How Solar Lease Service Works

A solar lease agreement allows homeowners to have solar panels installed on their rooftop with no upfront equipment or installation costs. Instead of buying the solar system, homeowners sign a solar lease contract which ranges from 20 to 25 years. The solar company owns and maintains the solar panels for the contract duration and the homeowner only pays a monthly fee for the solar electricity generated.

solar lease service produce DC electricity which is converted to AC electricity by an inverter. Any excess solar electricity generated is exported to the grid and the homeowner receives credit. Net metering credits can be used to offset future electricity bills. This lowers the monthly lease payment amount. Homeowners do not own the solar panels but have the option to purchase them after the solar lease term expires.

Benefits of Going Solar Through a Lease

- No upfront equipment or installation costs. Solar leases remove the high upfront investment barrier which makes it very affordable for most homeowners.

- Predictable monthly payments. The lease payment amount remains fixed for the contract duration, shielding homeowners from rising electricity rates.

- Maintenance and repairs included. The solar company is responsible for any maintenance, repairs or replacements needed on the solar system during the lease period at no additional cost.

- Access to renewable energy without long-term commitment. Homeowners can enjoy clean solar energy through a manageable 20-25 year contract without needing to commit owning solar panels for 25+ years.

- Utility bill savings start right away. By producing solar electricity on-site, homeowners immediately lower their monthly utility bills through net metering credits applied to future usage.

- Possible tax incentives. Solar leases may qualify for federal tax credits of up to 26% of system costs which lowers the effective monthly lease payment. Some states also provide additional incentives.

- Equipment upgrades covered. The solar company is responsible for replacing or upgrading system components as technology advances, like switching to more efficient solar panels in future, at no additional cost during the lease term.

Risks and Limitations of Solar Leases

While solar leases remove the large upfront cost barrier, the length of the contract brings certain risks and limitations:

- Long-term commitment. Solar leases typically lock homeowners into a 20-25 year contractual payment agreement. If moving houses before the lease ends, the remaining payments need to be made.

- Equipment ownership. Homeowners do not own the solar panels at the end of the lease. They either need to renew the lease or purchase the system to continue receiving solar energy. Ownership purchase options may be available but at a price.

- Payment adjustment risk. The lease agreement usually allows for a one-time payment increase to account for unforeseen cost increases. This subjects homeowners to possible payment fluctuations over the long lease term.

- Lack of system upgrades. Unlike outright ownership, homeowners may miss out on technology improvements or efficiency gains as the solar company waits till end of lease term to replace equipment.

- Credit checks involved. Qualifying for a solar lease requires the homeowner to pass credit checks, similar to loans or financing applications. Poor credit can disqualify or increase lease payment amounts.


In Summary, a solar lease service offers an affordable option to go solar, receive instant utility bill savings and be sheltered from equipment maintenance and repair costs over 20-25 years. However, the length of the lease contract commitment brings some risks. Homeowners need to carefully evaluate their plans to stay put for the long term before signing on. Finding the right solar installer and negotiating a fair lease contract can help maximize benefits and minimize disadvantages. With awareness of both pros and cons, most homeowners find solar leases a very workable solution.