Solar Lease

A solar lease is a financing arrangement where you pay a fixed monthly fee to use a solar system installed on your roof by a third-party company. Unlike a PPA (where you pay per kilowatt-hour generated), a lease payment is the same each month regardless of how much electricity the panels produce.

Solar leases typically require zero money down and last 20–25 years. The monthly lease payment is set to be lower than your expected electricity savings, so you save money from day one. Like PPAs, the solar company owns the system, handles all maintenance, and claims the tax credits. The predictable monthly payment makes budgeting simple, but you don’t benefit from the federal ITC or any increase in home value from the panels (since you don’t own them). At the end of the lease term, you typically have the option to renew, purchase the system at fair market value, or have it removed. If you sell your home before the lease ends, the new buyer must agree to assume the lease or you may need to buy out the remaining term. Solar leases have become less popular as solar loan financing has improved, allowing more homeowners to purchase systems with zero down payment while still claiming the tax credit.