Leasing Solar Panels, Pros and Cons

Last Updated: July 9, 2021

People are embracing the solar panel system. The prominent reason is we can save our money by using a solar panels system, plus it also less pollutes the environment. Entering the solar industry is costly initially. To increase the number of users of solar energy, companies have introduced different ways to use solar energy. If you go for those options, they will also save you money. Whether to lease or buy, is dependent on financial condition. Leasing solar panels is another way to use solar energy. We know everything has pros and cons. Buying and leasing solar panels are two different aspects. Which one of them is better for you is dependent on the financial situation. Today we will be discussing leasing solar panels, their pros and cons.

But you want to use solar panels and have no idea whether leasing is better or buying, we will put information as much as we would be able. We will differentiate both aspects of getting into the industry. We would provide information regarding key factors that everyone should consider. We have discussed it is all about money. If you have thousands of dollars, then you should go for buying, because in that way you would save more money and for a long time. But you have currently no money and want to use solar energy, you can lease. We will discuss the advantages and disadvantages of leasing later in this article. Let’s talk a little about why to use energy, what are its benefits. Let us take an overview.

Solar Energy

Solar energy is what we get from the sun. It is a renewable, less costly energy. It does not harm the environment at all. It reduces global warming effects. Overall, it beneficial for humans and the globe. It will save you a good amount of money. There are many other considerable and useful factors like they need low maintenance. You just need a huge amount in the starting. It is easy to install. We already have articles regarding the components of solar panels system, you can check them out for more information.

Leasing Solar Panels

You can say leasing solar panels is a financial option in which you lease solar panels from a solar company. Leasing is like signing a contract. You have to pay fixed monthly lease payments for the duration. Leasing is better if you do not have a wad of cash. The duration of the contract ranges from 20-25 years usually. Homeowners pay 20% to 30% lesser than they were paying electricity. There is often no down payment. Leasing is one of the greatest factors why consumers are growing at a rapid pace. The homeowners just pay a fee to the company. If panels are producing more energy than you, then they may offer net metering. When the contract is about to end or ends, you can buy solar panels or renew the contract.

In the case of panel working failure or any other break, the solar company will pay the expenses. Even the company will also maintain the performance of the solar panel system at some cost. There is another thing known as Power Purchase Agreement (PPA). We will discuss it later. It is the same as the leasing solar panel is. People who lease solar panels get the main advantage of this is their electricity bill costs lesser than if they were connected to the grid.

Leasing Solar Panels, Pros

Leasing solar panels allow you to get entered into the industry. Here are some merits of leasing solar panels.

Instalment cost and entrance:

Usually, when you buy panels, you need installers to install the complete setup. But when we talk about leasing the solar panels, the company will pay the expenses of instalment. For some people, the instalment price is not affordable with buying at the same time, it can cost up to $30,000. Not every individual can afford solar panels along with instalment expenses. Everyone’s financial condition does not allow them to install solar panels. It is complicated to buy a solar panels system. On the other hand, we need to analyze and need consultants, leasing abolishes these all hurdles seemed problems. Solar leasing simplifies everything regarding instalment. So the leasing solar panel system entered you into the industry of solar energy, where even you can get benefit personally and globally.

Low electricity bills

The boldest benefit of leasing solar panels is the low electricity bill. Leasing solar panels cost you lesser than connected to the grid.

Maintenance and monitoring

If you buy solar panels, you would have to take care of them. Solar panels need maintenance like dirt cleaning. But if you lease solar panels, it is the company that will maintain the performance of panels. The solar company will take care of solar panels. They will also monitor the performance of every solar panel. As a homeowner, you do not have to worry about panel performance. They may charge little for their services.


Suppose there is time arrives you have to leave the house or sell the house in case of an emergency. Solar panels can be leased to the buyer easily. Or assume that the buyer wants to use solar panels, then it would good for you that you do not need to worry about.


When you do not buy but lease or do a power purchase agreement, you have two choices. In leasing, you have to pay a fixed price, but if we talk PPA, you pay for what you consume. In this way, you can save money by using lesser energy.

Owning panels:

Suppose you want to have solar energy, but your financial situation does not allow you to buy on the spot. Suddenly an idea comes into your mind, “Why do not you lease solar panels?”, and you lease panels. If you lease panels for 15 years or more than that and you start saving, you would be able to buy panels at the ending of the contract. Leasing, in this case, can help you to accomplish what you want.

Nonstop Electricity

Even the weather is cloudy and there some other hurdles, which can decrease the production and performance of panels, then it is not your concern. The company will be responsible for this, and they will provide you with electricity through any source. They may connect fasten to the grid.

Leasing Solar Panels; Cons

Leasing solar panels have drawbacks/cons too.

Tax Credits, Rebates:

Leasing solar panels will deprive you of tax incentives. The relief on tax will go to the solar leasing company. Usually, the government provides up to a 30% cut on a single installation. All relaxations regarding tax credits and other benefits will go to the company. You cannot grab any opportunity regarding tax off. Because you had never bought them, you just leased them for a duration of time. Some governments provide a discount for installing. You can be eligible for manufacturer’s rebates and special benefits called Solar Renewable Energy Certificates (SRECs). But these types of programs are vanishing as solar energy is getting cheaper every month. The notable point is that you cannot qualify for various tax credits.


If your contract duration is 20 years, you would be bounded to pay every month. In case, you get late to pay, you would have to pay extra money. There is one thing that everyone would agree with, your own has a distinguished taste. You have a complete right to do whatever you want.


Homeowners would pay the maintenance cost to the company. It is possible they do not charge you for little services, but you cannot grab high notch service. And may affect the performance of your panels.

House Leaving

In case you have to leave your house, managing leased solar panels is a little difficult. Another thing is that if the upcoming dweller does not want to lease solar panels due to any situation, maybe at that time, better and cheaper products available in the market. You may pay a break fee to the company. Another thing is that leasing does not add value to your home but buying solar panels does add. Buying solar panels increase the value of the home. Each watt of solar adds about $4 to a home’s value in some states of America. Solar adds about $3/watt to a home’s value everywhere else in the world.

Electricity Price

There is no clue you have how much the company will increase the prices of electricity every year. You have no clue what the cost would increase by 3-4%. But we all know that wind and solar technologies are getting improvement every day.


Whenever we buy solar panels or lease panels, the only reason behind switching to solar energy would be we could save money. So, while switching to solar energy would surely save you money, but if you be dependent on the way you choose. If you buy solar panels, you would be able to more than money. But if lease solar panels or sign a power purchase agreement(PPA), your savings would be lesser if you go to buying.

Net Meter Credit

When you own a solar panels system, the overabundance of energy your system produce can help you out. You can sell a surplus amount of energy to a company. This would be beneficial when your system could not be producing energy due to any reason like cloudy sky etc.

Differences in Buying and Leasing:

The company would install according to their will, regardless of how many panels to be installed. People usually emphasize others to buy solar panels rather than leasing because you would have control completely over panels. They will install wherever you want them, even if solar panels do not harness energy the most. Solar panels leasing is not an investment, but buying is. You can save more money by buying solar panels rather than leasing them. As we discussed above, we get relaxation in tax-paying. The point is if you buy solar panels, your savings will be more than you do while leasing solar panels. The most irritating thing is that whether PPA or leasing is long term contract. You have to be for a long period.

Solar Leasing vs PPA

Power purchase agreement (PPA):

PPA is a little different from leasing. You pay for what you use. It means the homeowner will pay for the energy they use. PPA contracts usually last 20+ years. The advantages are the same as leasing has. But there is one further advantage of PPA is you pay for what you use. The disadvantage of PPA is you have no idea how much prices would be increased per year. But that increased price will be lesser than you buying electricity from the utility.

Leasing solar panels:

You lease solar panels and other components, but you pay a fixed monthly lease payment for the duration you use. It ranges from 15-25 years. In leasing and PPA, the company would be responsible for maintenance and monitoring, etc.

Why leasing and Power Purchase Agreement (PPA) is available?

Leasing and PPA are opportunities for those who can not afford solar panels system. Usually, there is often no down payment. They both provoke people to go to solar panels without upfront costs. If you just could not save money at the end of the contract for buying solar panels, you would have a chance that you can renew the contract and start using solar energy. Many companies provide leasing and PPA, but some companies only provide leasing, they do not provide a contract like PPA. The company controls all the paperwork. So this hassle-free that you do not have to care about paperwork. So leasing and PPA are more affordable than buying but the thing is you can save more money than by buying.

Other Ways to Access Solar Energy

Leasing solar panels and PPA are not the only way to go to solar energy, there are many other ways to get Solar loans, Cash purchases, Prepaid leases. Solar loans allow you to affordably finance the system. In this way, you can take advantage of tax credits. It also adds value to your home. Prepared leases allow you less upfront cost, but you would miss tax credit.

Now you know the facts regarding leasing solar panels. Leasing solar panels have some benefits, but also some disadvantages.

Video On Should you buy or lease Solar Panels


Leasing solar panels pros and cons were discussed briefly in this article. If you need more information on the topic, please contact us. Why don’t you share your thoughts in the comment section? Let us start a healthy deavte4

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