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Within the industry, with the consumer, there’s a lot of talk regarding lease vs. owned. Here
at SunGreen we design and install systems so that the homeowner or the business owner
can own the system. Part of the pros and cons of owning versus leasing are that if you lease
the system, you’re not going to get any of the government rebates and incentives which
are very rich, that goes to the lessor, that goes to the leasing company. If you own the
system, you’re going to capture all those tax incentives, and the cash rebates, which
really change the deal a lot. The only advantage to entering a lease agreement, is that there
is really very little money upfront, usually it’s a $1000 investment on the residential
side, but you’re never going to own the system, you’re never going to reap the complete
benefits of the system, but both economically and from the production standpoint because
at the end of the 7 years, when your system would normally be paid off and you would own
it free and clear through an ownership structure, you’re still locked into a lease, a long-term
lease which will continue on for another 12 to 15 years.
Another disadvantage of that is that when you go to sell your house, you also have to
sell the system, so it’s hard enough to sell your house in this economy, but you have
to sell a contract that goes along with the system, so that’s actually another impediment
to try sell your house. When you own the system, it’s just that, it’s just like owning
your car or owning any other piece of equipment in your house, you own it, you control it,
with that when the electric rates start to go up, you’re going to be able to hedge
against those, and produce free electricity for longer than your house will probably be
standing. Under a lease deal, the leasing company owns
the system, they own the power, and what you’re doing is making a payment to them, so the
credits that are accumulated belong to the leasing company, and not to yourself, so essentially
the way it works, they’ll guarantee you a slightly lower rate than what you’re already
paying, sometimes not, but sometimes very close, but then you’re locked into paying
that for the duration of the lease term and it normally has annual increases as well,
so you’re never really wiping out your electric bill, you’re maybe lowering it, you may
not be lowering it. With ownership of the system, you have complete control of that,
you’re going to earn those tax credits, you’re going to get that cash rebate, and
then when the system is paid off, you’re going to be making free electricity for the
duration of the life of
the system,
which is
a long time.