Decoding “Free” in the solar power sales pitch
‘Free solar power’ is the most rampantly used marketing technique to entice customers and push the sales envelope. Some have got lured by these freebies and unfortunately landed with dubious solar contracts. Free solar power for your home sounds great, but how does it work or does it work the same for everyone? Before signing a solar contract, it is imperative to understand how free solar power works and what are the pros and cons of it. When going solar, the two options which involve quick money down are either buying a solar power system or solar loans. These options may not be affordable to everyone. Energy market leaders such as Suntuity, offers innovative financing options such as Solar Lease and Power Purchase Agreements (PPA), to make solar energy available to you at no upfront cost. Free solar power concept is usually associated with solar lease or PPA options, which provides convenience to solar aspirants. Both the financing options come at $0-down. In a solar lease contract, the consumer agrees to pay a fixed monthly “rent” for the estimated energy production calculated based on the previous usage. With a solar PPA, instead of paying a fixed monthly amount, consumers agree to pay only for the power generated by the system at a fixed per-kWh price. However, fixed energy production is not guaranteed in a PPA agreement.
Commonly used terms in Solar Leases & PPAs
1. Solar power system Installation: With a solar lease or power purchase agreement (PPA), the upfront cost of solar panels, equipment, and installation is borne by the solar service provider.
2. Tenure agreement: Residential solar leases are usually for 20 to 25 years.
3. Performance & maintenance: Solar panels require little to no maintenance over their lifetime; the company will still monitor the system's performance to ensure that it is operating correctly and producing the estimated energy output. The service provider does system monitoring, repair, and maintenance.
4. Monitoring: Real-time monitoring of energy production is made available to homeowners through intelligent monitoring tools, which can be accessed online, smartphone or tablet.
5. Buying the system: You can buy the solar panel system at any time during the lease term at a price defined in your contract or its fair market value, whichever is higher.
6. Selling your home: If you sell your property, you can transfer the remainder of your lease to the homebuyer or buy the system from the leasing company yourself and include it in the sale of your property.
7. At the end of the term: When your agreement ends, you can either buy the system outright, have the leasing company remove it, or leave the system in place and renew the contract with the owner.