Should I Buy, Lease Or Rent?
A majority of Singaporean have seriously considered putting solar panels on their house or have already done in 2019.
Homeowners today have more options for solar than ever, but the best choice depends on the year-round weather.
Net settlement of energy program is still ongoing in 2020, regulated by EMA.
2020 is shaping up to be a dramatic year for solar power.
Starting this year, for instance, most new homes in Singapore will be required to have solar panels. Some homeowners have considered to add solar panels and batteries to their houses instead of sell back excess solar electricity to the grid.
When weighing whether to buy, lease or subscribe to a solar energy system, it's worth considering whether there are hidden costs or pitfalls.
Buying Is The Best
If you have the cash, most experts agree that buying a solar system outright is a better investment than leasing or taking out a loan. Customers should check electric bills to estimate monthly energy use when deciding what size system to buy and calculate how much will sell back if the solar power generation is more than average electricity consumption. Check with our Solar Expert to know how much savings you can make.
Make efficiency upgrades elsewhere in the home, such as buying new windows or energy-saving appliances, before choosing a system to help avoid purchasing a solar array that's larger than necessary.
We shall conserving the amount of electricity that you use and installing solar go hand in hand. You can have one without the other, but it makes more sense to do them together.
A good solar company will help calculate the appropriate size for a solar array.
With an array costing S$20,000 or more, solar companies and others are increasingly offering loans to help alleviate the upfront cost. The solar loan market grew 40% in early 2019 from the same time last year, according to Wood Mackenzie.
For buyers, the sooner the better. The electricity price is revised every quarterly. Electricity tariff in Singapore rises 3.5% in January-March 2020 to hit 5-year high. What are you waiting for?
Leases Can Save Money, But May Have A Catch
Leasing a solar energy system may be an attractive option for people who don't have the cash to buy a system.
Solar Era estimates that customers who lease panels save 20% to 40% on their electric bills. Customers can choose a fixed monthly rate or start out with a lower monthly payment that increases over time. Leases at Solar Era typically last about 20 to 25 years.
Lease companies also handle repairs, and "if the system doesn't perform, the customer doesn't pay," said Michelle Khoo, chief commercial officer at Solar Era.
But leases have declined in recent years, as panel prices fell and loan options increased. "Usually it ends up being more expensive over the life of the project (to lease)," said Brett Simon, senior energy storage analyst at Wood Mackenzie. "It's economically more efficient if you have the capital to just buy a system."
Lease customers aren't guaranteed to save money, and entering into a lease agreement can complicate home sales.
That was the case for one of the client in Bukit Timah, who began leasing solar panels in 2016. When the client recently decided to sell his house, his real estate agent told him it would be difficult because of the solar lease. The lease could be transferred to a potential buyer, but some sales prospects wouldn't want to take it on.
The client tried to find out what it would cost to buy out the rest of the lease agreement and found out he wouldn't be able to buy it outright until he was five years into the contract. He wanted to find out more but said he had difficulty getting a leasing company representative on the phone.
He feels like he's probably at a wash or paying more than he was before solar. He appreciates about running his air-condition in the hot sunny day but he regrets this whole thing eventually.
Subscribe And Save?
Everything from diapers to cars can be bought with a subscription, and now you can add solar panels to the list. Customers, who are still hooked up to their electric utility, pay for any additional electricity that they pull from the grid.
Richard Goh, who had solar panels installed in his home, saving his a couple hundred dollars per month, he said.
But beware of fees to uninstall a system. Some solar company was charging a S$1,500 fee to remove leased solar panels, but has since stopped charging that fee, a spokesman said.
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