Leasing solar panels: Everything you need to know
Solar leasing is a great financial solution for those looking to go green and reduce their electricity bills without the hefty expense of purchasing a solar energy system. Much like with leasing a car, customers pay an affordable monthly fee that allows them to use the power produced by the panels but don’t possess ownership over the panels themselves. It’s an accessible way for everybody to get into renewable energy!
Solar leasing offers some advantages, including decreased upfront costs for customers to install panels and the solar company assuming responsibility for maintenance and potential damage. Unfortunately, you will miss out on incentives such as local or federal tax credits when opting into a solar lease since ownership of the panels is not yours.
When solar systems first hit the market, leasing was essential to offset their hefty price tags. But now that they’ve become more affordable and accessible, there aren’t as many benefits associated with leasing a system.
How does solar panel leasing work?
Solar leasing works by allowing you to pay a monthly fee in exchange for access to the energy generated by the solar panels on your roof. The solar company remains the owner of the system and takes responsibility for any necessary repairs or maintenance, making it an attractive option for customers who don’t want the hassle of dealing with upkeep.
The lease rate is typically lower than the electric company’s charge for power and your energy bills should be significantly reduced. In some cases, if you have a high enough amount of production, it could even result in eliminating your electric bill altogether.
But, you’ll still have to pay your solar lease payment. Usually, the lease payment will be lower than what your utility bill was before installing solar.
Advantages of a solar lease
A solar lease is a great way to leverage the power of the sun without having to pay for the cost of installation. With a solar lease, you are able to rent out your rooftop solar panels from a third-party entity and enjoy the benefits of clean energy without the upfront cost. There are numerous advantages to leasing a solar panel system, such as: cost savings, tax breaks, no maintenance required on your part, and building up equity with monthly payments.
No costs upfront
The main advantage of a solar lease is that it eliminates the high upfront costs associated with buying a system. You don’t have to worry about coming up with a large sum of money in order to get access to the benefits of solar energy.
Another advantage is that you don’t have to take on the responsibility for repair or maintenance of the system. This can be a huge relief for those who don’t have the time, money, or expertise to do it themselves.
Lower energy bills
Last but not least, solar leases provide you with electric bill savings. The lease payments are designed to be less than what your utility bill would be, so you can save money on electricity costs while still enjoying the benefits of clean energy.
Disadvantages of a solar lease
The biggest disadvantage of a solar lease is that you won’t be able to take advantage of the tax credits and other incentives available for those who own their system. You also won’t be able to benefit from SRECs, which can add up over time. Additionally, there are often additional fees associated with leasing, such as a performance fee or an early termination fee. Lastly, solar leases typically have a 20-25 year term, so you will still be paying for the system long after it has paid for itself.