Does a Solar Energy System Make Sense for You?
There are many factors that should be considered before you sign a contract to install or lease a solar energy system at your home or business. Here are a few things to think about as you review your options:
1. Before you Buy or Lease: In 2017, the New Mexico State Legislature passed a law that mandates companies who sell or lease private, rooftop solar energy systems to residents or businesses must be completely transparent with regards to the costs and obligations that you, the consumer will be responsible for. View the bill that was signed into law.
2. Energy Efficiency First: Whether or not you go solar, it is always a good idea to become as energy efficient as possible. PNM offers a variety of residential and business programs to help you save energy and money.
3. Leasing versus Buying: The decision about how to finance your solar PV system depends on your situation and financial goals. Because everyone's finances are different, there is no one "right" financing option but there can be "wrong" ones, so be careful. You should look at all options before making a decision and make sure you know the true cost of the system over the lifetime of the agreement before you sign anything. It is important that you read - and understand - any contract that you sign, and we encourage you to ask questions about anything that does not make sense or is unclear. Remember that a proposal that looks "low cost" in the short term may not be the best financial investment for you in the long term. Also, it is important to keep in mind that:
- Most contracts - even those offering zero down - may have hidden costs and annual escalation clauses that will impact the overall cost of the system. These contracts will also specify what your obligations and liabilities are to the solar company, and they can vary significantly from company to company. Fine print may be hard on the eyes, but it can be devastating on the wallet if you do not make sure you've read everything.
- Some contracts stipulate that you refund your federal tax credit you receive to the installer in order to lock in a price or to realize the full total of the savings they propose. Read any contract or proposal carefully to see if this would apply to you.
4. Saving Money: When you install solar, many factors impact savings - some of which are known, and some of which are unknown. Known factors include the size of your home; the location, number and output of panels; and how much maintenance the system may require. However, there are a large number of unknown factors that will impact your savings, including actual system production, future changes to PNM rates, weather, the efficiency of your home and future technology, to name a few.
5. Going Solar Doesn't Mean You Are "Off the Grid": At night and on cloudy days with limited sunlight, solar systems aren't able to produce the energy needed to power a home or business. So even with solar, PNM customers who have safely connected their system to our grid still rely on it for electricity. Also, some energy intensive technologies - like a refrigerated air conditioning system - may require more power than a solar system can provide to power on during hot summer days. Finally, because solar customers are still connected to the grid, they will also be affected by outages impacting their home or business.
6. Is Your Roof Ready for Solar?: Before purchasing or leasing a roof-installed solar system, you should verify the condition of your roof. A typical roof lasts approximately 20 years on average. If you don't know when your roof was installed or last repaired, it is a good idea to have it inspected by a professional prior to installing a solar system. You also need to find out from the solar company what happens if you need to repair your roof once your panels are installed and include the costs associated with removing your panels and reinstalling them in your financial analysis.
7. Selling Your Home: Do you think you will move in the next 20 years? If you sell your home and have purchased your solar system, it will likely be considered an asset that could increase the value of your home. On the other hand, if you have leased your system, the debt associated with the contract could be considered a liability. Depending on your lease agreement, you could be required to pay off the remainder of the lease to sell your home; leave the system behind, which requires the buyer assume the lease payments; or pay the leasing company to move your system. All of these options could have financial costs associated with them, so it is important to consider them as you consider your options.Return to the PNM Customer Solar Energy Program