Solar Lease

Solar Lease – Solar Financing For Residential Solar Panels


What’s a solar lease?

A solar lease is much like a car lease. Someone else owns the equipment, and you pay a monthly fee to lease it.  A solar lease differs from a solar power purchase agreement (PPA) in that you are leasing the equipment, whereas with a PPA, you’re paying for the energy the panels produce. Both leases and PPAs can have either fixed, escalating, or de-escalating monthly payments over the lifetime of the agreement, which can be fifteen years or more.  In a sense, they’re very similar agreements, in that someone else owns and maintains the system. You simply get a much lower monthly electricity bill from a clean, renewable source of energy.

Like a PPA agreement, the advantage of a solar lease is that instead of making a large upfront investment in solar panels, you can get started for little to no money down. Figuring out if a solar lease is worthwhile is easy: if the monthly lease payment is less than what you’re currently paying per month for electricity, leasing probably makes economic sense for you. You’ll be able to start saving money from the first day your panels are installed, for little to no upfront investment.

When does it make more sense to own panels versus leasing them?

If you plan to stay in your home a long time and can afford the up-front cost of solar panels, it may may more financial sense to buy them yourself because the total return on your investment is likely going to be greater. What you give up is the hassle-free aspect of leasing because the leasing company monitors, maintains, insures, and guarantees the production of the system.  Some studies even suggest that owners of monitored and maintained systems may produce more solar energy and therefore realize greater financial benefits.

What happens at the end of the lease?

When your lease is over (leases can vary in terms from 10 to 20 years), you’ll have a few options.  You can renew the lease for a new amount of time, buy out the system at fair market value, or ask your leasing company to remove the system. If you move before your lease is over, you’ll transfer the lease to the new owners–a nice feature because solar power increases the value of your home.

How can I get a leasing quote?

One Block Off the Grid offers several solar leasing and PPA options from top-rated providers. Sign up to get a free estimate as well as access to our knowledgeable solar advisors, who can discuss your various options and answer any questions. Your advisor will also show you exactly how these different options compare to purchasing a system, both in terms of total cost and return on investment.

When getting a quote on a solar lease or a power purchase agreement, what do I need to know?

When you’re gathering quotes on solar leases, be sure to cover the following:

  • What will my monthly payments be?
  • Will those payments go up over time and if so, by how much?
  • What’s the total cost of the lease over its entire lifetime?
  • How does that compare to purchasing the same size system?
  • What’s my short term and long term ROI on the lease/PPA?
  • If I want to buy the solar system at some point, what are my options?
  • If I decide to buy the system at fair market value, how is that value determined?
  • How does this leasing/PPA provider handle the solar rebates and incentives associated with installing the system?