Purchased Solar Will Be More Common Than Leasing In 2017

A recent article by GTM Research predicts that solar leases and PPAs will be replaced by solar systems purchased outright by homeowners.

According to the data, solar leases saw its dominance peak in 2014, representing approximately 72 percent of all installed residential solar for that year. However, next year will see cash purchases or loans taken out by those who wish to go solar at a higher percentage than leases.

See the graphic below that shows the decline in leasing through 2021.
solar lease decline trend
The report sights two primary factors for this changing solar financing landscape; the quicker growth of local companies and the decrease in the cost of solar. Also, many of the larger solar leasing companies have been struggling of late.

Another bonus for homeowners as they move away from leasing is the abundance of financing options that currently exist. There’s never been more options for those looking for a solar loan.

The math just doesn’t make sense for leasing. It never really did. Leasing companies used scare tactics and obfuscation to seal their expensive deals. This news really did not come as a surprise as Solar Power Now has taken a stand against solar leases for years now. Leasing has always been, by far, the most expensive way to go solar.

On a whole, this is great news for the industry. Residential solar will continue to expand. The primary change being that the smaller companies will continue to cut into the market share of the large solar leasing outfits.

A decrease in the overall cost of solar has had the industry seeing more outright cash purchases, or at least a good percentage with significant down payments. Return on investments still look good after some minimal finance charges are accounted for.

We can all look forward to a much more level solar playing field in terms of both installation services and financing options.

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