Solar Installers Pivot to Leases Following Tax Credit Expiration
In recent months, the solar industry has undergone significant changes. The expiration of federal tax incentives for purchased solar panels is compelling installers to pivot toward leasing options. This shift is especially evident among smaller installation companies.
Transition to Leasing Models
Micah Gold-Markel, the owner of Solar States, has observed the change firsthand. Traditionally, his company focused on selling solar panels directly to homeowners. However, following the end of tax credits last summer, many homeowners are now opting to lease panels instead. This new approach involves third-party ownership, where companies like LightReach own the panels and lease them back to consumers.
Changing Industry Landscape
The residential solar market has witnessed a drastic alteration in ownership dynamics. Data from Wood Mackenzie indicates that over half of the solar installations in the U.S. now belong to leasing companies. With around 5.8 million homes utilizing solar energy, this marks a significant change in the industry’s operations.
- 5.8 million homes in the U.S. have solar, representing 8.2% of homes suitable for solar.
- Over half of new installations are owned by third parties.
Gold-Markel notes that harnessing solar energy should be about ownership. He insists homeowners typically prefer to control their energy future rather than lease it. However, the current trend towards leasing may offer viable options for customers looking to save on upfront costs.
Consumer Considerations
While leasing can make solar energy more accessible, it also brings potential complications. Leasing contracts can affect a property’s value and result in service-delivery issues, especially for companies that fail. Many solar company owners, like Joy Seitz of American Solar and Roofing, remain skeptical of leasing models. Seitz argues that complexities in these financial products can confuse customers and lead to issues during property transactions.
Choosing the Right Options
As consumers consider rooftop solar, several critical strategies can help protect them:
- Be aware of high-pressure sales tactics.
- Research companies thoroughly before engaging.
- Examine leasing contracts closely, focusing on potential escalators and removal costs.
Experts recommend working with trusted, local installers and utilizing resources like EnergySage to compare options. Consumers should also take their time to review any agreements before signing.
Maintaining Solar Installations
Despite the challenges surrounding leasing, the solar industry continues to adapt. As businesses like Solar States navigate these changes, they aim to ensure sustainability and support for their employees while meeting the needs of consumers. Gold-Markel emphasizes the importance of using solar energy effectively, preserving its benefits while adjusting to a shifting landscape.
