Is Solar right for you?

Home Solar Panels

Home Solar Panels

Is Solar right for you?

Many homeowners are wondering if Solar is the right move for them. Solar has been around a long time but only recently has it become popular for producing power for homes recently. In 2002, California established its Renewables Portfolio Standard (RPS) Program, with the goal of increasing the percentage of renewable energy in the state’s electricity mix to 20 percent of retail sales by 2017. California has used tax incentives to help kick start the solar craze and really imitate a whole new industry. As a realtor, I have seen some of the positives and negatives to owning, leasing, or renting solar systems.

At first, Solar companies only wanted to sell you their systems. They used 3rd party financing to keep their investments minimal. Home owners would have to come up with an initial investment, usually 5%-20% down. When sales did not take off for the solar companies, they introduced leasing options so that the initial deposit was deferred to the end of the contract. You might find this familiar in that the auto industry have used these choices for years. Again, Solar companies saw an initial rise is sales but still was not expanding as quickly as the industry needed to meet the long term plan of Colifornia’s Renewable Portfolio Standards.

Now, Companies like Solar City are being backed by big investment companies. Tesla Motors has backed Solar City and their rental programs. The rental program works like this. The companies will install and maintain the systems for the home owners. The home owner agrees to pay a set rate for all the electricity produced from the installed panels. Usually this rate is your tier 1 rate from Edison. Most contracts that I have seen have a built in annual rate hike of 3%. At a $.17 tier 1 rate, 20 years of increase could mean an increase of $.128 or $.298 per kilowatt. There is nothing in these rental contracts that really say they would or would not raise the rate a full 3% each year or that they would follow any increases from Edison. It just says that they can, which does worry me a little. You could be paying more for electricity than you would have from Edison.

For me, I find the rental program the best choice of the 3 but I am not completely sold. Solar companies are trying to keep a good public image so I am sure they will not do too much to tarnish that image. Over the next few weeks I will talk about some of the problems and benefits Solar has for home owners.

 

 

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