If the upfront cost of purchasing solar panels is a barrier for you and your family, leasing may be a viable alternative. In this article, we’ll look at how solar leasing works and evaluate its benefits and drawbacks.
What is a solar lease?
A solar lease is an arrangement where a leasing company installs and owns solar panels on your property with low upfront costs or none. Essentially, you enter into a lease agreement, typically lasting 15 to 25 years, to rent the solar energy system. During this period, you pay a fixed monthly lease payment to the leasing company to use the panels.
How does a solar lease work?
When you choose to lease solar panels, the leasing company takes care of all aspects related to the system, including the installation, maintenance, monitoring, and repairs. They assume the responsibility of ensuring the solar panels operate optimally throughout the lease term.
The lease payment you make each month can range on a case-by-case basis. While the exact savings depend on factors such as where you live and how much energy you consume, a solar lease can help substantially reduce immediate costs related to your utility bills.
Some solar lease agreements offer buyout options, allowing you to purchase your panels after a certain period.
What are the pros and cons of a solar lease?
Pros of a Solar Lease
- Lower upfront costs: Leasing solar panels eliminates the need for a significant upfront investment, making them more accessible to homeowners who don’t want to take out a loan.
- Immediate savings: By leasing solar panels, you can start saving on your electricity bills as soon as the installation process is complete.
- Maintenance and repairs: The solar-panel leasing company is responsible for repairing and maintaining your panels.
- Transferable options: Some lease agreements allow you to transfer the lease if you sell your property.
Cons of a Solar Lease
- Long-term commitment: A lease agreement for solar panels typically is 15 to 20 years, which could conflict with your long-term plans for the property.
- Limited savings: Although you will save on your electricity bills, the overall savings from leasing may be lower than owning a solar panel system outright or through a loan. Individuals who lease solar panels are sometimes not eligible for specific tax incentives or rebates that go to the leasing company.
- Lack of ownership benefits: As a lessee, you do not own the solar panels and may be unable to take advantage of some tax credits or net metering programs.
- Potential resale challenges: When selling a property with a leased solar system, some potential buyers may hesitate to assume the lease, which could impact how quickly it sells.
Solar panel leasing allows homeowners and businesses to experience the advantages of solar energy without upfront installation costs. By comprehensively understanding the mechanics of a solar lease and carefully considering its pros and cons, you can make a well-informed decision that aligns with your financial objectives.
Join the Movement
Ready to explore the benefits of leasing solar panels with Solar Optimum? Our experienced team is here to guide you through the process. Contact us to schedule a free consultation and learn how solar leasing can help you save on energy costs and hassle-free maintenance, all without the upfront investment.
