Are you considering going solar but not sure about the best way to finance it? You’ve landed on the right page! Today, we’re diving deep into the world of solar leasing—its pros, its cons, and everything in between.

What is Solar Leasing?

Solar leasing is a financial arrangement where you lease solar panels from a solar provider. You get all the benefits of having a solar-powered home without the upfront costs. Sounds tempting, right? But hold your horses; there’s more to it!

Pros of solar leasing:

• No Upfront Cost: One of the most significant barriers to solar adoption is the initial investment required to purchase and install a solar system. Solar leasing eliminates this barrier, allowing homeowners to have solar panels installed on their property without any initial outlay. Instead, they pay a monthly lease fee.
• Maintenance-Free: When you lease a solar system, the leasing company typically takes on the responsibility of maintenance, repairs, and monitoring. This means you don’t have to worry about any unexpected costs or the hassle of maintaining the system yourself. It’s a hands-off approach to solar energy.
• Lower Electricity Bills: Even though you’re paying a monthly lease fee, the reduction in your electricity bill can be significant. Depending on the size of your solar system and your energy consumption, you might produce enough solar energy to offset most (if not all) of your electricity costs.
• Immediate Savings: From the moment your solar panels are operational, you start saving on your monthly electricity bills. Over time, these savings can add up, especially if electricity prices rise.
• Flexible Options: Many solar leasing companies offer various plans and terms, allowing you to choose one that fits your budget and needs. Some even provide options to purchase the system later.

• Hassle-Free Installation: The leasing company usually handles everything from the assessment of your property’s solar potential to the installation of the panels. This means a streamlined process for the homeowner.
• Upgrade Opportunities: Technology evolves, and solar panels are no exception. Some leasing agreements may allow you to upgrade to more efficient panels during the term of your lease.

Cons of solar leasing:

• No Ownership: One of the primary drawbacks of solar leasing is that you don’t own the solar panels. This means you’re essentially renting the system and won’t benefit from the increased property value that comes with owning a solar installation.
• Long-Term Commitment: Solar leases often come with long-term contracts, typically ranging from 15 to 20 years. This can be a significant commitment, especially if you’re unsure about your long-term living situation.
• Limited Savings: While you will save on your electricity bills, the savings might not be as substantial as if you owned the system outright. This is because you’ll be paying a monthly lease fee, which can offset some of the savings from your reduced electricity bills.
• Missed Incentives: Owning a solar system often qualifies homeowners for various federal, state, or local tax credits, rebates, and incentives. With leasing, these financial benefits typically go to the leasing company since they own the system.
• Potential Transfer Issues: If you decide to sell your home before the lease term ends, transferring the solar lease to the new homeowner can be challenging. Some buyers might be hesitant to take over a lease, potentially complicating the sale process.
• Locked-In Rates: Some solar leases come with an annual rate escalator, meaning the monthly lease payment can increase over time. This could reduce the long-term savings compared to fixed-rate solar loans or purchasing the system outright.
• End of Lease Terms: At the end of the lease, you might have to decide whether to renew the lease, buy the system, or have it removed. If you choose removal, it could come with additional costs.
• Potential for Liens: In some cases, the solar leasing company might place a lien on the property to secure their interest in the leased equipment. This can complicate matters if you’re trying to refinance or sell your home.
• Dependence on the Leasing Company: If the leasing company goes out of business or faces other challenges, it could impact the maintenance and service of your solar system.

Conclusion:

Solar leasing is a viable option for homeowners who want to go solar without making a large upfront investment. However, it’s important to weigh the pros and cons carefully before making a decision.

If you’re considering solar leasing, be sure to get quotes from top three companies and compare the terms of each contract.