Solar Leases
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Solar Leases – How Do They Work?
Solar leasing is 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.
As with a power purchase agreement, most lease providers offer the option to buy the panels at the end of the lease term at a discounted price.
Is a Solar Lease Right for Me?
Along with solar loans, solar leases are among the most popular financial options to go solar. Who should consider a solar lease? 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 parts of their system.
Read about – Is it Better to Lease or Buy Solar Panels?
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Panels are leased
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You receive the energy they produce
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Electricity price is guaranteed
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.
Where Can You Get a Solar Lease?
Solar leases are offered by a number of different providers and installers working with different solar project financing companies. Solar leases are available from far fewer companies than solar loans, but they are still quite common. Many large 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 within your area and if leases are indeed offered in your area.
Read about – How Can You Get Out of a Solar Lease Contract?
Ready to See How Much You Can Save with Solar?
Interested in getting exact prices for the cost solar for your home? Get competitive solar quotes from qualified, trusted installers in your area. To see an estimate for how much you could expect to save and how much a solar system would cost, try our solar calculator.
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