lease can create a lot of hurdles and deter many potential buyers. Purchasing the solar outright is encouraged if you can afford the upfront costs and will help avoid any confusion down the road when you go to sell your home in the future.

Matt McPherson is a licensed real estate agent with Coldwell Banker Associated Brokers, BRE # 01362837. Reach him at

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