Solar Leases

  • Panels are leased 

  • You receive the energy they produce

  • Electricity price is guaranteed 

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Solar Leases - How Do They Work?

Solar leases are a lot like a lease on a car:

  • You lease the solar panels and receive all the energy they produce, but do not own the panels.
  • You make monthly payments for the panels, and are entitled to all the electricity they produce.
  • Most lease providers provide the option to buy the panels at the end of the lease term at a discounted price.

Solar leases differ from auto leases in three important ways:

  • Unlike a car lease, which doesn’t give you any savings, solar leases allow you to save on your monthly electric bills from day one.
  • The monthly lease amount goes up once per year by something called the solar lease escalator –  which is a percent of the solar lease cost.
  • The lease contracts are usually for 20 years.

With a lease, the contract lays out how much your panels will cost for the duration of the lease, including any escalators.  Many people prefer this versus having to constantly wonder how much the next rate increase will be from your utility, and prefer the convenience of not having to deal with any maintenance or be liable for any work that needs to be done to their solar system.

Is a Solar Lease Right for Me?

Solar leases are one of the most popular ways to go solar, along with solar loans. Who is a solar lease most appropriate for?

  • Homeowners who want to go solar as quickly as possible.
  • Homeowners who don’t want to worry about the possibility of needing to replace an inverter or other part of their system.

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A Solar Lease Example - Potential Solar Lease Savings Over 20 Years

What Are The Advantages of a Solar Lease?

  • Lock in your power prices going forward
  • Solar leases provide significant savings over your utility bill while eliminating pollution
  • Most leases are $0 down
  • Leasing is the simplest “one-stop-shop” solution for homeowners who want to go solar.
  • Leases include a power production guarantee – so if the panels don’t produce a certain amount of power your lease payment goes down.
  • The company maintains the system for the duration of the lease – so if an inverter stops working, the company comes out to fix it.

Since the leasing companies are so large, they are able to take advantage of many special tax benefits that regular homeowners can’t take advantage of, and these companies are then able to offer leases at a discount to residential buyers.

Solar Lease Frequently Asked Questions

What happens if I want to sell my house?

Homes with solar leases are purchased and sold every day. There are two possible scenarios during a home sale. The first, and most common, is that the new homeowner takes over the lease. The second is that you can buy out the cost of the lease in advance and include the cost of the lease in your homes’ purchase price. This option is less common, since it requires you to put up cash for the purchase. Both methods work very well during the process of selling a home with a solar lease.

How is care and maintenance of the system handled during the duration of a lease?

There is nothing required from the homeowner during the duration of a lease – the solar leasing company handles any equipment issues that arise.

What is a solar lease escalator?

An escalator is a very important part of the lease – this is the percent that the lease increases per year, to cover inflation and the costs of installation and maintenance for the lease. Lease escalators are typically 2.5-6% annually, depending on provider, homeowner credit score, panels used, anticipated energy provided, and a number of other factors.

What is the difference between a solar lease and a solar PPA?

A common point of confusion among homeowners investigating their solar options. Solar leases are a lease on the solar panels themselves, while the power that comes off of them is yours. A solar PPA (power purchase agreement) is an agreement to purchase solar power from the panels that a company installs on the home. The difference is not usually important to most homeowners, but it is the difference between paying to use equipment (so leasing the panels and using the electricity that comes from them) versus paying for what the equipment produces (the electricity from solar energy generated by the panels).  Both utilize escalators to account for inflation and the costs of running the providers company.

Where Can You Get a Solar Lease?

Solar leases are provided by a number of different providers and installers working with different financing companies. While solar leases are provided by far fewer companies than solar loans, they are still quite common, and many of the larger leasing companies also offer leases while working with smaller installers.

All of our providers offer the full spectrum of solar finance products, from loans to leases, PPAs and cash purchases. However, solar leases, unlike solar loans and cash purchases, are not available in all areas due to state and local regulations. By entering your zip code in the submission box on the top of the page we can show you which pre-screened lease providers we work with in your area, and if leases are indeed offered in your area.

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