HEC is offering residential solar leases to homeowners instead of solar loans
HEC’s Solar for All residential household program will only offer solar leases. For those familiar with renting and mortgages, that may seem confusing – isn’t it preferable to own and get a loan if the overall price is the same? That may be true for housing, but for many homeowners, solar leasing offers significant advantages over solar loans or purchasing a system with cash. Here’s why leasing can be the better choice:
Maximized Tax Credit Benefits
One significant benefit of leasing is that homeowners can still take advantage of the federal solar tax credit (Investment Tax Credit or ITC), even if they don’t have enough tax liability to claim it themselves. Many households don’t owe enough in taxes to fully utilize the credit, which at 30% of system costs can range from $5,000-$15,000 depending on the size and type of a solar system. When leasing, the solar company claims the tax credit and passes the savings on to the customer by lowering the monthly lease price. This ensures homeowners benefit from incentives without needing to navigate complex tax filings. And with HEC’s Solar for All (SFA) program, this process will always happen since each household must see post-solar energy bill savings of at least 20%.
No Operations & Maintenance Responsibilities
Another advantage of leasing is that individual homeowners aren’t responsible for operations and maintenance (O&M) of the solar system on their roof. With a leased system, the leasing company owns the system and performs any needed maintenance, makes any necessary system repairs, and monitors performance. In HEC’s SFA program, the vetted leasing partners are required to offer these O&M services. This removes the financial risk of unexpected repairs, which can be costly and/or time consuming if major components are damaged or stop working.
No Money Down
Leasing requires no money down before or during solar installation, making solar more accessible by eliminating upfront costs. Unlike purchasing – which requires a large, upfront investment of $15,000-$50,000 depending on the size of the house & energy consumption – and loans – which often require down payments, carry interest, and can impact credit scores – leasing allows homeowners to start saving on electricity bills immediately without any initial financial burden.
Fixed Monthly Payments & Immediate Savings
In contrast to loans and purchasing, where savings take years to offset the initial down payment or investment, leased solar provides financial benefits right away. Leases offer fixed monthly payments, providing predictable costs and immediate savings. Thanks to the structure of HEC’s SFA program, participating households can likely expect around 20% savings on their electricity bills from installing solar.