Before entering a solar lease, it's good to get all the facts behind a solar lease. Having all the information will help you determine if a lease is the best solar financing option for you.
The appeal of entering a solar lease often comes from the lower monthly payments. Those who enter a solar lease typically get quoted a smaller monthly payment than their current electricity rates.
While paying less per month is great, solar leases often cost more than other solar panel financing options. Solar leases cost more because that lower payment is over 20 to 25 years, which means you never have a period when you don't have a payment. Both cash and solar loans have a higher solar ROI that provides customers years without electricity bills, making them both more solid financial choices.
Additionally, those who enter into solar lease agreements don't own the solar array. Because the customer doesn't own the array the solar company gets the federal and state incentives instead of the homeowner.
When homeowners enter a solar leasing agreement, they give control to the solar company. While the solar leasing company might have an initial mock-up that looks good, the final product often has higher production than the homeowner needs and solar panels placed in highly viable areas. They do this to produce as much solar as possible on your roof, but the customer doesn't necessarily benefit from this extra production.
When homeowners enter solar leases, they don't own the solar array going on the roof. Because the homeowner isn't the array owner, it doesn't add value to the home. Leased solar also makes selling the house difficult.
Homeowners who need to sell their home before their lease ends have to buy out the lease or find someone willing to pay for the remainder of the lease. Both options aren't ideal.
Most solar leasing companies offer solar service plans. However, solar doesn't require much maintenance. Additionally, solar panel warranties and your homeowners' insurance covers most solar panel damage. So, while solar lease service plans seem like they will save your bacon, most solar installation companies offer the same coverage.
Purchased solar has several benefits over leased solar arrays. These benefits include easier saleability, higher return on investment, more solar incentives, and control over the system aesthetics.
Leased solar arrays can be a good option if you only care about the environment and don't qualify for residential solar. However, if you can get a solar loan or have the cash, and your home is a good fit, it doesn't make financial sense to lease the system.
Don't believe us? Check out our bulleted list that goes over reasons why purchasing solar saves 20 percent more than leasing.
Zero down loan or cash purchase
Only 12 years of fixed payments
Free solar energy for at least 85 percent of your yearly energy needs
At least 25 years of solar energy production — backed by a warranty
A 20-year solar contract that’s hard to transfer to a new owner
Extra panels and placement on your roof that you may not like
Free energy production for the company leasing you the panels
A fixed rate for your energy usage until your contract ends (or is terminated)
Go Solar Group qualifies homeowners for solar and creates a free, no-obligation solar savings assessment in under 15 minutes. To see if you qualify, claim your quote.
If you can afford to pay in cash, this purchasing option will save the most money. These extra savings come from not paying any interest on the price of the solar array. However, homeowners who purchase solar will save a significant amount regardless of whether they pay with cash or through a loan.
Cash purchases have a 5-to-7-year payoff
Go Solar Group offers 10 percent off for anyone who pays cash
A home equity loan can provide a low-interest rate (3-5 percent)
The solar panels are yours to own or sell. You Choose!
It avoids solar PPA problems
Go Solar Group has internal financing as low as 2.99 percent
We've given you the rundown on why leasing solar panels is not something that homeowners should do. If you want to learn more about the many benefits of purchasing solar, take a look at the links below.
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