Most People Choose the Costliest Route to Going Solar

By Lisa Halverstadt, Voice of San Diego

The vast majority of new solar power customers in California are going solar in a way that costs them more money in the long run. About 70 percent of new solar customers in California are getting panels with leases or power purchase agreements, which has them paying for the energy their panels produce rather than regular monthly sums, according to a National Renewable Energy Laboratory analysis released earlier this year.

There are two big reasons for that. One is obvious. Cost-wise, going solar isn’t much different from any big purchase – people who buy solar panels come away with a better deal over the long haul, but leasing is attractive to people with less to spend up front and who don’t want to make the commitment.

There’s a big catch, though: Solar experts agree purchasing the panels usually pays off more over the long haul, especially with a federal tax credit that shaves up to 30 percent of the cost off both cash purchases and loans. Buyers immediately see energy bill savings, and once they recoup their upfront costs, those lower bills mean more money in the bank. Twenty or 30 years in, customers who lease or enter into a power purchase agreement with a solar company may still be paying – and end up spending far more than those who opted to buy.

The Renewable Energy Laboratory, the federal government’s energy think tank, concluded in a study earlier this year customers who get bank loans pay as much as 29 percent less per kilowatt hour of energy than those who go with a 20-year power purchase agreement, which bills customers based on the power their leased solar systems produce each month.

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