How Does A Solar Panel Lease Work

Leasing solar equipment allows you to receive the financial benefits of solar energy without having to buy a home solar system.

How does a solar panel lease work. A solar lease is a financing option for residential solar panels where the homeowner leases panels from a solar company. You pay a fixed monthly payment to a solar installer but you do not own the solar panels. Under solar leasing arrangements a solar financing and installation company agrees to install solar panels on a homeowner s rooftop normally for no money down and to make all the connections necessary to provide electrical power to the property. In return you get all of the solar energy the panels produce which cuts down your electric bill.

The leasing company gets the rebates incentives and federal tax credit for the purchase of solar panels. Buying solar panels requires an investment and more decision making than leasing but over the long term the benefits of owning your system are hard to beat. They can either buy out the remaining lease payments themselves or they can attempt to find a buyer who is willing to take over those solar lease payments. 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. 1 over two to three decades average electric bill savings can amount to thousands of dollars. A solar provider handles the installation and then leases the equipment to you at a fixed monthly amount or sells you the electricity the panels generate at a set price per kilowatt hour. If you sign a solar lease you pay a flat monthly rent to sunrun in exchange for electricity.

Here s where it gets really good. If you sign a ppa you commit to paying a fixed rate per kilowatt hour kwh for the electricity that your solar panels generate. Homeowners with leased solar panels who are trying to sell only have two options. How much money can a solar roof save you in illinois.

Solar lease contracts are usually for 20 to 25 years. Most lease providers provide the option to buy the panels at the end of the lease term at a discounted price. Solar leasing is a lot like a lease on a car. Some companies also offer power purchase agreements or ppas.

If you lease instead of buy you are adding layers of expense and giving away the federal tax credit state incentives and utility company rebates that you might otherwise benefit from. Leasing solar panels works similarly to leasing a car. In fact selling a house with leased solar panels may drive down the sales price. Essentially the solar leasing company is selling you power at a reduced rate generated from the newly installed solar panels.