Wednesday, May 22, 2024

How Does Solar City Lease Work

Solarcity Drags Its Feet On Installations

What Is Solar Lease & How Does Solar Leasing Work by SolarCity

Does it always? Probably not. But Pick My Solar’s review revealed that, while most solar companies in California completed their customers’ installations within two to four months after signing, SolarCity took embarrassingly longer to turn things on:

“SolarCity is an outlier here, known to take six months or more to install a system due to backlog and inefficiencies. The MyPower contract confirms this exasperated timeline, stating that the installation will be done within 12 months!”

Of course, to give them the benefit of the doubt, this problem might be unique to SolarCity’s California operations. But when customers decide they want to invest in solar power, they probably aren’t expecting to wait a half-year to make that decision a reality.

Why Loans Make More Sense Than Leases Or Ppas

Leasing solar panels for your home is not a good idea from a financial perspective. We simply do not recommend it. In most cases, youll save much more money in the long run by exploring other financing options like an FHA Title 1 loan or a traditional loan from your personal bank.

The graph below shows the average return on investment when you buy, finance, or lease your system. The difference between taking out a loan and buying a system with cash is fairly small, with leases and PPA lagging far behind.

Two: City And Utility Company Approval

Your local governance and your local utility company both need to sign off on the design of a solar system before you can tie it into the electrical grid. This ensures that the system meets any local ordinances for system size or placement, and ensures that the electricity company is ready to manage the electricity produced by your system. Almost all solar systems are grid-tied your electricity flows directly to the power grid, and your energy savings is calculated through net metering, which allows your utility to credit you for the power your system produces.

Experienced solar companies are accustomed to working with your city and your utility company, and will design a system that meets the approval standards. The best solar contractors, including SouthWest Sun Solar, will even manage all of the permitting paperwork for your system for you, ensuring that the system is approved for all necessary permits with no additional inconvenience for the homeowner.

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Other Financing Options Can Save You More Than A Solar Ppa Or Solar Lease

While you dont have to pay the upfront costs of a solar panel system with a solar PPA or solar lease, they do come with their downsides.

With both solar leases and solar PPAs, you do not own the solar system on your roof. This means you are not eligible for various solar incentives, most notably the federal tax credit, which reduces the cost of installing solar by 26% until the end of 2022.

After 2022, the credit steps down to 22%, before expiring completely in 2024. Its best to take advantage of the credit now, in order to maximize your savings.

Find out how much a solar system will cost after incentives and local rebates

Solar PPAs and solar leases also dont give you the same long-term savings as other solar financing options do. When you purchase a solar energy system with cash or through a solar loan, the system will eventually be paid off.

After that point, you are generating free electricity for your home without having to make monthly payments. Cash-purchased systems and those financed with solar loans will give you greater long-term savings than systems covered by solar PPAs and solar leases.

Plus, solar leases and PPAs include price escalators, which means the price you pay for the solar system will increase each year. Typically, these escalators are between 3% and 5%.

Who Should Buy A Solar Roof

BPU Community Solar Farm

The initial appeal of the Tesla Solar Roof will target the wealthy, tech-savvy homeowner with a passion for renewable energy. Due to the solar roof cost, the purchaser of a solar roof will have a deep passion for aesthetics.

There is certainly a risk-reward aspect of being one of the first owners of a Tesla Solar Roof. The reward is obviously being able to be one of the first owners of this beautiful technology. The risk is the same. Being the owner of the first version of anything comes with the risk of having to be patient while kinks are worked out.

If you want to be an owner of the Tesla Solar Roof you will need a large amount of expendable cash and an even larger amount of patience as it could take years for the solar roofs to get installed.

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What Is A Solarcity / Tesla Lease

SolarCitys leasing program is actually pretty simple. Instead of paying for the solar setup and installation, SolarCity pays for it. You just pay them a monthly fee over a 20 year lease agreement. They also provide a warranty for the entire system for the 20 years, plus a warranty on your existing roof for 10 years .

This sounds pretty attractive right?

Well, there are some catches. The main one is that the leasing rate increases by 2.9% annually. So over a 20 year lease, that is quite a big increase. We will cover more of the issues with a SolarCity lease after the cost analysis.

Transfer Your Solar Lease To Eliminate Extra Costs When Selling

Transferring your solar lease gets you off the hook for any payments owed in the remaining duration of the lease. The process of transferring the lease is fairly straightforward, but does require a reasonable amount of coordination between all parties involved in the transaction: you, your real estate agent, the solar company, the buyer, the buyers real estate agent, and even the buyers mortgage lender.


  • No upfront cost to buy the panels you can invest saved money in other value-adding improvements to increase your homes marketability like painting and staging
  • No early buy-out fee
  • Complicates the selling process necessitates more discussion between the seller and buyers
  • May turn off buyers uninterested in taking on lease
  • Limits your offer pool to buyers who are able to qualify for the solar lease in addition to a mortgage
  • Extends closing period until the new buyer is approved to take on the solar lease
  • Potential lease transfer fee

Follow these steps to transfer your solar lease to the new buyer:

  • Notify your solar company that you are selling your home. Most companies will connect you with a service transfer specialist who will provide you with information on transferring the lease.
  • When youve found an interested buyer, provide them with a copy of your solar agreement and give them your solar service transfer specialists contact details in case they want to discuss the details of the lease.
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    Questions To Ask When Reviewing A Solarcity Quote

    A preliminary SolarCity quote doesnt contain all of the information that will be included in your final contract. Before you sign on the dotted line, there are a few more questions you should ask your SolarCity energy consultant:

    • Is there a performance guarantee? A performance guarantee ensures that your system will produce a certain amount of electricity so that you get what you pay for. In the unlikely event that your system malfunctions, the performance guarantee is your recourse with the company. Make sure you have one in your contract.
    • Did you make any changes to the design of the system? Your systems design isnt finalized until you receive the final contract from SolarCity. Make sure to confirm that there havent been any significant changes to the physical design and layout of your solar panel system since you reviewed the preliminary design in your original offer. For example, check if any new panels been added, or if their location on your roof has changed.
    • What are the terms of the warranty? The initial offer that you receive will have an overview of terms for warranties and repairs, but you should review the fine print in your final contract to understand what is and is not covered in your warranty.
    • What are my options when the agreement ends? Most homeowners will have the option to either extend their agreement with its existing terms, upgrade to a new system under a new contract, or have SolarCity remove the system at no cost.

    Trust In Our Comprehensive Solar Plans

    What you should know about leasing your land to a solar developer

    Concierge Service

    From drafting your final blueprint to filing paperwork and securing permits, you can count on us to provide the professional support you need.

    All Inclusive Protection

    All inclusive protection gives you the ease of mind and eliminates the need to spend out of pocket.

    System Monitoring

    Enjoy personal system monitoring with Momentum Solars App for your newly installed solar panel system without any hassle or spending out of pocket.

    Read Also: What Are The Government Incentives For Solar

    Peace Of Mind For Years To Come

    Sunruns solar leases and PPAs spare you the high upfront costs of a home solar system. We offer you professional installation, maintenance, monitoring, along with insurance during the length of your contract. And if you sell your home, we guarantee a seamless agreement transfer for the new buyer/owner of the property.

    Installing solar panels on your roof also helps the environment by reducing your carbon footprint.11 The environmental benefits, combined with the financial returns, make solar a smart choice.

    If youre considering a lease or PPA plan to get your new residential solar system, we recommend using Sunruns solar cost app or request your complimentary quote today.

    Pros And Cons Of Leasing Solar Panels


    By leasing solar panels, you replace your monthly utility bill with a monthly equipment lease payment and pay no cash up front. You enjoy low installation and maintenance costs. You may also benefit from solar panels in other utility costs by home heating through solar power, solar pool heating, and even solar hot water heater installation.

    When installing your new solar energy system you may also have the added benefit of deciding what type of solar panels are installed, different style options for mounting new solar panels, and even the solar inverter installed on your home.


    When you lease, you usually dont have an option to eventually buy. Also, by leasing, you forfeit the ability to gain price advantage by selling electricity with solar net metering .

    A word of caution: Before you start searching for a solar installer, make sure leases are available where you live, because they may not be available in less sunny states. We recommend doing some research on your Solar Sun Number Score for your home before leasing.

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    How Does Solar Financing Work

    • Solar Alternatives
    • May 28, 2021

    Solar panels are one of the best investments you can make. The environmental, financial, and community value that solar provides has made it a mainstream residential and business energy source. Given the significant upfront cost necessary to maximize the value of solar panels, many customers opt to pay with a solar loan or lease rather than pay in cash.

    Why Are Solar Leases Scaring Away Potential Home Buyers

    Solar Panel Installation Agreement

    We can credit leases for inciting solars popularity boom over the last 10 years. Unfortunately more often these days, a solar lease is scaring buyers away from purchasing a home with a solar installation. We decided to look into the history of leases and how they work to give buyers the information they need to make an informed choice.

    Leases with their tantalizing $0 down draw offers anyone the chance to go solar. By 2013, the solar lease and its sister the power-purchase agreement , collectively known as third-party ownership, accounted for about 70% of all residential solar installations.

    However, now that leasing business has begun to mature, many homeowners and industry analysts are seeing the downsides of leases. This includes less financial savings when compared to cash purchases as well as issues with the lease contracts themselves .

    In addition, over the last couple of years, home buyers have become wary of homes with solar leases, as reported by Bloomberg, NPR, and the National Association of Realtors. In some instances, unfamiliar with solar and leases, buyers have even walked away from a home because of the solar.

    However, solar leases arent some mysterious black hole no one can understand. All you need to do is a little research and understand grade-school math. Armed with the solar lease contract, a few utility bills, and a calculator, you can figure out if taking over someone elses solar lease is a wise decision.

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    The Checks And Balances Project

    SolarCity indirectly funds a political advocacy group known as the Checks and Balances Project. The project has criticized the elected members of the Arizona Corporation Commission for being too well-connected to utility companies. The Checks and Balances Project has filed several requests for public records from the Arizona Corporation Commission. In July 2016, the Federal Bureau of Investigation interviewed the head of Checks and Balances as part of a larger criminal investigation into the financing of certain Arizona statewide races in 2014.

    What Is The Net Metering Policy For Nv Energy

    In 2017, the Nevada legislature passed legislation that established net metering rates on a tiered system. Under this system, the earlier you apply, the higher the rate you get for the surplus energy your system produces.

    Net metering rates will be stepping down in the following order

    Applicable tier

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    Why Selling A House With Leased Solar Panels Is Difficult

    As we discussed in our last blog post, solar panels can add significant value to your home. But youll only realize that value if you purchase your solar panel system outright. Leasing solar panels can actually be a liability if you try to sell your home.

    If you purchase your solar panel system, you can add anywhere from $15,000 to $23,000 to your homes value. Estimates vary, but experts agree that when you own your solar panel system, you actually increase your homes value.

    Leasing solar panels, on the other hand, may not increase your homes value at all. In fact, selling a house with leased solar panels may drive down the sales price. Homeowners with leased solar panels who are trying to sell only have two options. They can either buy out the remaining lease payments themselves, or they can attempt to find a buyer who is willing to take over those solar lease payments.

    Solar companies who focus on lease options, like Solar City and SunRun, claim that they make it easy to transfer lease payments when selling a house with leased solar panels. But in reality, selling a house with leased solar panels adds an extra layer of complexity. One homeowner with leased solar panels reported that he had to lower the selling price of his homethree times to get buyers interested. Potential buyers were scared of the solar lease, said his real estate agent.

    Watch Out For Deceptive Sales Practices

    SolarCity and Utilities: The Future of the Grid

    The states of New Jersey and New Mexico have sued Vivint Solar, one of the countryâs largest marketers of solar leases and PPAs, of deceptive sales practices.

    In the case of New Jersey, the allegations were serious:

    Specifically, Vivint settled allegations of falsely representing electrical bill savings, obtaining customersâ credit reports without their knowledge or consent, forcing customers to sign deliberately confusing contracts that violated their legal rights as customers and performed shoddy, damaging installations.

    While the New Jersey lawsuit was settled out of court, the state of New Mexico has an ongoing lawsuit that lists 17 different counts against Vivint, accusing them of sales tactics that exaggerate or lie about the products and services they sell, and generally having business practices that constitute fraud and rackeetering.

    You can read the complaint in full if you like, but the most serious allegations include excessively high electricity rates, placing defacto liens on customersâ homes, and not giving customers a paper copy of their contract before pushing them to sign it.

    Vivint Solar isnât the only company accused of poor sales practices. Sunrun has faced lawsuits in the past, and you can also take a look at the Better Business Bureau to find reviews of Sunrun and other big national companies like Momentum Solar.

    Also Check: How Do I Make My Own Solar Panels

    Solar Leases And Ppas Are Financing Methods That Let You Get A Solar System Installed On Your House For No Money Down But Are They A Good Idea

    If youve ever heard of getting free solar panels, thats usually referring to solar leases. With a no-money-down lease, a company installs solar panels on your house. Theres no loan principal to pay off either: you simply get to use the panels for 20 years or more in exchange for a small monthly cost.

    Sound too good to be true? Often it is.

    How Does A Solar Lease Work

    Once the solar energy system is installed, you get to use all of the solar power the panels generate. Instead of using electricity from your utility, your home will power itself using the energy the solar panels produce.

    Because you are using solar energy instead of taking electricity from the grid, your electric bill will be lower. If the solar panels generate enough electricity to cover all of your energy usage through net metering, you could completely eliminate your electric bill .

    But, youll still have to pay your solar lease payment. Usually, the lease payment will be lower than what your utility bill was before installing solar. So, if your electric bill is $150 per month, and your lease payment is $100, youre saving $50 per month with a solar lease.

    Keep in mind though, that the solar system might not always produce enough electricity to cover your whole electric bill. Maybe there werent that many sunny days in a month, or you used way more electricity than usual. In these situations, you could end up needing to take more electricity from the grid to meet your power needs. Then, youll have both an electric bill and a solar lease payment.

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