Solar leases often come with several potential hidden fees or extra costs that you should be aware of before signing a contract:
- Monthly payments that can increase annually: Solar lease payments typically start lower than your previous electricity bill (around $75 to $200 per month), but most contracts include an escalator clause where monthly payments increase each year by about 1% to 5%. It’s advisable to look for escalators under 3% to avoid outpacing local electric rate increases.
- Possibility of paying two bills: Even with leased solar panels, you may still receive and have to pay a regular utility electricity bill in months when your solar system does not produce enough power or does not cover all fees. Thus, you might be paying both your solar lease and a utility bill simultaneously.
- Cancellation fees: If you decide to end your solar lease early, cancellation penalties can be very steep, sometimes as high as $20,000.
- Transfer fees: When selling your home, you may need to pay fees to transfer the lease to the new homeowner. If the buyer does not want to assume the lease, you might have to pay to remove the panels or face the cancellation penalty.
- Complications when selling your home: Because leases can have long terms (often 20-25 years), selling a house with leased panels can be complicated. The new owner often must qualify to take over the lease, or the seller might have to buy out the remaining lease balance. Additionally, leases can act like liens on your property, potentially delaying or complicating sales.
- Maintenance and damage costs: While the leasing company usually handles maintenance, costs related to roof replacement or damage caused by solar panels may fall on the homeowner. Removing and reinstalling panels for roof work can be expensive and is often not covered by insurance.
- No tax credits or direct ownership benefits: Since the solar company owns the panels, the homeowner does not get the federal solar tax credit or other ownership incentives.
In summary, while solar leases eliminate upfront costs and maintenance responsibility, they often involve hidden or additional fees that can add up over time and cause complications, especially if you move or want to cancel the lease early. It is vital to carefully read lease contracts for escalator rates, cancellation and transfer fees, and understand the long-term financial implications before committing to a solar lease.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/are-there-any-hidden-fees-associated-with-solar-leases/
