Cost of Solar Development

The costs of solar panels, the vast majority of which are manufactured in China or South Korea, have been dropping in the past few years.

We’ve seen major solar panel price drops through 2019 through 2022.  These price declines have not been as dramatic recently.  And all evidence points to a bottoming out of prices now. At any rate, the price of the panels themselves only accounts for at most 25% of a system to be placed on your business or home.  A major component of the installed price is soft costs and labor; in solar, this would encompass the cost to hire experienced Master Electricians. 

Regulations here in Massachusetts mandate a ratio of one State-Certified Master Electrician for every two crew members on a solar installation crew.  Work for licensed Electricians in the state had been slow from 2007 through 2014.  For this reason, there was a virtual halt in apprentice electricians obtaining their Master, or Journeyman’s licenses.  Now, with the economy, and construction in particular booming, there is a shortage of Master Electricians.  For that reason, despite the drop in solar panel costs, solar development costs will likely begin to grow in the near future.

Purchase your Solar rather than Lease

We at Apache Solar are dedicated to getting homeowners into an ownership position with their solar, as opposed to the leasing option most of the companies are offering.  When you lease your solar, you are putting you’re a leasehold interest on your property.  A leasehold interest is the deed restriction you have when you have leased a certain part of your fee simple property to an outside entity.  This means you are obligated to continue payments to this outside entity for the duration of the lease.  In the case of the major solar companies such as Solar City, Vivint, RGS, OneRoofEnergy, Sunergy and the others, these leases are for a minimum of 20 years.  What are you getting in return for entering into this lease?  An immediate slight decrease in your electric bill.   Now, sales pitches from these leasing companies include projecting increases in electric bills in perpetuity, and say that’s what you are saving yourself from these increases.  You are, but you are giving up far more by not investing directly in your solar.

The company holding a leasehold interest on your roof will take the Investment Tax Credits, they will take all of the Solar Renewable Energy Credits, and they also get a depreciation write-off.  So, it doesn’t take long for them to pay for the system they have installed on your roof (often it is comprised of below-par equipment.)  The average homeowners may be staying in their current home for another seven years.    In the event of a sale, instead of owning outright a clean-energy generating solar system, which adds value to the property, the owner is straddled with a leasehold interest, or deed restriction, which in fact has been problem in property transfers.   With 0 down solar loans, the homeowner should absolutely be taking ownership of their solar and taking advantage of these breaks.

Very few people improve their financial position, or add to their net worth by assuming a leasehold interest.