Solar Lease | Leases for Solar Panels
A solar lease is much like a car lease. Someone else owns the equipment, and you pay a monthly fee. A solar lease differs from a solar power purchase agreement in that you are paying for the equipment not just paying for the energy that the equipment produces. Also, a residential solar PPA will often have a fixed monthly cost for the life of the agreement while the lease will usually increase over time (although at a set amount, and probably less than electricity costs will.) However, all in all, they are very similar.
Again, a solar lease is very compelling because it’s easy to evaluate. If your monthly lease costs are cheaper than your savings on electricity costs, it’s a no-brainer.
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. Instead of making a large investment in solar panels, you can get started without any down payment (you also have the option to pay up-front if you want). It’s a compelling option because it’s easy to evaluate. If your monthly lease costs are cheaper than your savings on electricity costs, it’s a no-brainer. You’ll be able to start saving money from the first day your solar panels are installed.
How is a solar lease different from a solar power purchase agreement?
A solar lease differs from a solar power purchase agreement in that you are paying for the equipment, not just paying for the energy that the equipment produces. Also, a residential solar PPA will often have a fixed monthly cost for the life of the agreement while the lease will usually increase over time (although at a set amount, and probably less than electricity costs will; historically, utility rates have increased over 5% each year.) However, all in all, they are very similar.
Who handles repairs?
Since solar panels have very few moving parts and are designed to last for 30 years or longer, they don’t often need maintenance. If something does come up, the company leasing you the solar panels will take care of it. They’ll also guarantee that your solar panels will perform at a certain level, based on the climate you live in. It’s unlikely that your solar panels would underperform, but if they do, the leasing company will make any necessary replacements or pay you the difference.
What happens at the end of the lease?
When your lease is over (they typically last about 15 years), you’ll have the option to upgrade to new technology if you’d like. You can also extend your lease, or ask your leasing company to remove the system. If you move before your lease is over, the lease will transfer to the new owners– a nice feature, since solar power increases the value of your home.
How can I get a solar lease?
Solar leases aren’t available everywhere. SolarCity, the first company to offer leasing, operates in California, Oregon, and Arizona. Another option is SunRun, which offers solar leases to homeowners in Arizona, Colorado, and Los Angeles. Minnesota residents can use FreEner-g and those in Connecticut can use the Connecticut Solar Lease. Because these options are currently only available to the customers of those companies, One Block Off the Grid isn’t yet offering solar leases as an option. As soon as they’re available for third parties, we’ll provide leases as a choice for our members.
When does it make more sense to own your own solar panels?
If you plan to stay in your home long-term and can afford the up-front cost of solar panels, it makes more financial sense to buy them yourself. You’ll be able to claim the rebates and other government financial incentives that a solar leasing company would otherwise take. Once your system is paid off, you’ll be getting free power. You’ll also be able to sell renewable energy credits. With a lease, you’d keep making payments for years, but still wouldn’t own the system at the end of that time. You’ll be locked into a contract. If you sell your house and for some reason the new owner doesn’t want the lease, you’ll have to pay a penalty to get out of the contract.
