Keynotes To Consider Before Leasing Solar Panels

Homeowners who are planning on going solar may be restricted by the huge upfront investment. Therefore, the solar industry has made it easier to install solar panels with multiple buying options, Leasing Solar Panel is one of them.

If you can not afford a huge cash purchase, you can lease solar panels with zero forehead cost. However, understand that leasing means you do not own the panel and are just renting the solar energy from a solar company.

Therefore, in this article, we will explain every keynote you need before leasing a panel, so that you can make an informed decision.

A Few Guidelines For Leasing Solar Panels

Leasing a solar panel is the same as leasing a car or a house, you can use the energy generated by the panel but you are not the owner of the product.

Moreover, solar energy will decrease your energy cost but you are bound to pay a specific fee to the solar provider as per agreement.

You may have to follow the following guidelines to lease solar energy.

1. The solar provider company will take care of solar installation and maintenance.
2. You must sign an agreement to rent the equipment. The contract is typically of 15 to 25 years which also specifies a monthly fee.
3. You are bound to follow the terms and conditions of the agreement so read them carefully before opting. Some solar companies let the consumer keep the panel at the end of the leasing contract, but with some companies, you must purchase the panel to keep it.
4. As the solar lease provider is responsible for financing and solar costs, you may face a penalty for early termination. However, if you agree to buy the panel before ending the leasing contract, there will not be any penalty.
5. If you are planning on selling or buying a house with a leased solar panel, read the agreement carefully and inquire if the agreement is transferable. Can you buy the equipment? What will be the terms and conditions of removing a leased solar panel if you don’t want to use it?

How Much Leasing Solar Panels Can Cost?

Solar panel leasing does not cost anything at the beginning so one might think it is a great option to switch to green energy which is not always true.

Most solar panel leases are for more than 20 years but you must not think the monthly rate of lease will remain the same throughout the years. A typical agreement consists of a 3.9% increase in payment per year for 15 years.

With time, the leasing money exceeds the electricity bills that you would pay without a solar panel. Besides, If your local electricity rate decreases even slightly, you will end up paying more than your grid energy bill.

Lastly, you will miss all the incentives such as federal tax credits that you get while purchasing the solar panel. Therefore, leasing solar panels might not always be a good return on investment option in the long run.

Terms For Early Termination of Solar Leases

In case you are not satisfied with the solar panels or planning on moving, your solar lease can hold because waking away after leasing a panel can end up in legal action.

Also, solar leases are very long-term commitments so the provider will never allow you to terminate the contract with a small fee. Instead, solar contractors may be given one of the following three options for an early termination.

• Buy-Out the Panels: Most companies go with this option. They allow you to buy out the leased solar panel if you want an early termination. In this case, the amount you have to pay will be the market value of the system. This option can be very costly as you can end up paying more than $20000.

• Transferring the panels: Some solar companies are generous enough to transfer your panels from your old home to a new one if you are moving to the same local area. You can ask about who will cover the cost of the whole process from the provider.

• Transferring the lease: In case you are moving but do not want the panel, you can transfer the lease to the buyers of your house. The new buyers must agree to continue the lease or purchase the panel outright.

Leasing can be a tricky game when you plan to move, therefore, if you have even the slightest plan of moving out, do not lease the panel or read the terms and conditions carefully if you still want to go for it.

Leasing Vs. Buying Solar: What’s The Difference

You can both Lease or buy solar depending on the money you have to spend. The major difference between buying and leasing solar is having enough funds because purchase costs around $15000 to $20000.

So if you can pull this money, you are a good candidate for purchase otherwise leasing is the most appropriate for you. From a return on investment point of view, solar buyers are at more advantage because they get around $30 tax credit incentives and they can even sell the excess electricity back to the grid to earn bill credit.

On the other hand, if you lease a panel, you still save money on bills but if your monthly lease is more than the cost of electricity in your region, you are at a loss.

However, for people who do not qualify for tax credit incentives and the electricity cost in their region is high, leasing is very suitable.

Lastly, here is a third option that can be considered for going green, which is a solar loan. If you have a few thousand dollars for a down payment go with this option. You can also be eligible for federal tax credit in this scenario.

Pros and Cons Of Leasing Solar Panels

Anything you purchase or any investment you make has its benefits and drawbacks. So, it is very important to explore and compare available options. The same goes with leasing solar panels.

Pros of Leasing Solar Panels

• Leasing a solar panel does not cost you anything forehead. There is no burden of making heavy investments and you can enter the sustainable energy trend with a low entry barrier.

• Repairs and maintenance of the panel can cost additional money, but if you lease panels, the provider will be responsible for all repairs throughout the agreement.

• Leasing also reduces your electricity bill, which is a huge boost for people who are tired of paying huge monthly payments.

• A power production guarantee is another pro of leased solar panels. If the panels do not generate enough energy as predicted by the provider, the monthly bill will be reduced.

• As you are not in any solar debt to the company there is no payback period. You can enjoy green energy and make saving if the monthly cost is less.

Cons of Leasing Solar Panels

• One of the cons of leased solar panels is, they do not give you a long-term money saving.

• You do not own the equipment so there is no return on investment with leased solar panels and the company takes all the rebates and tax incentives.

• There is an escalator clause in solar leasing agreements, which means that the monthly cost will increase over time so you end up paying more.

• Another downside of leasing solar panels is you can not control the final look of your roof. The companies do not consider the number of panels and final appeal because they want a maximum investment in your property.

• Monthly payments can be hectic from time to time because the financial downfalls are not predictable, therefore a 20 or more years long agreement can turn into an economic burden.

Top Solar Leasing Companies in Town

Solar leasing can be a great option for you if you choose the right company because they make sure you get the best solar experience with the lowest possible money. So we have a Top pick for you. You can start your solar journey with any of the following reliable and renowned companies.

1. Sunrun: Best for leasing solar because you can choose monthly or prepaid 25-year lease with low cost. Maintenance is free for both options.
2. SunPower: The most experienced solar company in the US to lease, sell, and loan solar. You can buy the panel at the end of the contract get it removed at no additional cost, or extend the lease contract.
3. Solar Energy World: Best for long-term warranty coverage and boasts 20% to 30% lower lease payments than monthly bills.
4. Palmetto Solar: Great protection plans and offers a flat monthly rate. They also cover maintenance plans and an active solar lease can be transferred to the new owners if you sell your home.
5. Momentum Solar: The Company offers a 95% Performance Protection Plan and if your plan is not up to the mark they will compensate you for the difference in performance.

Final Analysis

We are sure that after reading this article, you will be very sure about the process of leasing solar panels and the advantages that come with it.

You can choose any of the above-mentioned companies for a solar lease.

Make sure to read all terms and conditions and buy the options that are the most suitable for you in the long run.

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