Saturday, 19 December 2015

Best Solar Lease and PPA

Third-party-owned solar has taken the residential market in the U.S. by storm. SunRun recently announced a growth of 80% in California in only one year.[1] Another study revealed that more than 70% of Californians who go solar prefer third-party ownership.[2] Similar numbers can be found in several other states as well.

Many companies have started offering “zero-down” payment schemes since SolarCity first introduced the ingenious financing model back in 2006. Homeowners no longer have to pay heavy upfront costs to reap the benefits of solar photo voltaic panels.

We`ll take a closer look at the five largest leasing companies in the solar industry (SolarCity, Sun Run, Sungevity, Sun Power and Real Goods Solar). What are their differences? The goal of this article is to help you figure out which solar provider is the best choice in your situation.



Let`s start with a quick overview over a few common terms:

Solar Lease

Leasing a solar system is pretty much the same as leasing a car or a TV. You pay your solar provider a monthly fee (fixed, escalating or de-escalating) to lease their solar panels.

Many companies will allow homeowners to prepay the entire lease, or part of it (down payment).



Power Purchase Agreement (PPA)

Power purchase agreements are almost identical to solar leases – the only difference is that you pay for the amount of power the solar panels produce, as opposed to just leasing the equipment.

What is common for both solar leases and PPAs is that most companies will take care of everything from installation to monitoring and maintenance. The duration of a solar lease/PPA is typically 10-20 years.

Benefits of Solar Energy

Solar is a Secure Investment

The utility companies are notorious for their fluctuating and unreliable electricity prices. There is clearly an upward trend.

With solar panels and simple math, we can calculate how much electricity will be generated, and most importantly, at what price, for at least the next 20 years (fixed energy costs).


Solar panel manufacturers include a 20- to 25-year warranty (also known as a performance guarantee) with their solar panels. The industry standard guarantees 80% performance after 25 years.

The real lifespan of solar panels is much longer – your solar panels will likely generate a good amount of electricity 30-40 years down the line.


 Save the Environment

We know that the majority of homeowners choose to go solar because it makes good sense from a financial point of view. That being said, the environmental benefits are also clearly worth mentioning.

The U.S. places second in the world in annual carbon dioxide emissions at 17.9%, right behind China.[3] You can go a long way in lowering your carbon footprint by replacing utility power with clean electricity from solar panels.

The average residential solar system offsets about 100,000 lbs. of carbon dioxide in 20 years – the equivalent of driving a car for 100,000 miles.



Create Energy Independence

The U.S. relied on net imports for about 40% of the petroleum (crude oil and petroleum products) that we consumed in 2012.[4]

You can help to reduce U.S. dependence on foreign energy. We will inevitably run out of oil, coal and natural gas. While we continue our consumption of these increasingly expensive and dangerous energy source, our national security and economy suffers.

Solar is one step in the right direction.

Solar is Easy

Shopping for solar used to be a long and complicated process. There are hundreds of solar companies in the U.S. alone.[5] It would take you weeks to find the best solar deal. Luckily things have changed.

To go solar has never before been easier. Our team of independent solar consultants will help you sort through your options. To see how much you can save, and for all other solar questions, request a free consultation. There’s no obligation

Top Benefits of Going Solar

Save Thousands of Dollars

According to One Block Off the Grid, adding solar panels to your home can bring in monthly savings of well above $100 in many states. Extend this to two decades, less than the length of a typical solar panel warranty, and this translates to over $30,000. In Hawaii, residents save on average $64,000 the first 20 years!

 Start Saving from Day 1

Solar purchase power agreements (PPAs) and solar leasing has made it possible for homeowners to go solar for little or no money down.

Many homeowners choose to finance their solar panels with one of the “pay-as-you-go” financing options. This means that a third-party company – the solar provider – owns the solar system and takes care of installation, maintenance, monitoring and repairs. You simply pay the solar provider for electricity – less than you would`ve paid the utility company.

As of June 2013, 75% of all American homes have access to pay-as-you-go solar.

Pay-as-you-go solar is an excellent option for many homeowners. However, we generally recommend that you should pay in cash (through a home equity loan or a second mortgage) if you can. This will bring in more long-term savings. More about this here: Benefits of Owning (vs. Leasing) Solar Panels.


 Low Payback Period

If you choose to pay in cash, the payback period is in many cases less than ten years. In Hawaii, it takes homeowners on average 5 years before the monthly savings (in terms of lower electricity costs) meets the total costs of the solar system.

 Increase Your Home Value

Buying a home with solar panels translates into lower electricity costs. Solar panels will increase a home`s attractiveness on the market, similarly to homes with low property taxes, homes in school districts and homes with good Home Energy Ratings (a measurement of a energy efficiency).

A study conducted by National Renewable Energy Laboratory (NREL) concluded that homes with solar panels sell 20% faster and for 17% more money.[1]

U.S. Department of Energy’s (DOE) Lawrence Berkeley National Laboratory found that the sales price of the average home increased $17,000 with solar panels.[2]



Take Advantage of Incentives

As of 2009, the $2,000 cap on the Federal Solar Tax Credit is lifted. You will get 30% of total system costs back (equipment and installation). This means you would save $7,500 on a solar system worth $25,000. Combine this with state and local rebates, Solar Renewable Energy Credits (SRECs), and total costs can be cut in half. Take advantage of incentives while they last.

Data from One Block Off the Grid shows that the average solar home in New Jersey earns between $5,000 and $7,000 by selling their SREC credits every year.

To find out what state and local incentives apply to you (they can vary between ZIP codes), you should signup for free solar guidance.

5 Mind-Blowing Solar Energy Facts

1. Solar has Incredible Potential



If we add the amount of solar energy that is absorbed by the Earth’s atmosphere, land and oceans every year, we end up with approximately 3,850,000 EJ (exajoules or 10^18 joules).

To put it in more understandable terms, this amount of energy is equivalent to:

2.7 million earthquakes of the same size as the Tohoku earthquake in Japan (2011).
40 000 times the total energy consumption in the United States
8 000 times the total consumption in the whole world.
About 40% of the energy that is required to heat the entire volume of water we have on Earth by 1°Celsius
Unfortunately, harnessing all this energy is not achievable. Here’s an overview that illustrates the potential of solar power more realistically:

How much solar power is requiered to power the world

The sum of the tiny squares you see on the world-map is the area that is required to cover the entire energy consumption with solar power.


2. Is Solar Power Green?



Let me get one thing clear: Solar power is certainly greener than conventional ways of harnessing energy sources such as fossil fuels and coal.

On the other hand, there are issues regarding manufacturing of the solar panels, as well as disposal and recycling of byproducts. Where does the solar panel end up when it is no longer usable? (Most solar panels for home only have a warranty of 25 years).

Emissions of greenhouse gases do take place during the manufacturing. Dangerous climate gases such as nitrogen trifluoride and sulfur hexafluoride are both on the list. These literally have many thousand times the impact on global warming as an equal amount of carbon dioxide would.

 3. Solar Powered Aircrafts!

Yes, it’s true. NASA has been working on a series of solar powered unmanned aircraft since the 1980’s.  Pathfinder, Pathfinder Plus and Helios Prototype, is the result of NASA’s efforts to use solar power for long duration high altitude flights.

Solar-powered aircrafts

The Helios Prototype (above) reached a record altitude of 96 863 feet in late 2001, which is the highest altitude reached by an aircraft that is not powered by rockets for sustained horizontal flight.



4. Solar Energy is Nuclear Fusion

Nuclear power is a term we use to describe ways to harness energy through nuclear fission and fusion processes. Conventional nuclear reactors rely on the fission of uranium atoms to produce heat, which we use to generate electricity. Nuclear fission processes releases vast amounts of heat, but is still far from the potential of fusion, the exact same phenomena that powers the Sun (as well as other stars).

The Sun

Scientists are now working on what can be described as “the holy energy grail of energy”, or how to harness nuclear fusion, and they have been doing so for the last 70 years.

If we are able to tame this power before we reach a century of scientific efforts is uncertain. What is certain is that once we reach this milestone, the way we harness energy will be revolutionized. We are no longer dependent on resources when it comes to energy. Terms like renewable and sustainability will become meaningless. We will move into a new paradigm where knowledge = energy.




5. The Sun is Dying

Solar life cycle

You probably know that solar energy is considered a renewable energy source. The reason for this is that the electromagnetic radiation emitted from the Sun (also known as sunlight) will be around for us to harness, and will not disappear anytime soon:

According to astrophysics, the Sun was born about 4.57 billion years ago and has another 6-7 billion years before it becomes a white dwarf (a planetary stage where nuclear fuel in the star is exhausted).

Fortunately you don’t have to worry about this.  When the hydrogen reserves on the Sun are depleted, it will expand into a red giant, and will likely swallowing the Earth