Storm Clouds in Solar Leasing Program Warns Energy Company CEO
WESTPORT, Conn., July 15, 2013 /PRNewswire/ — An energy company executive warns that a popular solar leasing program offered to Connecticut residents carries hidden risks for most homeowners.
“I suspect people don’t think they could be paying more for solar electricity in a few years than they are paying their local utility for conventional electricity,” said Jeffrey Mayer, president and CEO of Soluxe Inc., a Westport-based company.
Mayer pointed out that electricity prices from Connecticut’s two major utilities, CL&P and UI, have dropped since 2008. “Yet in order for consumers who lease solar to save money these rates will have to start rising again at a fast clip.”
“Electricity is one of the most volatile commodities on the planet,” Mayer said, “and that means it can go down as well as up. If rates go down – or stay relatively flat as they have the past few years – the solar lease will turn into a rainy day for homeowners.”
Prior to joining Soluxe Mayer was the CEO of MXenergy Inc., one of the largest retail suppliers of electricity in the country. MXenergy was purchased by Constellation Energy Group in 2011.
Mayer said that he recently received a letter from Sungevity, a California-based solar marketing company, which suggested that he could save as much as 15% on his utility bill if he put solar panels on the roof.
“The letter also claims that utility costs have gone up an average of 6% a year for 20 years, but the fact is that electricity in Connecticut has gone up less than 3% a year and has actually come down by over 10% the past 5 years,” Mayer said. “If those trends continue, not only will homeowners not save up to 15% — they may lose money on the deal.”
Mayer said that the Sungevity letter is qualified by footnotes that state that price and percentage savings are not guaranteed, “but the footnote is in tiny 6 point type that is almost impossible to read.”
“Solar leasing may make sense for non-profit institutions like schools and churches or for homeowners without an income,” Mayer said. “But before other buyers sign up for a lease they need to know that their electricity prices may not be going up fast enough to justify it in the first place.”
“I’m not sure why people would want to give away a lot of money to hedge funds and banks and not keep it for themselves,” Mayer added. Both the federal and state governments provide numerous tax incentives and rebates that customers can take advantage of to buy their systems, Mayer said, while under a lease the benefits go to the party that leases the panels to the homeowner.
Last month Connecticut’s Clean Energy Finance and Investment Authority announced the launch of a new solar lease program for homeowners, municipalities and businesses. The program is to be financed by a combination of public and private funds.
“I’m glad to see that the State of Connecticut is avoiding the type of hype that we’ve seen from many of the solar companies who are offering solar leases,” Mayer said. “They are being very clear to consumers that although they may realize short term savings from solar leases the long run is riskier.”
“If homeowners have an income and pay taxes they owe it to themselves to consider owning their solar system instead of leasing it,” Mayer said.
“It’s not a toss-up like leasing a car, which depreciates rapidly when you drive it off the lot. Solar panels will probably last 40 years. You’re going to save a lot more money if you don’t hand over ownership to investors like Google or Goldman Sachs,” he added.
Google and Goldman Sachs are among large companies that have provided financing for solar leases, Mayer said.
“Ownership instead of leasing is the only way for most homeowners to guarantee long term savings regardless of what happens to the prices utilities charge in the future.”
Mayer said that ownership also provides flexibility if a homeowner wants to sell his or her home before the expiration of the 15- or 20-year lease. “Homeowners need to know that if they decide to sell to somebody whose credit rating is not strong enough to assume their lease obligations they may have to pay to remove the solar panels from the roof or else buy them from the lessor,” he said. “That could throw a monkey wrench into the sale.”
Mayer acknowledged that homeowners that lease their solar systems do not have to worry about maintenance which is provided by the lessor. But he said that solar panels historically require minimal maintenance.
“There are no moving parts,” he said. “You don’t lease a Jungle Gym, so why lease solar panels?” he asked. “You’ll be using the solar panels long after your kids have grown up and have kids of their own.”
About Soluxe Inc.
Soluxe was founded in 2011 to help homeowners and businesses improve air quality and lower their energy bills through proven, affordable technologies such as rooftop solar, solar thermal, geothermal, insulation, cogeneration, gas furnaces, insulation, duct sealing and more. After conducting “Health&Wealth” Checkups for homeowners and energy audits for businesses, the Company finds qualified and insured contractors and manages their work through project completion. The Company also helps consumers finance their solar and energy efficiency installations for as little as $0 down.
CONTACT: Andrew Fried, +1-203-202-9788, firstname.lastname@example.org
SOURCE Soluxe Inc.