A leasing option to get residents rooftop solar panels without having to pay the upfront costs has lost its shine as falling fuel prices and the end of a generous state incentive reduced the savings they would see.

Homeowners who decide to lease essentially trade in their electrical bills to rent a solar-energy system. They pay their solar company a monthly fee for a certain amount of power production that offsets the electricity they would be buying from the electrical utility. Customers typically sign a 20-year contract for the guarantee that the system on their roof will provide a certain amount of power production.

Betting on the fixed 20-year rate against the electrical utility bill is a risk because the utility bill could decline. That’s what has happened with the drop in oil prices over the past two years. A typical bill from the state’s largest electrical utility has dropped nearly 30 percent since 2014.

Also, last year the state ended a program that credited homeowners with solar-energy systems the full retail price for the excess power their systems sent back to the grid. That credit was cut in half and could be further reduced in two years.

Many solar-energy companies in Hawaii have seen interest in leased solar-energy systems wane.

SolarCity, a San Mateo, ­Calif.-based solar-energy company, has stopped selling leases in Hawaii for solar-energy systems that send excess energy to the grid, said Jon Yoshimura, director of policy and electricity markets and regulatory counsel for SolarCity in Hawaii.

“Reason is that the lease is a product whereby customer and company expectations are agreed to over a 20-year period. The (new incentive program) was set for only two years … with no idea of what the tariff would be after two years or how that tariff would be determined,” Yoshimura said. “Basically, we were left without a product to sell.”

Still, the main driver of the drop in leases for solar-­energy systems is falling oil prices.

Hawaiian Electric Co. said Tuesday the typical electrical bill in June will be $129. That’s 25 to 30 percent lower than the typical bill two years ago, due primarily to the drop in oil prices.

“When you go in you know there are risks,” said John Cole, a Manoa resident who has leased his SolarCity system since 2012. “You are pretty much set on paying that amount for the full 20 years.”

Cole, a former Public Utilities commissioner, said when he originally installed his SolarCity system in 2012, his savings amounted to roughly $150 to $200 a month when factoring in the amount of his lease and his nearly wiped-out electrical bill and comparing them with what his full electrical bill from HECO would have been. Given the amount of electrical bills today, Cole said he sees roughly $50 in savings.

Cole signed a 20-year lease and pays about $200 a month for 8 kilowatts, or 34 solar panels.

“You’re hedging against uncertainty,” said Colin Yost, principal at RevoluSun. “You are locking in what your energy costs would be instead of playing the market. (If) it is a low enough price (to lease), it is pretty clearly a good deal. When it starts to get closer to the price you would just pay at retail, it is a harder analysis.”

State Consumer Advocate Jeff Ono said that residents looking to lease need to carefully consider how the lease would compare with an electrical bill.

“People should look at the EIA (U.S. Energy Information Administration) and what the Energy Information is saying about future fuel pricing,” Ono said.

Ono said it is a tough decision because it is hard to know what fuel prices will do, especially when committing for such a long lease.

“It is hard enough to predict what is going to happen to fuel prices in this year, let alone five years and 20 years,” Ono said.

HECO customers on Oahu saw a $4 increase on their June bills compared with May, as fuel prices began to climb again. The price of benchmark West Texas Intermediate crude oil has gone from below $30 a barrel in January to about $50 a barrel in June.

Cole said despite having less cash flow, he is happy with the leased system because of the maintenance and predicable bill.

“I knew my cash flow savings would be less because of the cost of fuel going down,” Cole said. “I understood there were risks on the fuel costs and the increase in cash flow. I wanted to do it for environmental reasons and all that, too.”

Cole said the fact that the company monitors the system and fixes problems makes up for the recent lowered cash flow savings.

“I definitely think the benefits outweigh it as far as me putting more money into the system as far as the 20-year term,” Cole said. “The circuit boards went wacky, and they come out and fixed that. It is guaranteed a certain level of production over the course of the year. If it goes below, they cut you a check for the kilowatt-hours it performs below your lease.”

Cole said the leasing option was the best for him because he didn’t have enough cash in hand to pay for the system.

While leasing a solar-energy system from a private company might be an option for residents who cannot afford to buy a solar-energy system, Ono said residents should consider all options before signing a 20-year contract. He pointed out that residents have to pay the full cost of the system if they decide to walk away from the lease. Ono also warned consumers to watch out for contracts that have escalator clauses that increase with inflation.

“Consumers need to be careful about what kind of escalation factor is built into the lease,” Ono said. “How much is it going to increase per year, and compare that against what they might be paying the utility.”

Similar to Cole, Big Island resident Coral Vallente, 44, said she was happy she signed up for a leasing system because she wanted a stable electrical bill.

On average Vallente’s electrical bill was between $180 to $220. After it hit its highest point at $310, Vallente said she decided to look into leasing a solar-energy system.

“That was when I was really researching and picked up the phone and started talking to companies,” Vallente said. “My (Hawaiian Electric Light Co.) bill went all over the place. It really fluctuated a lot. It kind of amazed me because we are pretty consistent as a family in our energy use.”

Vallente signed a contract with ProVision Solar for $125 a month. Vallente said her HELCO bill was $135 at its lowest.

“This I can budget and plan for it every month,” Vallente said.

The average bill in June for a household using 500 kWh on the Big Island is $146.74.

“It has made it harder to sell, though. When prices are low, that’s hard,” Kim Keahiolalo, sales and marketing manager at ProVision, said. “The savings are smaller but savings are savings. I have customers who are signing up for leases that are going to save $15 a month, but for them that is great.”