by Rick Irizarry
It used to be that the Solar Lease was the only way that people could afford to go solar, in fact my own 4-year-old solar system is leased.
A few of the reasons why leasing was so popular were that you didn’t have to come up with any money as a down payment, and the lease payment was typically less than you were paying the Utility company for the same amount of electricity, which resulted in saving money each month from day one. That sounded good to me since my daughter was getting married soon, and my son still had two more years of college to be paid.
Now let’s fast forward four years to the present. The creation of specialty solar financing companies like Mosaic, Sungage, and others have made it very easy to finance the purchase of residential solar systems. These companies provide reasonable interest rates, multiple term loans, and understand the solar industry and incentives that help you purchase your solar system. Even local banks and credit unions now offer “solar loans” based on your homes equity. As the solar industry continues to grow, more and more sources of funding are becoming available.
So, you may ask, “Am I better off with a lease or a loan?”
Well the answer is different for different people with different circumstances. To give an example, a good solar consultant will ask you if you currently pay state and federal income tax? Why do they need to know that? It’s kind of personal right? But this question actually shows that the consultant is looking out for you, and trying to find the best way for you to go solar.
In New York State there are three different incentives that help you pay for solar, and two of them are based on income tax credits. Tax credits are very beneficial, but if you pay no state or federal income tax, there’s nothing to credit you. You might be asking who doesn’t pay income taxes? But there are various reasons why someone might not pay income taxes, or pay very little income taxes. At the top of that list are retired people, collecting a pension, or are on some other sort of fixed income that is either taxed at a low rate or not at all. This segment of the population is growing!
Most of the time, if you can’t take advantage of all three solar incentives available in NYS, a lease will probably be the best fit for your situation. If you only pay NYS income tax, a lease can still be the best bet for you going solar. If you lease in NYS you are still eligible for up to $5,000 worth of state tax credits. The way that the tax credits work with a lease is really cool, with the tax credit being equal to the total amount of payments made in the tax year! Yes, you read that right! For an example, if your monthly lease payment is $80 and you made 12 payments in the year, you would be eligible for a $960 (12x$80=$960) NYS income tax credit in that year.
That’s more than 62 months of payments reimbursed back to you in the form of a NYS tax credit, or over five years’ worth of FREE electricity!
$5,000 NYS Tax credit / $80 per month lease payment = 62.5 months of lease payments.
If the solar company you’re speaking to does not offer lease and purchasing options, are they really looking out for you? Or are they just selling you what they have? SunPower by New York State Solar Farm is a SunPower Master Dealer (there’s only 30 nationwide,) we offer the ONLY lease provided by a solar panel manufacturer, as well as multiple options for purchasing. We pride ourselves on our ability to give you the best option for your unique situation, helping you to go solar in the way that makes most financial sense for you, and allowing you to take control of your energy future.