Feb 19 2019

Benefits of Rooftop Solar Energy Systems Vary

Information for Piedmonters considering financing options for the installation of solar systems.

Piedmonters, and Californians in general, were encouraged to install solar energy systems following the passage of California Assembly Bill 2188 in 2014. Given the substantial cost * of the systems, some homeowners were enticed by the solar lease option, which required no initial cost. The February 18, 2019 Bloomberg Businessweek investigative report explained that the third-party-owner solar systems have no initial cost for the homeowner, but tie the property to a 20 year lease.

The offer to install a free solar system seemed to be an easy way to add value to a home and lower electric bills at the same time. A few years later as the lease payments escalate, some homeowners are less enthusiastic. Because the homeowner does not own the system, the tax credits are not available to them –instead they go to the solar company that owns the system. In addition, the solar array may have been sized too large as more energy saving devices (appliances, light bulbs, etc) replace previous units. One purchaser cited by Bloomberg saw monthly electric costs actually increase a year after the installation. When a house goes on the market, the lease obligation goes with it as an obligation of the future owner for the remainder of the 20 year lease. The result is that instead of making the home more attractive to prospective buyers, it can be a barrier. Buying out the remainder of the lease is an expensive proposition for the seller, but may be required by the buyer’s mortgage provider. Purchasing a solar panel system may be more economical than than the lease option.

As of 2020, California will require solar panels on all new homes, likely to be third-party-owner solar systems rather than the fully paid solar installations that would belong to the home purchaser. California Assembly Bill 2188 passed in 2014 required all city and county governments to adopt expedited/streamlined permitting processes for small residential rooftop solar energy systems.

* $22,000 was the cost in 2018 for a typical 6-kilowatt residential rooftop PV (Photovoltaic) system, according to the National Council of State Legislatures, but cost of a PV system varies depending on capacity, labor, permitting fees, inter-connection fees, taxes, transaction costs and indirect expenses.

One Response to “Benefits of Rooftop Solar Energy Systems Vary”

  1. A generally informative article but there is no author indicated. Should would we not know the credentials or biases of the author before we accept the opinions as being balanced and accurate?

    EDITORS NOTE: The February 18, 2019 Bloomberg Businessweek article, Sun Burned, by Esme E. Deprez and Jason Henry with contributions by Hugh Bromley reported on the lease contracts of Sunrun, SolarCity, SunEdison, Sungevity and referred to studies by the National Council of State Legislatures and Lawrence Berkeley Laboratory.

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