Leasing solar panels are more economical for homeowners interested in switching to renewable energy. With a lease agreement, the finance and solar installation company agree to install the solar panels on the homeowner’s roof, usually without a down payment, and make all the connections needed to provide electricity to the home. In return, the homeowner agrees to pay a fee to use all the electricity generated by the panels for 15 to 25 years.
Once this lease is completed, the agreement terminates, and the homeowner has no further financial obligations. Depending on the rental agreement, fees can be paid monthly, annually, or all at once. Monthly payments are the most common option that recreates the relationship between utility companies and consumers.
Leasing Solar Panels Pros and Cons
If you are interested in solar energy, then you are not alone. The number of solar panel users in the United States increases every year. Diesel rental is in high demand, and there are several reasons why solar system is becoming so popular:
Pros
Fast and Easy Way to Solar Energy Market
Buying solar panels can be a complicated and drawn-out affair. Product options should be compared and analyzed. Some companies should be contacted after decisions regarding financing have been made, and permits have been obtained. But solar rental can simplify the process. After the lease agreement is agreed upon, the installation can begin immediately.
Removing Advance Fee
When the cost of solar energy has dropped, then if you buy PV panels, you still have to get the money from somewhere. However, a diesel rental agreement or PPA agreement does not require an initial investment—free equipment and installation. You only need to pay a monthly fee.
No Need for Repair or Maintenance
If your photovoltaic panels have defects, operate with low efficiency, need cleaning, are damaged by a storm, are shaken during an earthquake, or need a new, expensive inverter, you don’t have to worry about any of that. The solar leasing company and its contractors must be fully responsible for repairs and maintenance.
Can Purchase Solar Energy System at the end of Lease Period
You will always have the option to purchase your solar panels after your solar lease is up at fair market value adjusted for age and current productivity level. Then, if you want to remove it from your home, the solar rental company will arrange it at no charge.
Network Tied Solar Panels
Solar energy can sometimes be intermittent, depending on weather conditions, and that can cause supply problems. However, the rented solar panels will be tied to the grid, which means you can still receive electricity from the utility company.
Can Transfer Rent
If you sell your home, you can transfer your rent to the buyer. The terms under which you can do this will be spelled out in your lease. To qualify for a transfer, the buyer needs to have a good score and have either paid for the house in cash or agreed to pay an additional fee to the leasing company. But as long as you follow the standards set by the leasing company, you should do well assuming the buyer wants the solar panels.
How does Leasing Solar Panels Work
| No | How Solar Lease Works | Description |
| 1 | Developer | Owns the solar system
Responsible for maintenance Gets rebates & benefit |
| 2 | Homeowner | Solar system is installed on their roof
Don’t own the system Uses the electricity the solar system produces |
| 3 | Grid | Provides electricity when solar panel production is low
Offers net metering benefit to homeowner |
Cons
Companies Can Claim Tax Credits, Discounts and SREC
If you buy solar panels in 2018 or 2019, you can reduce 30% of your bill. You’ll also likely be eligible for tax credits and benefits called Solar Renewable Energy Certificates (SRECs) that you can sell to utility companies for a profit. This financial allowance will cut your solar energy costs substantially. But if you rent solar panels, all these benefits will belong to the leasing company.
No Net Meter Credit on Bill
When you install a grid-tied solar energy system, you can sell the excess power generated by your panels back to the utility company for credit that will appear on future utility bills. It will come in handy on cloudy days or cold days when your solar panels don’t produce enough energy, and you need to buy electricity from the grid.
The practice of selling solar power to utility companies is called net metering. You can only participate if you have solar panels. If you rent, your leasing company will get benefits.
There is no guarantee that utility companies will increase electricity prices
Over time, trends change. There is no guarantee that utility companies will continue to increase electricity prices as much as expected. Over time, trends change, and there is no guarantee that utility companies will continue to increase prices by an average of 4-5% annually. Utility-scale renewable energy projects can reduce energy production costs as solar and wind technologies improve. If that happens, then you will get expensive diesel rental fees.
FAQ
What is a solar lease?
A solar lease is a long-term (usually 20-year) contract that allows a utility company to install a solar power system on your roof without you purchasing the system. You pay monthly installments and annual price surges in exchange for the energy produced by these panels.
Is a solar lease worth it?
A solar lease may be worth it for people who do not wish to take up the hassle of maintaining solar panels or who tend to move every five to 10 years. Solar leasing may also sound beneficial to customers who cannot pay a huge amount upfront.[/vc_column_text][/vc_column][/vc_row]