My husband and I have been very interested in solar energy for some time now.  Our dream home would be as ‘off grid’ as we could comfortably make it and solar power would probably be a big part of this.  In our case, we don’t have much in the way of green living ideals but I would like to scratch hydro off of my list of bills to pay every month.  We have looked into having solar panels put on our roof but until now the cost has been prohibitively high.

Recently though, I came across a company in the area that offers to install and maintain solar panels on a homeowner’s rooftop for free.  The company then sells the energy back into the grid and pays the homeowner $200-1200 per year depending on how much energy is generated.  The agreement lasts for 20 years at the end of which, the homeowner buys the solar panels for $1 and begins collecting 100% of the energy profits.

My first inclination was to think that this arrangement was a huge scam. I could make a lot more than $200/year if I just installed my own solar panels! But then I would need at least $30K to have the system installed- $30K that I don’t have.  Then I thought that $200 was way too cheap to let someone else use my rooftop real estate to turn a profit.  On the other hand, I haven’t come across anyone else asking to rent my rooftop…

The more I thought about it, the more I thought this might actually be a good deal.  Currently, my rooftop makes me no money.  If I signed a contract with this company, I would have $200-$1200 more per year than I had before- purely passive income too! The solar panels would also add value to my home.  We do plan to sell our home within the next five years and a promise of passive income with a $1 buyout at the 20 year mark would be a pretty sweet ‘cherry on the top’ of our real estate offerings. Further, the solar panels protect your rooftop, another huge plus for potential home buyers.

This isn’t something we could do within the next month or so since we will need to put a new roof on our home within the next year or two but once that is done, I am strongly considering doing this!  What do you guys think? Do you think this is a good deal or a rip off? Do you know of any other good offers available in this market? Have you heard any horror stories or drawbacks regarding deals such as these?

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7 Responses to Solar Panels: Good Deal or Not?

  1. Sheila Groleau Smith says:

    If you are planning on selling in 5 years, why would you bother with solar? If the contract has to be renegotiated with a new buyer it may be detrimental to selling. You may have to pay a transfer fee or some such thing to new owners. I’d get the info on “What if we have to sell our home?” From the solar company first and make decisions from there. I don’t know your reason for selling the home as I am new to this blog. I personally don’t believe in starter homes so I don’t know if you bought something to small for life.

    • Marianne says:

      I would have to look into it further but from what I’ve read so far the contract just gets switched over to the new homeowners- no hassle, no changes. Our home is small but I don’t mind it for now. We never intended to stay in this home for long- it was a fixer upper that we had planned to flip in a year or so. We’ve now been here 6 years and the house is mostly fixed up but some big projects in the area fell through when the economy tanked and we decided to stay in our house until that stuff gets figured out (we live kitty corner to a huge empty lot that we feel will dramatically raise our property value when it’s developed). Eventually we would like to have some land (we are downtown in the middle of a city) and there’s a good chance we may not even stay in our current area (we are transplants from about 3 hours away- we may decide to move ‘back home’ at some point).

  2. It sounds AWESOME because you’re basiclaly getting your energy for free and then on top of that getting paid for it. I can see zero downside to this deal. Zero. ANd if you sell your home, then it’s a selling point that people will like and costed you nothing to get. win win win situation!

    • Marianne says:

      Just to clarify, I’d still have to buy my energy from the local hydro company. The energy generated by the panels gets sold directly back to the grid and the company pockets all the profits except for the $200-1200 per year.

  3. Erica says:

    In Arizona (US) we have something similar, except the homeowner pays a monthly fee to the solar company instead of the other way around! I think it’s a smart idea of the companies that are installing the systems to do it this way, although they are eating the up front cost they will benefit in the long run and benefit the earth with alternative energy and homeowners in reducing their bills.

    If I had the ability to do this, I would probably do it.

  4. I’m a little skeptical myself.

    If anything happens to the solar panels, do they replace them for free? For example, if a hail storm damages the panels, are you responsible?

    What happens if something happens to your house because of the solar panels? Will your insurance cover it?

    When you need a new roof will they remove and re-install the panels? Is there a cost if they do?

    Is there a useful life for the panels? If they only last 20 years, that isn’t much of a deal.

    Lastly, is your monthly payment indexed for inflation or is it always $200/mo? In 20 years, with inflation, $200 is basically worthless.

    These are just a few of the questions I would have. I agree that you could probably earn much more than $200/mo, but then you would have to shell out the money up front.

    • Marianne says:

      Many of these are reasons we are skeptical as well. According to the company website, while the panels are under contract they fix and maintain them. Apparently, the main part of a solar panel (the transistor or something…) is expected to last 15 years so it would probably be replaced by the company once while under contract. I would think that obviously, owning our own panels would be the better route except that I don’t have 30-80K to shell out on solar panels. Then I am left thinking that I don’t know anyone else that is willing to rent my roof out… I will definitely have to get some solid answers to the questions you raised before jumping into anything… Either way, we need a new roof before we could consider something like this.

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