Should Aussies follow the American way when it comes to solar leasing?
Are Americans are getting their butts handed to them with long-term solar leasing? And what can us Aussies do to come out ahead?
It seems the suits perched in the top floor offices on Wall-Street are finally taking notice of solar energy. And that could spell bad news for American consumers.
American energy firms like SolarCity, a growing solar-energy giant based out of California, have been offering long-term, relatively affordable leasing arrangements to consumers for years; either by financing the installation of panels or charging users by the kilowatt-hour and selling the remaining power back to the grid.
But those arrangements are about to get a whole lot more expensive now that they, and firms like them, are going public. Why? Because their shareholders, many of them massive hedge funds and banks, are demanding an American-sized profit which can only be attained through skyrocketing costs to consumers.
And now SolarCity and firms like them are expanding to Australia.
No thanks mate. We Aussies do things a little differently than our friends across the water.
Who wants to be locked in to a multi-decade solar leasing contract with a faceless American corporation and their investors?
What happens when you want to sell your home? Talk about a bureaucratic nightmare with heaps of negative financial implications.
And what happens when new renewable energies are discovered, or markets shift positively, thus reducing the price of energy as a whole? You’re stuck paying the same rate you negotiated twenty years ago.
Australians are discovering a different, more sustainable, more responsible, and far more inexpensive route: purchase your own system.
Unlike many of their counterparts in America, Aussies are choosing to own the roofs over their heads rather than leasing them from monolithic corporations.
They’re also selling the energy they don’t use back to the grid so that their fellow citizens might utilize it, all the while raking in a tidy sum that can offset their own energy costs and provide them with up to a 35% return.
Here are a few helpful tips for the savvy Aussie energy consumer:
- Purchase a quality system. It shouldn’t be plated in gold or light up in a dazzling Holiday display for all of your neighbours to marvel at, but if you want it to last for a long time, then make the investment up front and buy a durable, quality system.
- Inform yourself. Don’t be the knob that pays a ludicrous amount for their system. Some energy firms are more than willing to grossly overcharge an ignorant consumer for an energy system that might very well cost them ten to forty percent less elsewhere. Get quotes from three reputable firms that are actively competing for your business. Not only does this keep your personal costs down, but it keeps the industry costs as a whole down.
- Self-Finance. If you’re able to purchase with your savings or roll it into your mortgage, then do it. Don’t rely on the stiff finance terms the large energy companies offer. Remember, the size of their profit margin is determined by what you let leave your bank account. Keep your money and let them keep their solar leasing contracts.
- Optimize your Return. Find an installer that will give you an estimate of return based on your daytime household energy usage and system size. Put that sum side by side with a basic investment portfolio and you’ll be amazed by the results. The return on solar energy can be better than what you’ll get with many high-yielding stocks.
Not only will your self-funded and renewable solar system pay for itself, but it can also provide you with a nice stack of cash on top of your investment.
After the system has paid for itself, it’s free energy for decades. And what self-respecting Aussie doesn’t like that?
Leave the stifling solar leasing contracts for the Yanks.
And, of course, only do business with a reputable, vetted, accredited installer.
About Finn Peacock
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I am glad I got my solar panels as I don’t have to worry about finding money for ever increasing power bills and I know it is good for the environment.
The only thing I regret is choosing the wrong company as the customer service is atrocious and the installers didn’t even consult with me as to where I wanted the panels and inverter. This meant I had to get the inverter lowered to a suitable height for me and the panels are too close to the gutter.
They say you pay for what you get so it must have been the case with my panels as they were the cheapest on offer at the time.
Is this fact or speculation? I am a great fan of Elon Musk (chairman of SolarCity) and admire his passion and vision for a better future by prioritizing technological development over profits (Tesla electric cars, Space X reusable rockets), he puts his money where his mouth is and has not built his businesses on the “maximize profit above all else” model so common in the USA, so I am surprised that he now wants SolarCity to “hand americans their butts”.
I think Elon Musk is a force for good, and a genius. And the more solar on roofs the better…
But I also think that – if you have access to your own cash or finance (e.g. mortgage) then buying outright is a much better option for most folks, so think long and hard before going for a solar lease instead of buying.
You are talking nonsense. At present rebate rates, it is not viable to go solar. Some of us are quite happy for solar companies to lease the panels and then feed excess electricity back to the grid at no cost to us. It is about time that Australia joined this revolution. Good on Elon Musk for putting his money where us mouth is – which is more than I can say for the entire Australian solar panel retail market. The local guys can spout all the rhetoric but have no faith to invest in what they believe the rest of us Aussie consumers should be doing – putting money into solar panels and recouping it over time.
The rebates given by those in power don’t always stay the same. Change of govt. change of rebate, guess what? they never go UP.
Next’ panel efficiency goes down as the air temperature goes UP. Just because it’s bright sunshine doesn’t mean you make more power.
How do you go about owning or leasing solar panels if you are renting a house under a state public housing? The system needs to be moved if you move or sold to someone else if you move to somewhere not suitable for solar (eg an older person going into a nursing home).
I have panels on my own house but my Mum in a publicly owned house is facing rising power bills.
That is a very good question.
For private renters there are options now available where you can put the panels on your roof for free, and then buy the solar electricity from the installer for about 20-25c per kWh.
But – and it’s a big but – you would need the agreement of the landlord. (In your Mum’s case this would be the state government). The benefit for the landlord is that after a number of years the solar system would belong to them and would add to the value of the property (at no cost to them).
The thing to be careful of, though, is that under these “Power Purchase Arrangements” (PPAs) you have to buy all the solar energy produced from the panels whether you use it or not – and if you don’t use it in your home you’ll only get 8c per kWh selling it to the grid. So you need to be sure that the system is properly sized to your daytime usage (i.e. not too big.).
Realistically I think we would need the state government to initiate a scheme to put solar on public housing roofs. This is actually happening in the UK as we speak.
Hope That Helps,
Finn
Thank you, that would make it unsuitable for my Mum, as SA Housing are probably going to knock these older houses down for redevelopment and Mum is talking about moving to a smaller place. The Housing Authorities should look at solar on public housing, it would be fair.