Solar leasing is a relatively new method of obtaining the benefits of off-grid power generation without the large and, in many cases, prohibitive initial investment. Purchasing and installing a new residential solar system can easily require a five-figure investment. Even with federal and state tax incentives and rebate offers, laying out that type of up-front cost essentially puts solar power technology out of the reach of a large segment of homeowners.
An option in time past was using the equity in a home to finance the purchase and installation. To sweeten the pot, the government made the interest paid on a loan for solar power technology a tax-deductible expense. However, with the downturn in the housing market, many people found their home equity eaten up by dropping home values essentially making the equity loan approach a non-option. Utilizing the “where there is a will there is a way” business model, solar companies have made available to residents a New Jersey solar lease option.
In general, the NJ solar lease route to off-grid power is designed to allow the consumer to make lease payments that amount to less than the savings they realize on their electric bill from the power companies. In this manner, the New Jersey solar lease market is now open for the average homeowner. The solar company is responsible for securing financing for the purchase of the equipment, usually through an investment firm, making them the solar technology purchaser. Therefore, for any NJ solar lease option, the solar company is going to receive all of the incentives that are available, including the tax deductions. However, the vested interest the solar companies have in the success of this market does give some confidence that the homeowner will benefit financially from the transaction while contributing to clean energy efforts.
Finally, it is also important for homeowners to recognize that the solar leasing option is not always a sound financial approach for everyone. Typically, the solar company will come out to the prospective purchaser’s site to determine installation requirements, the power that one can reasonably expect to receive and the current electrical power requirements of the homeowner. Though this approach may make solar power leasing options financially prohibitive for some consumers, it does demonstrate the commitment of the solar company to the purchaser in regards to financial benefit. What more could one ask?