By Sarah Lozanova, Solar Communications Professional
Solar leases were first pioneered in 2007 and quickly gained popularity in the solar energy industry. One of the biggest hurdles for residential renewable energy systems is the upfront investment, an issue that solar leases help solve.
However, leasing a solar system isn’t always the best option for all homeowners, especially if they have the cash to buy the system, they qualify for a solar loan, or they can take advantage of the federal solar tax credit.
What Does It Mean To Lease Solar Panels?
Solar leases allow homeowners to rent their solar equipment instead of buying it. The solar electricity produced by the solar panels supplies power to the house, and the homeowner makes a monthly lease payment for the solar panels. Even though the solar panels are installed on the property, the homeowner doesn’t own them.
Benefits Of Leasing Solar Panels
There are some financial benefits of leasing solar panels, which have made them a popular option for certain homeowners.
Startup Costs Are Lower On Leases
Often, homeowners can get a solar panel system for $0. Because the high upfront cost of solar panels is a common hurdle that makes solar power unaffordable to many, solar lease agreements bypass this issue.
Moving Or Selling Your Home Won’t Be A Deal Breaker
Although the details vary by the solar provider and the lease agreement, solar leases commonly have clauses for moving. Typically, homeowners can transfer the lease to the new home buyer.
However, there are often credit requirements, and the buyer may need a certain minimum credit score. In some cases, potential buyers might be concerned about assuming the lease and the associated monthly fee. Occasionally, the home seller will need to buy out the solar lease if the new owner is unable or unwilling to take it over; this would mean the interested buyer would own the panels outright after purchasing the property from the seller.
Homeowner Isn’t Responsible For Solar System Repairs
With a solar lease, the leasing company that owns the photovoltaic (PV) system is responsible for repairs and maintenance, not the homeowner. This is generally good news unless the leasing company is very slow to make needed repairs.