Advantages & Drawbacks Of Leasing Solar Panels

by | Nov 20, 2023 | Energy Saving, Renewable Energy, Sustainability

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Like renting a vehicle or a house, solar panel leasing involves clients paying a set amount for the service they use. Because the client involved in a solar panel leasing system does not own the solar panels, they are not forced to pay for installation, upkeep, or repairs; instead, they may only pay for the power the solar panels supply to their houses. Although it may seem exciting, the financial benefits are not all that great. Let us understand the advantages and drawbacks of leasing solar panels.

Advantages & Drawbacks Of Leasing Solar Panels

Source: Eloi Omella

Advantages of Leasing Solar Panels

Here are some advantages of leasing solar panels:

  • No Upfront Cost – Leasing solar panels have several benefits over buying them, including the fact that the solar installer covers the complete cost of installation. They will install the solar panel system on your roof for little to no upfront cost if you agree to their terms and conditions.
  • No Tax Liability Needed – Since the clients are not purchasing the solar panels, there is no tax obligation. Solar leasing might be a terrific solution for rental residences that desire to use solar power. By leasing, the user avoids making a full purchase and pays on the lease until they vacate the property or until the solar firm terminates the lease agreement.
  • No Responsibility for Repairs or Maintenance – Customers do not need to be concerned about solar panels having flaws, operating at poor efficiency, needing maintenance, being damaged, or needing replacement parts. Customers may transfer their lease to a prospective buyer if they sell their home before it expires.

Drawbacks of Leasing Solar Panels

Here are some drawbacks to leasing a solar panel:

  • Home Value will not Increase – Because solar panels are rented and not purchased, they do not raise the value of your property. If the client decides to sell their house, it may be difficult to break the lease. It could be difficult to buy out the house early since some bidders might be hesitant to take over the lease.
  • No Benefits of Tax and Incentives – Users cannot benefit from federal or state incentives like tax credits or rebates since they do not own the panels.
  • Locked into Monthly Repayments for Many Years – Since lease agreements often last 10 to 25 years, the user must make monthly payments at that time. Customers who want to end a solar lease can buy out the contract, purchase the solar system at market price, move the panels, or transfer the lease to the new homeowner.
  • Pay for the Energy You Generate – To consume the electricity their solar panels produce; users must pay a monthly charge. However, this energy may be completely free if consumers own the grid.
  • No Net Metering Credits on Utility Bills – Owners of roof-mounted solar panels can sell any extra energy they generate to the utility provider in exchange for credits. On overcast days when the solar system doesn’t produce enough energy, these credits may be redeemed for less expensive power from the main grid. This process, known as net metering, is only possible if the homeowner owns the solar panels on the roof.

Before deciding on leasing solar panels, consider these pros and cons to determine if they align with your financial goals and priorities. Solar panels are always a better option for your residential or business power usage, whether leasing, renting, or buying.

Also Read: Is Solar Rooftop A Good Investment?



  • Michael Thompson

    Michael Thompson is an esteemed expert in the renewable energy sector, with a profound experience spanning over 25 years. His expertise encompasses various sustainable energy solutions, including solar, wind, hydroelectric, and energy efficiency practices. Michael discusses the latest trends in renewable energy and provides practical advice on energy conservation.

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