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Are Leased Solar Panels Worth It? (2024)

Author Image Written by Tamara Jude Updated 04/24/2024

Choosing the right solar panel financing option will make going solar more affordable and extend your long-term benefits. A solar lease can help you avoid hefty upfront installation costs and enable you to benefit from energy savings sooner. However, it can also negatively impact solar incentive savings and home value.

We researched the pros and cons of solar leasing and how it compares to other financing options so you can decide if a solar lease is right for you.


4 Best Solar Companies of 2024

Best Solar Leasing : SunRun
Best Customer Support : Palmetto Solar
Best East Coast Installer : Solar Energy World
Most Reputable : Blue Raven Solar

What Is Solar Panel Leasing?

Many leading solar panel companies offer solar leases as a more cost-effective way for customers to sign up for a solar system. Under this agreement, you make monthly lease payments and get full access to all solar power generated, which helps lower your utility bills.

Solar leasing works best for homeowners who can’t afford the high upfront costs of purchasing solar panels or the responsibility of ongoing maintenance. With solar leasing, you can invest in some of the best residential solar panels without a large initial payment and still benefit from long-term savings. Your solar company will even handle any upgrades and repairs at no cost.

The biggest drawback of choosing a solar lease is that it disqualifies you from solar incentives since you don’t own the system. Solar incentives would lower your overall investment and make your move to renewable energy more cost-effective.

Other payment options, such as a cash purchases or solar loan, provide better long-term energy savings than solar leases because they allow you to take advantage of all solar incentives. You’ll also see more savings once your solar payback period ends. On average, this takes six to 10 years. After that, you benefit from all of the energy cost savings. Solar leases offer lower solar savings since you’re continuously paying your installer.

  • Solar lease agreements typically last 20 years and often include a solar lease escalator, meaning your repayments will increase annually based on current market pricing. In addition, solar lease agreements are often hard to break and may include early termination fees.
Company Star Rating Warranties Payment Options Link
4.5
10–25 years Full purchase, loan, lease, PPA GET QUOTE
4.4
10–25 years Full purchase, loan, lease, PPA GET QUOTE
4.4
25–30 years Full purchase, loan, lease, PPA GET QUOTE
4.4
10–25 years Full purchase, loan GET QUOTE
4.4
25 years Full purchase, loan GET QUOTE
4.4
25 years Full purchase, loan, lease, PPA GET QUOTE
4.6
25 years Full purchase, loan, lease, PPA GET QUOTE
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Pros and Cons of Leasing Solar Panels

Pros No obligation to own your solar system No significant up-front payment is required Solar provider maintains the system for you
Cons Disqualification from solar incentives, rebates, and credits Early termination fees for breaking your agreement early Monthly payments may increase each year

Solar Panel Leasing Terms

The typical solar lease lasts around 20 years, but terms may vary between solar panel installation companies. Some companies offer leases for up to 25 years, which aligns with the average home solar panel life span.

Your lease agreement will include panel maintenance and servicing terms for the length of your contract. You may also benefit from the following:

  • System monitoring with a dedicated web portal or app access
  • Online payment options
  • Proactive alerts if any issues are detected
  • Performance guarantee of a minimum system output

Your lease contract will include details on the payment schedule. Solar leases usually require zero up-front costs and only include monthly fees. However, these monthly fees may increase over time. Many lease contracts include escalator pricing that adds 1%–5% to your annual fees. For example, if you pay $150 per month in your first year, it could increase by a minimum of 1% the following year. This upward trend will continue throughout your lease term to account for rising costs. 

You’ll have several options for your solar system at the end of your lease, including the following:

  • Extending your current lease and entering into another contract
  • Purchasing the solar system and gaining legal ownership
  • Removing the system from your home

It’s worth noting that you may be responsible for insuring the solar panels yourself. As the system owner, the leasing company typically carries insurance on the panels—but not always. Check the terms of your lease for hidden costs and responsibilities.

Ending a Solar Lease Early

Ending a solar lease early is a complex process. Many solar providers include early termination fees and additional clauses that make breaking the lease challenging. For example, if you plan to sell your home, having a solar lease makes it harder to complete the transaction. In these cases, you must select from one of the following choices:

  • Buyout: Pay the remaining value of the lease before selling your home, either based on a predetermined price in your contract or the system’s fair market value. This could require a substantial payment if you have a lot of time left on your lease. 
  • Relocation: You may be able to move the panels to your new home if it’s within the provider’s service area and meets installation requirements.
  • Transfer: Attempt to find a buyer willing to take over the lease. For this to work, the new homeowner must meet all of the provider’s qualifications, including a credit score check. Transfer terms can vary significantly between companies.
  • Default: If no other option is viable, you might have to default on the lease, which can significantly impact your credit.

We recommend avoiding a solar lease if you plan to sell your home before the lease agreement ends. Consider using different financing options, such as a cash payment, which grants full system ownership. The transfer is much more straightforward, and owning your solar system may boost home value.


Other Solar Panel Financing Options

You should review all available financing options before committing to a solar lease. Most solar providers offer two or more financing options. We’ve broken down the most common ones below. 

Cash Purchase

Solar Loan

Solar PPA

Using a cash purchase for your solar energy system offers several benefits. Paying upfront gives you immediate and full ownership of the solar system, so you won’t have to worry about interest rates or monthly fees.

A cash purchase also makes you eligible for all solar incentives that help reduce solar panel costs. For example, you can use the federal solar tax credit to write off up to 30% of installation costs and apply the savings to your federal tax liability. Ultimately, an upfront purchase offers the best return on investment (ROI) and long-term energy bill savings. 

Solar loans provide a middle ground between cash purchases and leasing. Homeowners make an initial down payment, followed by monthly payments toward their system costs. Some solar companies may even offer a $0 down option. Your full system cost will increase due to added interest rates, but you will own the system, and solar incentives can help offset the interest cost

Solar loan length varies between providers but could last 10–20 years. Some providers offer special financing terms, such as fixed interest rates for a set time frame. Some companies also provide in-house loan options, eliminating the need for third-party financiers. Interest rates vary based on your credit score.

A solar Power Purchase Agreement (PPA) is another third-party financing option where you don’t own the system. Instead, you pay the solar company for the electricity you use each month—typically at a rate lower than your utility. The solar company calculates payments based on kilowatt-hours (kWh), and payments can fluctuate depending on how much electricity the system produces. You typically pay less for clean energy compared to standard electricity costs.

PPAs involve zero or minimal upfront costs and long-term contracts (often 20+ years). They don’t offer the ROI of solar loans or cash purchases, and you’ll miss out on solar incentives since the solar provider retains ownership of your solar system. However, the leasing company handles all maintenance and repairs.

PPAs may include escalators, meaning your price per kWh can increase over time, and their availability varies state-by-state. According to the Database of State Incentives for Renewables & Efficiency (DSIRE), only 29 states, plus Washington, D.C., and Puerto Rico, allow PPAs as a financing option for solar panels. Six states disallow solar PPAs, while the status in several other states is unclear.

To learn more about the various financing options and how to avoid common solar panel scams, check out the video below with home technology expert Ross Trethewey:


Are Leased Solar Panels Worth It?

Leasing a solar system usually provides less financial benefit in the long term than owning your system outright. Your monthly payments aren’t paying down a loan balance, nor will you own the system when the lease ends. Since most of your payments go toward leasing fees, you’ll have lower electric bill savings and a lower ROI.

Solar leases are difficult to break and can complicate your home sale. They may have complex or costly early termination options, and you won’t benefit from the boost in home value that solar ownership provides. In addition, leases often include fees and escalator clauses.

However, there are circumstances where leasing might make sense. Solar leasing works for homeowners who don’t want to own a solar system and don’t have plans to sell their homes in the next 20–25 years. Leases can be a cost-saving alternative if you can’t afford a cash payment or won’t qualify for a solar loan with favorable interest rates. 

Ultimately, the best choice depends on your budget, future plans, and your goals for a solar investment. We generally recommend choosing an up-front payment or solar loan to maximize your solar investment and energy savings, but you should compare all financial options before deciding.

Our Top Solar Company Picks

Sunrun

4.5

We like Sunrun for its four financing options, including its unique leasing options if you don’t want to own your system. This stands out to us because the other companies on this list don’t offer as many options.

Prepaid and leased systems also include a 25-year warranty with system service and maintenance, ongoing monitoring, and theft insurance. The company even offers financing plans for quality monocrystalline solar panels and products from trusted brands such as LG.

How We Scored Sunrun

Sunrun earned 4.4 out of 5 stars based on our methodology. The company gained many points for its positive reputation, comprehensive leasing options, and well-rounded warranty coverage. It lost some points for is limited service selection.

  • Solar Equipment and Services (15 out of 25 points): Sunrun provides solar panel and battery installation but uses third-party installers. Though this is becoming an industry standard, in-house installers typically yield better communication and quality. The company also doesn’t provide roofing services or energy audits but does offer quality active monitoring assistance. 
  • Warranty and Performance Guarantees (19 out of 25 points): Sunrun offers quality warranties, such as its 25-year manufacturer and labor warranty, but doesn’t include a performance guarantee. 
  • Brand Reputation and Professional Certifications (13 out of 15 points): Sunrun has one of the higher customer BBB ratings we’ve encountered, and the company maintains an overall positive customer reputation online.
  • Financing Options (13.5 out of 15 points): The company doesn’t offer any in-house financing but provides more warranty coverage for customers interested in solar leasing than other providers, such as Palmetto.
  • Industry Experience (9 out of 10 points): Sunrun holds 17 years of experience in the solar industry, making it a veteran compared to a newer company such as Blue Raven Solar.
  • State Availability (8 out of 10 points): The company only serves 18 states.

Pros and Cons

Pros Provides system monitoring that signals issues with your system Offers diverse financing options to suit various budgets Provides EV and solar battery solutions Cons Limited online information on solar incentive disqualification with leases Requires added costs for the same coverage plans as leased and prepaid customers Varies solar battery availability by state

Warranty and Financing

Warranty

Sunrun backs its systems with a 10-year comprehensive warranty which includes product, roof penetration, and workmanship coverage.

Financing Options

✔ Full purchase
✔ Loan
✔ Lease
PPA

State Availability

Available in: California, Colorado, Connecticut, Florida, Hawaii, Illinois, Massachusetts, Maryland, Nevada, New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, plus Washington, D.C. and Puerto Rico.

Reputation and Reviews

The company earned DroneDeploy’s 2022 Guardian of Safety Award for incorporating drone technology in its site assessments. In 2021 and 2022, Sunrun was recognized by Comparably with 14 awards. Its accolades include Best CEOs for Diversity 2022, Best Company Culture 2021, and Best Company for Women two years in a row.

Sunrun currently holds an A+ rating from the BBB and is accredited. Former customers praised the comprehensive coverage for leased systems but complained about delayed installations, poor customer service, and poor communication with project managers. Additionally, some customers note being confused by Sunrun’s leasing and PPA options, though they also mention Sunrun is willing to discuss and clarify these plans.

Palmetto

4.4

Palmetto Solar offers a wide range of quality solar products and excellent customer service, including phone, email, and online chat options, an online service request portal, and a library of troubleshooting resources. Overall, Palmetto offers more customer support than other providers we reviewed, most notably through its tiered system protection plans and mobile app.

How We Scored Palmetto Solar

Palmetto earned 4.4 out of 5 stars according to our methodology. The company scored more points for its comprehensive service selection and long-term protection plans. It lost some because of its standard warranty options and lack of production guarantee. 

  • Solar Equipment and Services (20 out of 25 points): Palmetto offers an excellent selection of solar services, including solar battery and electric vehicle (EV) charger installation, energy audits, and active monitoring.
  • Warranty and Performance Guarantees (16 out of 25 points): The company’s warranty options don’t stand out as much as Sunrun’s. It offers industry-standard coverage for 25 years on products and 10 years on labor.
  • Brand Reputation and Professional Certifications (14 out of 15 points): Palmetto has a highly positive online reputation on popular review sites such as the BBB. The company also screens its installers to ensure they’re certified with the North American Board of Certified Energy Practitioners (NABCEP).
  • Financing Options (13.5 out of 15 points): Palmetto doesn’t provide in-house financing but offers all possible payment methods.
  • Industry Experience (8 out of 10 points): Palmetto holds a decent amount of experience, with 15 years in the industry.
  • State Availability (8 out of 10 points): The company serves 17 states.

Pros and Cons

Pros Gives access to customer support via email, chat, phone, and app Offers a tiered system protection plan Provides an online solar savings calculator to estimate potential savings Cons Limits its active monitoring services to three years Shorter roof leak and workmanship coverage than other installers Some online reviews mentioned permitting and installation delays

Warranty and Financing

Warranty

Palmetto’s warranty protection includes a 25-year panel warranty, 12-year inverter warranty, 10-year workmanship warranty, and five-year roof penetration warranty.

Financing Options

✔ Full purchase
✔ Lease
✔ Loan
✔ PPA

State Availability

Available in: Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Nevada, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia

Reputation and Reviews

Palmetto Solar received Solar Power World’s Most Forward-Thinking Contractor award in 2022. Inc. magazine recognized the company the same year with a Power Partner Award. Palmetto also aims to provide solar energy to underserved communities with its Get Solar, Give Solar program.

Palmetto Solar is accredited by the BBB and has an A+ rating from the site. While reading online reviews, we noticed that homeowners praised Palmetto for its dedicated installation managers and quality systems but mentioned very long waiting periods for permitting, plus installation delays.

Solar Energy World

4.4

Solar Energy World (SEW) is one of the most robust and well-regarded solar installation companies. It boasts several impressive features, such as its 30-year manufacturer’s warranty. Its service area is limited, and it doesn’t offer energy auditing services. We like that SEW discloses what solar panels it primarily works with and that the panels are from trusted, quality brands such as Qcells and Silfab.

Roughly 11% of our surveyed solar users purchased their system from Solar Energy World.

How We Scored Solar Energy World

SEW scored 4.4 out of 5 stars according to our methodology. The company received many points because of its warranty, which is longer than most other solar companies’ warranties. SEW offers a 30-year manufacturer’s warranty on all its solar panels and inverters, whereas many providers only offer 25-year warranties.

  • Solar Equipment and Services (18 out of 25 points): The company is an ideal option for many basic solar products and services, such as solar panels and battery installation. It lost points because it doesn’t install EV chargers or perform energy audits.
  • Warranty and Performance Guarantees (19 out of 25 points): SEW’s manufacturer and labor warranties are standout features, but the company doesn’t include any production guarantees with its work. 
  • Brand Reputation and Professional Certifications (15 out of 15 points): The company’s reputation is one of the best, with high BBB and Google Reviews ratings. We also found no active alerts or lawsuits.
  • Financing Options (13.5 out of 15 points): SEW offers all possible solar payment options but doesn’t provide an in-house financing department. 
  • Industry Experience (8 out of 10 points): The company has been in business since 2009, so it received most of the points in this category.
  • State Availability (6 out of 10 points): SEW limits its service area to eight East Coast states.

Pros and Cons

Pros Features an extensive solar product catalog with trusted brands Includes free active monitoring Hires NABCEP-certified installers and designers Cons Reviews mention communication issues with staff Warranty coverage varies by solar panel brand Doesn’t offer a power production guarantee

Warranty and Financing

Warranty

SEW offers a 30-year manufacturer’s warranty on all purchased solar panels and inverters. However, coverage varies by brand, and the company doesn’t guarantee them with every panel option. 

Financing Options

✔ Full purchase
✔ Loan
✔ Lease
✔ PPA

State Availability

Available in: Washington, D.C, Delaware, Florida, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, and Virginia

Reputation and Reviews

The company landed on Solar Power World’s 2023 Top Solar Contractors List in the No. 10 spot.

The BBB accredits SEW, and the company holds an A+ rating. Former customers praise the company for its professionalism, assistance with applying for financial incentives, and smooth installation process. However, some reported discrepancies in finances and scheduling.

Blue Raven Solar

4.4

Blue Raven Solar has one of the best reputations for reliability and trustworthiness. It has won awards for its team and CEO, and customer reviews report great customer service and prompt installations. The company also stands out for its in-house financing, which includes 18 months of free solar energy.

Out of all solar brands in the market, 6.5% of our survey respondents chose Blue Raven.

How We Scored Blue Raven Solar

Blue Raven received 4.4 out of 5 stars according to our rating system. The company scored the most points for its customer service reputation and warranty coverage. It also earned points for providing all standard solar panel services but lost some due to its limited financing options and lack of roof leak coverage.

  • Solar Equipment and Services (18 out of 25 points): Blue Raven offers solar panel and battery installation, active monitoring services, and energy audits. However, it doesn’t offer solar roofs, EV chargers, or additional roofing services. 
  • Warranty and Performance Guarantees (22 out of 25 points): The company offers top-of-the-line warranties, including a 25-year workmanship warranty. The company earned points fo providing a performance guarantee, but its guarantee is shorter than many other providers. However, it doesn’t provide any roof leak coverage. 
  • Brand Reputation and Professional Certifications (13 out of 15 points): Blue Raven has high customer review ratings on its BBB profile and other popular review sites. The company uses in-house installers but doesn’t ensure they’re NABCEP-certified, which made it lose some points in this category.
  • Financing Options (12 out of 15 points): Blue Raven offers some of the best in-house financing of the companies this list, but it limits this financing to solar loans. You may want to consider a different provider, such as Sunrun, if you’re looking for a lease or PPA.
  • Industry Experience (7 out of 10 points): Blue Raven has less experience than other providers, with only 10 years in the industry.
  • State Availability (7 out of 10 points): The company limits its service area to 19 states.

Pros and Cons

Pros Offers SunPower’s high-efficiency panels and storage options Provides a unique in-house financing option which includes 18 months of free solar energy Recognized as one of the industry’s most reputable solar companies Cons Offers one of the shortest production guarantees among our reviewed companies Some customer reviews mention poor communication Workmanship warranty falls slightly below the industry standard

Warranty and Financing

Warranty

A Blue Raven system has a 25-year product warranty, a 10-year workmanship warranty, and a two-year production guarantee.

Financing Options

✔ Full purchase
✔ Loan

State Availability

Available in: Colorado, Florida, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nevada, North Carolina, Ohio, Oregon, South Carolina, Texas, Utah, Virginia, Washington

Reputation and Reviews

Blue Raven has won numerous awards from Comparably, a site known for its company culture and reputation reviews. It also ranked No. 20 on Glassdoor’s Best Place to Work in the USA in 2021.

Blue Raven is accredited by the BBB and currently holds an A+ rating. We noted that customers praised the knowledgeable staff and prompt installation but cited poor communication after completing projects. We analyzed several consumer reviews and found that some of these issues stem from the company’s financing department and third-party installers.

Read our review of Blue Raven Solar for more information.


Our Conclusion

Leased solar panels offer solar system savings without a large upfront payment. However, they eliminate many benefits of system ownership, including savings on energy bills and savings on installation costs related to incentives for owners. We recommend weighing your financing options before committing to a solar lease. Request quotes from at least three solar providers and thoroughly review their products, services, and financing options. 

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FAQ About Leased Solar Panels

What happens to solar panels after your lease ends?

After your lease ends, you can have the solar panels removed from your property or extend the lease. Some providers also allow you to purchase the solar panels. 

What is the main difference between a lease and a purchase?

The main difference between a solar lease and a purchase is system ownership. A solar lease allows you to lease the panels from a solar provider, but you never legally own them. A cash purchase makes you the system’s owner and qualifies you for added solar savings from solar tax credits, incentives, and rebates. 

Do leased solar panels qualify for a tax write-off?

No, you can’t write off leased solar panels. You must legally own your solar system to qualify for a tax write-off.

Is it worth buying a house with leased solar panels?

Buying a house with leased solar panels can be worth it for the potential electricity savings. However, you should review the lease terms thoroughly and weigh the financial implications before making your decision. You’ll need to assume the contract, which can include escalator clauses (increasing payments) and complicate selling the house later.

To share feedback or ask a question about this article, send a note to our Reviews team at reviews@thisoldhousereviews.com.