Saturday, June 15, 2024

Can You Lease Solar Panels

Most Lease Agreements Have Restrictions

Should You Lease Solar Panels?

It is common for leases to restrict certain activities or developments the property owner might want to carry out. For example, lessees may not be allowed to replace the roof or build any structure on the property that might cast shadows on the system.

Also, the leasing company will need access to your roof to be able to maintain the solar panels for the duration of the lease. This may not always be convenient for you, the homeowner.

According to Choose Energy, another factor is that leasing companies tend to design solar systems to fit their specifications rather than being guided by the number of panels homeowners want or where they want them to be placed.

When you buy the system outright, you have considerably more freedom determining the size of the system and how it is installed.

Other Options To Acquire Solar Power

A solar lease might sound like a good deal but it isnt by far the only setup to access savings from renewable energy. Lets look at other options at your disposal:

Solar loan – With falling costs to install solar and moderate interest rates, homeowners can easily take out a small loan to pay for the installation. Solar loans allow you to buy solar without needing tens of thousands of dollars upfront. Instead, you make small payments and once your loan is paid off, the panels are completely yours.

Solar energy plans – If you live in a deregulated U.S. state, you might shop around for electricity plans offered in your zip code by competitive providers. They often sell affordable, 100% solar-powered plans to reap the benefits of green energy.

Cash purchase – Buying panels for cash has the highest return on investment but it’s the most financially demanding option. Not many homeowners will have the resources to do this, but we include this option for completeness.

Solar Panels Purchase: Cash Or Loan

When it comes to owning your own system and having full control, as we have already mentioned, your options are either to buy outright or to take out a solar loan. If you have a good credit score rating, loans provide another great option for owning solar that takes away some of the financial burden of paying for the system in the form of set monthly instalments and a low down payment.

The main negative when we are comparing the two is that due to the interest required with pretty much any loan type including solar loans, you are going to be paying more overall for the cost of your system compared to purchasing it with cash. Another negative aspect is that if you fail to meet your payment terms over the course of your loan agreement, this could lead to your system being repossessed and the outstanding amount on your solar loan still being due until paid in full.

Even though the system is entirely in your name and you can essentially do with it as you wish when you have entered into a loan agreement, the system is never truly yours until the final payment has been made on your loan. Where possible, paying cash for your system and taking immediate ownership is the best option for those who want to go solar and will always yield the best price when compared to paying over time and the interest rates that come with this.

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The Impact Of Leasing Or Buying Solar When Selling Your Home

In addition to the flat-out benefits that buying has over leasing, there is one condition that homeowners often overlook: the impact that leasing or owning solar panels has on selling their home. Even if you arent remotely interested in selling your home anytime soon, it still is a consideration to make for ten or even twenty years down the road. Contrary to popular belief, there is a difference in the obstacles youll face depending on whether you lease or own and as you could have probably guessed owning is far better.

One piece of advice you may hear is that solar panels will make your home more appealing on the market. This is actually quite true if you own your solar panels. According to the U.S. Department of Energys Office of Energy Efficiency & Renewable Energy, a house with owned solar panels will sell twice as fast as a house without solar panels.

That being said it actually gets harder to find potential buyers if you are leasing your solar panels. The new buyers credit must qualify to take over the lease of the panels and will be required to take on any future payments that still need to be made. On top of the new mortgage for the house, moving costs and other renovations homebuyers are not usually thrilled about taking on another monthly expense, therefore this quality often makes a house harder to sell.

Which Payment Option Is Best

Should I Buy or Lease Solar Panels?

There are a few ways to look at the payment options available for buying or leasing solar panels. In considering these options, the biggest factor may be how long you plan to stay in the home and what money you have available to invest in the solar panels.

If you have available funds, then buying solar panels is ultimately the savvier financial decision. Thats because, although solar panels cost an average of $18,000 to install, the average amount of time it takes to get a full return on the investment due to energy savings is between seven and 10 years. You can also benefit from federal tax credits and reimbursements when you own the system

On the other hand, you may be able to begin leasing solar panels for little to no money down. Although you dont qualify for tax credits or reimbursements, this is an attractive way to quickly start saving money on utility bills and help the environmenteven if you arent able to independently invest in the solar panels.

On average, solar loans last about 20 years, although some are available for short periods of time. Considering the average payback period for people who own solar panels is seven to 10 years, owning is ultimately the better way to save money.

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Buy Out Your Solar Lease To Add Value To Your Home

Some solar lease contracts include an early buy-out option, allowing you to buy-out the remainder of the lease and own the solar panels outright. When you own the solar panels, you remove the solar lease from the home sale equation and boost your homes market value.

To decide if buying-out the panels is a practical option for you, compare the purchase offer to the estimated value owned solar panels add to homes in your market. For instance, if the buy-out offer is $6,000 and the solar panels are likely to add $8,000 to your listing price, it might be worth purchasing the panels for a more straightforward selling process.

Consult your real estate agent to assess how much value owned panels would add to your home to help you make the decision.


  • Selling and negotiation is straightforward without the complication of an attached solar lease
  • Potentially sell your home for more with owned solar panels, using the extra profit to cover your buy-out costs
  • Widen the scope of qualified buyers buyers can apply for any mortgage with a broader range of lenders without the complications of qualifying for a solar lease
  • No extra paperwork for transferring a solar lease
  • Reduced time to close home sale


A Solar Lease Is Just One More Financial Tool That Is Complex Enough That You Cant Quite See What The Real Cost Of It Is

A lease contract is not easily transferable if you decide to sell the house. According to one large solar leasing company: If you sell your home before the end of the lease, you can transfer the lease to the new owners if they qualify with excellent credit, or you can prepay the lease and add it to your home asking price.Qualifying means a 700 or higher FICO score.

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Outline Your Personal Solar Goals

If you are determining whether to lease or buy solar panels, first you need to outline sometimes your goals. Your personal solar goals will largely influence the ownership option that is most efficient for you. If you want to maximize the financial benefits of solar panels, you should purchase your system outright with cash. However, if your goals are more focused on sustainability, a solar lease maybe an excellent option to consider. with the solar lease, you can primarily focus on generating sustainable electricity from renewable resources, rather than financial concerns.

What Have I Signed Up To With Free Solar Panels

Should You Buy or Lease Your Solar Panel System?

If you’ve rented your roof out, you ought to be fully aware of what you’re involved with: you have entered into a lease contract with the company, and rented out your roof to someone else for 20-25 years.

We analysed a contract from one rent-a-roof company, and found issues with liabilities and provisions that were very much in favour of the company.

  • The contract we saw stipulated that the householder would have to get consent during the term of the lease if they wanted to sell their house, or make any alterations or additions to the building near the solar PV system. This clause would apply to a loft conversion.
  • If the panels needed to be removed for a period of time to do maintenance work on the roof, for example the householder would have to compensate the company for the missed FIT payments.

The lease stays with the property. So if you have free solar panels installed and want to sell your home within the 20-25-year lease period, you’ll have to find a buyer who is happy to take on the lease for the remainder of the contract.

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Site Upgrades May Be Needed

Sometimes third-party developers require property owners to do upgrades to ensure that their solar PV system maintains its efficiency. If trees grow and shade the panels on the roof, they might insist that they are trimmed or even removed.

Their motivation would usually be to ensure maximum energy is produced so that they can earn more SERCs. But its going to cost you money, and you will have to comply when they make the demands.While upgrades may well be beneficial for the property, they may not be quite what you were planning or what you would otherwise prioritize.

Where Can I Find A Provider

If you decided that a solar lease is a way to go, you should look for reliable leasing companies.

You can fill in an online form on their website and get an estimate and a breakdown of your solar financing options. Before you do, you should also contact your local utility company to find out if you are allowed to lease solar panels with your current plan.

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Where Is The Best Place For Buying Solar Panels

The truth is that there is not one singular best place for buying solar panels because every provider offers different packages and solutions. Before you consider buying, if you have an intermediate level of DIY knowledge and ability, then you should definitely consider making your own panels instead. This makes owning a solar system virtually free in comparison to the prices that you will pay to established solar companies, and it is absolutely the best way to own solar.

If you are interested in seeing whether this is viable, check out websites like Backyard Revolution that offer comprehensive step-by-step guides on how to build and install your own solar panel system. If you would still rather pay for someone else to install your solar system and provide all of the components however, then companies like SunPower, Seraphim, Tesla, and Solaria are all very highly regarded.

With companies like Tesla too, just remember that while the prices might be slightly elevated compared to some other companies, the quality of the components and service offered can mean that the additional expense is more than worth it. If you have the money to buy outright, always try to buy the best quality system you can afford from the best supplier you can afford.

Is A Solar Lease Worth It

Solar Panels: Buy or Lease?

The short answer is that it depends on your energy needs, financial restrictions, and savings goals. If you are able to spend more and buy a solar system upfront, you will have greater savings over time and avoid the drawbacks of a solar lease.

However, if a solar lease is the only option for your household, it is a less expensive way to use solar energy. Just be sure to carefully read the lease agreement, consider the terms and conditions, and thoroughly research the solar leasing company before signing a contract.

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Highlight The Specifics Of Your Property

In comparing the advantages and drawbacks of buying or leasing solar panels, you need to highlight the specifics of your property. Certain properties are more well-equipped for rooftop solar systems. Certain areas of the country receive more frequent sunlight, whereas others commonly experience rain. Simultaneously, you need to consider how long you plan on staying in your current residence. Many homeowners with plans of moving soon often choose solar leases due to their limited commitment. However, remember that solar leases are commonly structured in five to ten year agreements which could potentially complicate your moving plans. On the other hand, purchasing your system with cash can help you significantly increase your property value. Since modern homeowners are willing to pay a premium for solar-enabled properties, you can potentially sell your home faster and for a higher price.

What Is A Solar Lease

Leasing solar panels works kind of like leasing a car. You pay a fixed monthly payment to a solar installer, but you do not own the solar panels. In return, you get all of the solar energy the panels produce, which cuts down your electric bill.

Essentially, you are swapping the electric bill from your utility company for a cheaper bill from a solar leasing company.

Typically, a solar installer will work with a separate leasing company to offer a solar lease. The installer is responsible for designing, installing, and maintaining the solar panels.

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Do Leased Solar Panels Increase Home Value

Though it might seem to many like equipping their homes with solar panels could be a great idea that will massively increase their value, the truth is often the complete opposite.

Consider the following important factors.

  • It is very rare that having solar panels on your roof will increase your property value.
  • The only viable way to improve your homes value with solar technology is to own your panels, but even then, you are more likely to break even and simply get what the house is worth and not a cent more.
  • Any solar leases aside, panels can actually decrease the value of your home even when you own them. The problem with leasing is that you cannot remove the panels prior to sale unless you have plenty of spare cash.

As you can see, even if you buy a solar panel system outright, this can still reduce the value of your home. Solar panel systems just are not to the liking of everybody. The one positive aspect that almost everybody can agree on is that solar panels do not emit any harmful emissions into the ozone layer. However, there are many people out there who do not value this mitigated environmental impact as much as they do a homes appearance.

Unfortunately, your options are not quite that simple when you are engaged in a solar lease. This is because the panels do not belong to you.

Consider the following information.

Is It Better To Buy Or Lease Solar Panels Who Owns The Panels

Should You Lease or Own a Solar Panel System?

You already know that if you purchase a solar panel system outright, then the solar panels that form the backbone of said system are unquestionably yours. It is the same in the long run at least when you take out a solar loan. Even though you might not be the immediate owner of the panels and overriding system, eventually, once your last payment is made, the entire solar panel system that is currently nestling comfortably on the roof of your house is going to be yours.

But what about when you take out a solar lease? When you are pumping all of your hard-earned money into the pockets of a solar company every month, especially when you are paying more over time due to an escalation clause, will you one day have something to show for it?

Unfortunately, you will not. One of the most negative aspects of solar leasing is the fact that when you finally get to the end of your 25-year lease term, the owners of the panels will simply come to your home and take your panels away. They can do this because they are the true owners of the panels.

As sad as that may seem, for all of the time that you have spent pumping money into the solar panel system that has sustained your home over the years, you are not actually going to have anything to show for it at the end of the lengthy 2025-year term. Sure, you might never have been able to access solar power without a lease, but this begs the question of questions. Why did you want to do it in the first place?

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