What About Solar Lease Programs?

At this point in my solar series, the extreme DIYers are likely thinking "wow, I could install a solar system myself".  Others might be thinking that solar is too complicated or too expensive to mess around with, even if someone else installs it.

For that latter group of people, you may want to consider a solar leasing program.  So today, I'm going to make a quick digression from my originally scheduled solar series to talk briefly about leasing options and pros and cons.


For those unable to afford the initial cash outlay of a solar system, or those not wanting to worry about any maintenance or repairs that may arise, innovated lease programs may be a good option.

Here is how solar leases work:

The Promise of Solar Leases - image from www.solarcity.com

1. You pay an upfront fee, usually around $1000; sometimes this fee is waved
2. The leasing company installs a system that they feel provides optimal payback/ROI.
3. The leasing company charges you a flat rate each month.
4. You continue to pay the electric bill, which is now reduced since you have solar.
5. If properly designed, the sum of what you pay the leasing company and what you pay the electric company is less than what you paid previously.  See chart at right.
6. The leasing company takes are of repair or maintenance
7. Lease duration is typically 10 to 15 years.

as mentioned, the lease durations vary, typically 10 to 15 years, meaning you'd have an option to renew it at the end of the term.  The leasing company owns the solar panels, inverters, and other equipment, and is responsible for repair.  They also get all of the tax and utility rebates.

Now, a quick note about that chart above.  There are a lot of assumptions built in.  First, initial monthly savings are typically quite small - maybe only $10 or so for the first few years.  It also assumes a relatively high increase in electricity rates over time, making the deal better as time goes on.

Solar Lease Considerations:

1. If you move, you are still responsible for the lease.  You'd need to transfer the lease to the new owner, and this could scare off some potential buyers.  Hopefully buyers would see it as an asset, but you never know.
2. Long term ROI (return on investment) is less in leasing programs, possibly a lot less.
3. Hassle and initial captial outlay is significantly reduced.
4. Maintenance is not a concern.  The leasing company is responsible for replacing failed inverters, panels, switches, etc.
5. Lease payments are not flat.  In other words, you may start off paying the solar leasing company $100 a month, but those payments will increase a percent or two each year on average.
6. Since you do not own the solar system, it is technically possible that if the leasing company goes bankrupt that the panels could be repossessed.  This is unlikely, but I bring this up so anyone reading this enters the agreement with eyes wide open.

Where To Go Next for Solar Leasing Information

• Check out SolarCity - they are perhaps the largest and most well known solar leasing company, and also will sell you systems outright.
• SunRun offers a leasing program in Massachusetts
• Connecticut also has a solar leasing plan.
• BrightGrid is a new entry to the arena.
• Remember, google is your friend.  There are likely many other companies out there providing this service