What Is Solar Leasing and Is It Right for Your Home?
Solar panels look tempting when you see neighbors cutting their electric bills, but the price tag can make you pause. A solar lease offers another path. Instead of paying for the whole system up front, you pay a set monthly fee to use panels owned and maintained by someone else. At Solar Liberty in Los Angeles, CA, we walk you through how solar leasing works, where it shines, where it falls short, and how to decide if it fits the way you use energy and money at home.
How Solar Leasing Works
With a solar lease, a solar company designs and installs a system on your roof, but you do not buy the equipment. You sign a contract that gives you the right to use the system for a set number of years, often around fifteen to twenty. In return, you pay a fixed monthly amount that changes little from one season to the next, even though your electric use might shift. Many leases come with little or no upfront cost for installation, which lets you start with solar without a large check on day one. The company that owns the system handles routine maintenance and repairs, which means you are not calling around for panel service if something breaks.
Solar Lease vs. Solar Loan vs. PPA
It helps to see a solar lease next to other common options. With a solar loan, you borrow money to buy the system, pay the lender each month, and own the panels once the loan is paid off. You get the tax credits and long-term savings, but you also take on maintenance and repair costs. A power purchase agreement works differently. The company owns and operates the system and sells you the power it makes at a set rate per kilowatt hour, often lower than your utility rate, instead of a flat monthly lease payment. A lease sits between these ideas. You pay a regular fee to use the system rather than paying by the kilowatt hour or paying down a loan on equipment you own.
Benefits Of Choosing A Solar Lease
The biggest draw of solar leasing is the lower barrier to entry. If you want solar but do not have cash on hand for a full system, a lease can get panels on your roof with far less upfront spending. The fixed monthly payment makes planning easier because you know what you owe for the system each month, even if utility prices jump. In many cases, the lease payment plus your smaller electric bill still comes in below your old utility bill, giving you savings right away. Maintenance coverage is another plus. Since the provider owns the system, the company has a strong interest in keeping it running and will usually take care of repairs, monitoring, and panel cleaning under the lease terms.
Drawbacks And Tradeoffs To Keep In Mind
Solar leasing also comes with tradeoffs that you should weigh before signing. You do not own the system, which means you will be unable to claim federal tax credits or other ownership-based incentives tied to the panels. The lease length can be long, so you are making a multi-year promise that follows you unless the contract allows a transfer or buyout.
Some leases come with payment escalators where the monthly amount rises on a schedule, which can trim your savings if utility rates stay flat for a while. Selling your home during a lease can also add steps, since the buyer may need to assume the agreement, or you may need to pay a buyout amount. If you like the idea of panels that increase the value of your home as an owned asset, a lease may feel less appealing.
Questions To Ask Before You Sign A Solar Lease
Before you commit, it pays to slow down and ask detailed questions. You will want to know the full contract length, what happens if you move, and whether there is a buyout option at different points in the lease. Ask whether the payment stays flat or increases, and how that pattern compares to historic utility price changes in your area. Find out what kind of performance guarantee the company offers and what they do if the system falls short of the expected output.
Ask how maintenance works, who monitors the system, and how quickly they respond if production drops. Clarify what happens at the end of the lease term, whether you can extend, buy the system, or have it removed. Clear answers on these points help you see the full picture of the agreement rather than just the starting payment.
Plan Your Next Step
A solar lease can be a solid path to cleaner energy and lower bills, but it is still a long-term contract that affects your home and finances. At Solar Liberty, we help you review solar proposals, explain lease and loan terms in plain language, and design systems that match your roof and goals. If you are thinking about a solar lease and want a second set of eyes on the details, schedule a consultation with Solar Liberty so we can walk through your options together.
