As the price of power keeps increasing, more and more people are looking for affordable energy sources. Solar energy is a great way to save money and help the environment but buying and putting solar panels can be expensive. Fortunately, solar loans make going solar a practical option that doesn’t cost much money.

A solar lease lets people use solar energy without having the panels. This makes it a good option for people who want lower energy bills but don’t want to deal with the hassles of owning them. But how does leasing solar work? What financial rewards does it have, and what problems might it cause? So you can decide if a solar lease is right for your home, let’s break it all down.

What is a Solar Lease?

A solar lease is a contractual agreement between a homeowner and a solar leasing company. Instead of buying, a customer selects a solar panel system for 15–25 years. In this case, the leasing business keeps ownership of the panels and the homeowner gets the benefits of solar energy at a steady monthly rate.

With a solar lease, people can use clean energy to power their homes without paying much upfront for installing and maintaining panels. Instead they pay the leasing company a set or rising monthly fee, making solar energy more affordable.

How Does a Solar Lease Work?

Responsibility and ownership

The leasing company owns and maintains the solar system; a crucial aspect of a solar lease.  User doesn’t have to set up, monitor, fix or ensure it works.  Solar leasing makes green energy easy because you don’t have to do anything.

Monthly Payments

Solar leases have either a set or an increasing monthly payment plan:

Fixed Payment Circulation: The renter pays the same amount every month for the length of the lease, which makes budgeting easy.

Escalator Payment: In some leases, the rent increases every year, but only by about 2 to 3 percent, which is usually less than the rate at which energy costs increase.

When you lease a system instead of buying it outright, your payments don’t change based on how much power the panels produce. The price is set at the beginning of the deal, so the costs stay the same over time.

Repairs and Maintenance

One of the best things about a solar loan is that it covers repairs. The leasing business owns the system, so they oversee all maintenance, repairs, and checks on its performance. This keeps homes from getting any surprises costs and makes sure the system works well.

Lease Ending Options

People who rent usually have three choices when their lease is up:

Lease renewal: Keep using the solar panels and extend the deal.

Purchase the system: The rental company has set a price for you to buy the panels.

Remove panels: The company takes down the system for free, returning the house to how it was before.

The best choice depends on factors such as how much electricity you need, how well the system works, and your financial goals at the end of the lease.

Solar Lease Financial Benefits

Lower Initial Costs: A loan doesn’t demand a large down payment like a $15,000–$25,000 solar system. This means customers can start saving on their energy expenses immediately without a loan or investment.

Predictable Energy cost: Utility rates change because of changes in the market, the price of fuel, and inflation. With a solar lease, payments are stable and easy to predict, making planning for energy costs easier.

Solar Incentive Access: People who buy solar systems for their homes may get tax credits, rebates, and other benefits. With a solar lease, on the other hand, these financial gains go to the leasing company, which lets them lower homeowners’ monthly lease payments. 

Possible Utility Bill Savings: Even though the panels are not theirs, people save money on energy bills. The idea behind solar leases is to save money on power costs, which makes renewable energy more appealing.

Pre-Solar Lease Considerations

Long-term dedication

Homeowners must be okay with making payments for a long time since most solar deals last 15 to 25 years. Before signing, looking at the lease terms and the expected energy costs is essential to see if the savings are worth it.

Selling Solar-Leased Home

If a homeowner wants to sell their house before the lease is up, they must do one of the following:

• Give the new homeowner the lease.
• Acquire the lease.

Considering this when selling a house is essential because not all buyers will be ready to take over a solar lease.

Use solar power in a smart way. With a flexible solar lease from Dowd Solar Group, you get savings, stability, and sustainability—all in one.

Understanding the Fine Print

Since each company has its lease agreement, homes need to look over the terms that apply to:

Escalation Rates: How much will the lease payment go up every year?

Maintenance Assurance: Repair and monitoring services

Buyout Choices: How much does it cost to buy the machine if you want to?

There won’t be any shocks if you read and understand the contract.

Who Should Lease Solar?

People who should get a solar loan are:

• Want solar energy without large upfront cost
• Choose regular payments that don’t change over energy bills that do.
• Do not want to take care of system repairs or upkeep.
• Not able to get solar tax credits but still want lower energy costs.

But if a homeowner wants to save the most money over time and get the most out of tax breaks, buying a solar system directly or getting a solar loan may be a better choice.

Conclusion

A solar lease is an easy way for homes to get the benefits of solar energy without paying a lot of money upfront or taking care of it. Leasing makes solar power more available to a broader range of households by making monthly payments more predictable and lowering electricity bills.

Simple and affordable solar power! Dowd Solar Group can install and maintain your solar panels while you save money on your energy bills.