What to Know About Leasing Solar Panels

By Laure Justice

March 22, 2025

Like catching rays at the beach without spending money on sunscreen, leasing solar panels lets you soak up solar savings without the hefty price tag up front.

This May Also Interest You: What’s It Like to Go Solar? 5 Things They Don’t Tell You in the Brochure

While going solar has never been more popular, the up-front costs can still feel overwhelming for many homeowners. Understanding all your solar financing options will help you make the right choice for your home and budget.

What Are Leasing Programs for Solar Panels?

Solar panel leasing programs let homeowners install solar panels on their property without purchasing the equipment outright. Instead, a solar leasing company owns, installs and maintains the solar panel system on your roof. You make monthly lease payments to use the system and benefit from the electricity it generates.

How Long Is a Typical Residential Solar Panel Lease Term?

Most solar leases run for 20 to 25 years, roughly matching the expected lifespan of the solar power system. During this lease term, the leasing company typically handles all maintenance, repairs and monitoring to ensure optimal performance. This arrangement appeals to homeowners who want renewable energy savings without the responsibility of system ownership.

How Do Solar Leases Differ From Buying Solar Panels Outright or Paying for a Loan?

When comparing lease vs. buy solar options, several key differences emerge that impact both your short-term costs and long-term benefits. Purchasing solar panels outright means you pay the full up-front cost of the solar energy system, but you own the equipment immediately. This option typically offers the highest long-term financial returns because you receive all the electricity savings and any available tax incentives directly. Solar loans offer middle-ground solar financing options. With a loan, you still own the purchased solar panels, but you can spread the cost over time through monthly payments. Like buying outright, you remain eligible for tax benefits while avoiding the large initial investment.

Leasing solar panels involves no up-front cost, or a very minimal one. However, you don't own the system, which means you won't receive tax incentives, and your long-term savings may be lower than with ownership options. The solar leasing company receives any available tax benefits, though they may pass some savings to you through lower monthly lease payments.

What Are the Pros and Cons of Leasing Solar Panels?

Understanding the advantages and disadvantages helps determine if a solar lease aligns with your energy goals and financial situation.

Pros of Solar Panel Leases

Little to no up-front cost makes installing solar panels accessible for more homeowners.
Maintenance and repairs are typically covered by the leasing company, removing this responsibility from homeowners.
There's an immediate reduction in utility bills, often seeing savings from the first month.
Homeowners don't need to understand complex solar technology or monitor system performance.
It provides protection from rising energy bills through fixed lease payment structures or predictable escalators.

Cons of Leasing Solar Panels

Lower long-term financial returns compared to buying solar panels.
No eligibility for solar tax incentives, which can be substantial.
Contracts can be lengthy and complex, sometimes with escalating payments over time.
Potential complications when selling your home if the new buyer doesn't want to assume the lease.
Less flexibility to modify your system as technology improves or your energy needs change.

More Related Articles:

If You Sell Your House While Leasing Solar Panels, What Happens?

Selling a home with leased solar panels adds an extra consideration to the real estate transaction. Typically, you have three main options:

Transfer the lease to the new homeowner. This is the most common solution, but it requires the buyer to qualify for and agree to take over your solar lease terms.
Buy out the remainder of the lease. If your prospective buyer doesn't want to assume the lease, you can pay off the remaining lease balance to own the system outright and include it in the home sale.
Move the system to your new home. Some solar leasing companies let you relocate the system, though this option includes additional costs and may not be practical in all situations.

The impact on home value can vary. While studies show that owned solar panels generally increase property values, the effect of leased systems is less clear. Some buyers view them positively for their utility bill reduction potential, while others may be hesitant to take on a long-term contract.

Is 'Free Solar' Really Free?

You may have seen advertisements offering "free solar" through leasing programs. While these arrangements eliminate up-front costs, they're not truly free. You'll still make monthly lease payments throughout the contract term. The appeal of these programs is that your combined new expenses — lease payment plus reduced electricity bill — are designed to be less than your previous energy bills. However, it's essential to carefully review the lease terms, particularly any payment escalation clauses that might increase your costs over time.

Leasing solar panels offers an accessible entry point to renewable energy for many homeowners. By weighing the financial implications, the contract terms and your long-term housing plans, you can determine whether a solar lease, loan or outright purchase best aligns with your goals. Whichever solar financing option you choose, you're still contributing to a greener future by reducing your reliance on fossil fuels.

Follow us