No Solar Leasing in Michigan?

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This seriously burns my biscuits.

Lately, I’ve been hearing a lot about this incredibly good idea called Solar Leasing. In a nutshell, it’s renting solar panels. This alleviates the enormous up-front cost associated with purchasing the system, as well as the not insignificant ongoing maintenance costs.

Most programs work like this:

  • * The company designs a custom setup for each customer’s power usage, roofline or other install area, and budget
  • * The customer signs off or asks for tweaks before signing
  • * The contract is set up for X years at the current price of power from the customer’s pre-solar provider. The price will not go up for the duration of the contract, while the price from the power company assuredly will. Thus, the customer is locking in a lower price for up to 10 years.
  • * The solar leasing company takes care of all routine maintenance, free of charge. Things like a baseball through a panel would be charged-for in most cases, just as with other rental items receiving damage.
  • * Excess power (if any) is sold back to the grid.

In many cases, the first year after installation does not see a reduction in the electric bill, as the rate paid for the system will likely keep matching the grid-based power price. However, each year after installation will see more and more savings as the price of grid-based power goes up.

Let’s say we sign our contract at a rate of $0.16/kwh. We have that price locked in for the duration of our contract. Next year, DTE will assuredly raise their rates, but we’ll still be paying 16 cents for our, plus selling any excess power back to the grid for a profit.

Why wouldn’t we want to do something like that, right?

I first contacted a company called CitizenRE, to see what they could do for us. As it turns out, nothing – they have no service in Michigan.

I refined my search and found Michigan Solar Solutions: “We are a Michigan company, installing Michigan products, with Michigan labor.” Outstanding! I contacted a sales rep, who gave me some sad news: There is no residential solar leasing program in Michigan currently.

Crushed, I asked him how I could help further this important issue. Is it legislative? Are the power companies blocking it? What’s up? This was his reply:

“As for leasing, I don’t think it’s legislative.  I think the lending or
leasing institutions don’t see it as a viable or profitable market to be in.
From what I’ve heard there are financial institutions in California that
lease systems but none here in Michigan yet!

“If you want to lobby something I would try to get Michigan to get on board
with some state incentives to help the solar industry survive.  Even if we
could get the sales tax from renewable projects exempted this would save our
customers 6%.  Governor Snyder needs to do something for solar and wind
projects and promote sustainability.”

Ok, green-oriented people: TALLY-HO!

I’ve started a petition – will you please help me get our Governor’s attention by signing it?

Exempt sales tax for solar & wind power residential installations

Additionally, I have sent a letter to our credit union, asking for them to back solar leasing programs, and I’m writing letters to the Governor and my state legislators, as well. I hope you might consider doing something similar to promote renewable energy!

Creating tax incentives is the first step toward a viable solar leasing program in our state.

To give you an idea of just how much up-front money is required for residential solar installation, I’m going to share the figures the sales rep provided for me. You can download the full spreadsheet via this link – the figures below are the nutshelled version. IMPORTANT NOTE: The representative from MSS let me know today that the DTE incentives are purely speculative at this point, as they have not yet released their incentive program specifics for this year. The amounts listed may therefore be incorrect.

System Specification:

18 x 255 watt panels = 4,590 watts

System Design, Parts, Permits & Labor: $24,097.50

Total cost plus MI 6% Sales Tax: $25,543.35

DTE Upfront Incentive: $11,016.00

Customer Out-of-Pocket before Tax Credit: $14,527.35

30% Federal Tax Credit: $7,663.01

Net cost after DTE Incentive & Federal Tax Credit: $6,864.35

Estimated 20 Year Electric Savings: $18,427.67

Estimated 20 Year Profit: $24,232.35

Cash needed at contract signing: $14,527.35

Final payment (DTE upfront incentive can be used as final payment:) $11,016.00

That’s not chump change. 

Not to mention, if we sell this house before the system pays for itself, we’re just flat out the money. With solar leasing, that’s not the case.

Solar leasing makes good sense.

I would love to hear about your experiences with renewable energy sources, particularly if you have installed solar power in your home. Does your state have a solar leasing program?

 

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12 responses to No Solar Leasing in Michigan?


  1. eforeverything

    How do the leasing programs work in California or other places? Would it just be easier for someone to get a loan if the capital/installation cost is too much for them?

    As far as the subsidies and tax incentives, those are usually a question of political power. Private power providers tend to lobby hard against policy that would take away demand for their service, and they do hold a fair bit of sway with governments given the economic importance that they hold. Perhaps there are lobbies that you could approach that would have similar interests to you? ENGOs, solar/wind industry, others? Good luck!

  2. choseph

    What is the realistic payback there though? I still think it would be better if there was a bond market specifically for solar installations where I could buy in to partial ownership — not through leasing an installation on my house with crappy solar exposure, but through leasing an installation on someone elses house where there was ideal solar exposure and payback timelines. It might be better for your wallet and the environment if you were buying into solar installed in some other state.
    http://www.reddit.com/r/SomebodyMakeThis/comments/bnvlj/smt_residential_solar_partial_ownership/

  3. Marissa T.

    Thanks for putting this up on FB! I live in Ohio but will gladly sign your petition! It’s stupid the government doesn’t support green energy better.

  4. Wishing you the best of luck in this endeavor, but having been down this road on a number of green issues, my gut tells me you’re pissing in the wind (no offense.)

    There’s simply too much money pouring into various pockets from petrol-based fuels and products. Michigan is not in especially good financial straits currently, right? Do you think your governor is going to want to give up any of his precious state income, even “for a good cause?” Six percent of however many thousands of dollars get put into solar/wind/etc is probably not an insignificant sum.

  5. Erin D.

    Thanks for the feedback, folks!
    eforeverything – I only know what I’ve heard and read on other states’ programs, and they haven’t gotten into the legal nitty-gritty and ordinances. My primary concern with a loan for a permanent installation is the likelihood we’ll sell our house within the next 10 to 20 years for a place with more land. If we sell before the system has paid for itself, we likely won’t be able to recoup the cost in a sale.
    choseph – very interesting idea, thanks for that link.
    Marissa – Thanks for signing the petition!
    Jackon – I agree it’s unlikely big business and most government officials will do the right thing just because it IS the right thing to do. We have to make it appealing to them on some level, such as attracting new industries, jobs, income streams, and residents. My hope is if enough people get on board with a grass-roots movement (which is never an easy thing to get started,) officials may be forced to listen. Thanks for the input, much appreciated!

  6. Bob D.

    Best of luck – thanks for the link to the Michigan-based solar company. The wife and I are thinking of going solar next year, and keeping it all local would be great!

  7. Hello! I recently was approved by consumers energy to take part in their advanced experimental renewable energy program. They pay me about 6 times the going rate for solar produce. Sadly the cost of the system is to high so I have been lobbying solar lease firms. I currently may have interest from sunjevity. We need to get one pilot project going in MI so others follow suit! We should band together and contact them letting them know we are interested in Solar!

    • Erin D.

      Hi Brett! I would definitely be interested in talking to any companies have expressed interest in doing solar leasing in Michigan. If you get any more information, please let me know. 🙂 Thanks!

  8. Kristen

    I am totally on board with helping start a solar leasing program in Michigan. We were kicking around purchasing a solar system, but with the economy here we just can’t produce the $14,000 up front to get started. I just saw a “This Old House” episode that talked about solar leasing – so here we are in Michigan without the opportunity to do so. Any new info please let me know!

  9. CJ

    I did a google search for Michigan solar lease and come up with this page:
    http://www.michigansolarsolutions.com/financing_rebates.html

    A good webpage about the California solar leasing program is here:
    http://www.sungevity.com/

  10. Kyle

    I’d love to get solar leasing in Michigan, but I think you’re barking up the wrong tree.

    There’s no point in requesting legislation, this is purely a commercial issue. Leasing has been shown to be much more financially stable than pure selling (more clients are able to enter the market and payments come more steadily) but the suppliers refuse to believe this.

    You cannot push for legislation to make people more intelligent. 🙁

  11. Marianne

    I think a new petition should be started – one with more than 50 possible signatures. This is a great idea – I’ve been looking for a solar option both at home and at work and so I spoke to Sungevity last week about a residential or commercial application. Unfortunately, they stated that they are not active in Michigan at all. This should have been happening 40 years ago but you know what they say – the best time to plant an acorn is…today.

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