Is a Solar Lease Right for Me?

Have you heard or thought about the validity of a Power Purchase Agreement or Solar Lease? This informative quarterly report by SEIA (Solar Energy Industries Association) offers some great insights into ever expanding residential solar markets and the continued successes of Power Purchase Agreements as a means to reduce electricity costs and reduce your environmental footprint.

Third-party ownership has taken the residential solar space by storm, particularly in the last year and a half. The promise of lower energy bills with little to no upfront payment has spurred tens of thousands of homeowners to install solar systems through a PPA or lease agreement. In Q2 2012, the average price of a residential system was $32,453, down from $37,144 a year ago, despite a slight uptick in average system size from 5.8 k W to 5.9 kW. Even with costs coming down, purchasing a system outright is not a financially viable or appealing option for many homeowners. For homeowners looking to lower their energy costs or reduce their environmental footprint, the option to avoid upfront payment and have a contract with a company to monitor and repair the array is appealing.

As seen in Figure 2-3, the relative market share of third-party-owned residential systems has grown immensely in established markets. In Massachusetts, which has a burgeoning residential sector, installers that offer third-party financing far outnumber those who only offer cash sales. It is expected that the market share of third-party systems in Massachusetts will soon reach the levels seen in the other three states presented: Arizona, California, and Colorado. In the other major residential markets of New Jersey and Hawaii, where data is not available regarding third-party ownership, conversations with prominent solar providers suggest that levels of third-party penetration are similar to those seen in California and Colorado (70%-80%).

The success of third-party residential solar providers has attracted more than $600 million in new investments in recent months. Leading financial institutions have raised company-specific funds for solar providers to either offer to become installation partners or to use to install systems under their own name. This influx of cash into the residential space signifies the growing acceptance of solar leases as a secure investment and a unique way to reduce tax liability for the project owners, which in this case are the investors. It is expected that third-party installations will quickly claim even more market share in the coming quarters.

Information taken from: Solar Energy Industries Association. U.S. Solar Market Insight Report 2012 Q2 [blog post]. Retrieved from: Link

Sky High Energy has played an important role in helping many customers take advantage of Sky High Energy’s Power Purchase Agreement (or Solar Lease). We would like to remind all of our readers that not only do we have the ability to provide great savings on your power bills to our customers in viable markets such as Massachusetts, but our strategic pricing and quality products have given us the ability to deliver those same savings to our customers across our AZ, Massachusetts, Missouri and New Jersey, markets. If you or anyone you know would like to get more information about Sky High Energy’s Power Purchas