I am looking to get involved in a Solar Business where the business model is that we will charge a rental for the hardware (ie the panels and equipment) and at the end of the period the hardware will belong to the renter (only when fully paid).
The cumulative rental will be higher than the cash purchase price, additionally there will be penalties for late payments.
Is there a problem with Ribis here and if there is what would be the best way in which to avoid it?
Thank you for your question.
The renting of the panels is not problematic, because at the time of the rental it is not a loan rather a rental, and the customer is paying you for the use of your panels. The penalties for the late payments however is problematic unless it is only a one time penalty. What would be best for you would be to make out a heter iska for your company. You can e-mail the Bais Hora’ah L’inyonei Ribbis (in Eretz Yisroel) at [email protected], and they will be in contact with you, and arrange a heter iska for your business in English. Alternatively, you can call the Bais Horaah Linyonei Ribbis in the U.S.A. at 1845-493-8604 and have it arranged.
In the zechus of your being careful regarding the halachos of Ribbis, your business should be zoche, to what it says in the Torah Devarim 23-21 “למען יברכך ד’ אלקיך בכל משלח ידך”ָ
Best wishes and a lot of hatzlocha in your new business.