SHOULD I PURCHASE OR LEASE A SOLAR SYSTEM?

According to Solar Power Authority, there are several options for getting a solar PV system:

• Buying A Solar PV System.
  You can learn more about this option at PACE Financing and Personal Loan Financing.
• Leasing A Solar PV System.
  You can lease a solar PV system – this option is discussed below.

Consumer Reports may also help you better understand the pros and cons of Leasing Vs Buying a solar PV system.

WHAT IS A SOLAR LEASE?

According to EnergySage, Solar Lease represents one of the options available to homeowners for getting a solar PV system. If you are interested in lowering your electrical bills and you can’t take advantage of the current Federal Tax Credit and other financial incentives, or you are unable to qualify for a loan, you may consider leasing the solar PV system instead of buying it.

There are two types of financing arrangements available to homeowners:

• Solar Lease.
  You can lease a solar PV system and pay a fixed monthly fee to the solar leasing company for the term of the lease between 20 to 25 years. The monthly leasing fee may be subject to annual escalation.
• Power-Purchase Agreements (PPAs).
  You can use a PPA contract and agree to pay a specific kWh rate for electricity produced by the solar PV system on a monthly basis. The term of the PPA contract is also between 20 to 25 years and the specified kWh rate may be subject to annual escalation.

Note: Commercial solar leases can be customized, and generally range from 7 to 20 years.

SOLAR LEASE AND PPA ADVANTAGES

Both, Solar Lease and PPA, offer certain advantages to homeowners:

• You can get the use of a solar PV system even if you don’t qualify for a loan.
• You can get the use of a solar PV system with a very low downpayment or without a downpayment.
• You can receive immediate savings on your electricity bill by paying lower monthly fees or kWh rates.
• You can have peace of mind, because the solar leasing company will be responsible for the solar PV system maintenance and any repairs.
• You will receive free online, smartphone, or tablet program to track your solar panel system's performance.
• You can buy the solar panel system at any time during the lease term at the price defined in your contract or its fair market value, whichever is higher.
• If you sell your property, you can transfer the remainder of your lease to the homebuyer or buy the system from your leasing company yourself and include it in the sale of your property.
• When your agreement ends, you can either buy the system outright, have the leasing company remove it, or leave the system in place and renew the agreement with the owner.

SOLAR LEASE AND PPA DISADVANTAGES

Disadvantages of solar lease and PPA include the following:

• You don’t own the solar PV system.
• You are not eligible to receive Federal Tax Credit.
• You are not eligible to receive any financial incentives and rebates.
• You will have to convince the next home buyer to take over your solar lease or pay off the lease before you can sell your house.
• Upon the termination of the solar lease period, the leasing company will remove your solar PV system from your roof.

DISCLAIMER

Cool Remodeling, Inc. is neither a broker nor a lender. Solar lease and PPA contracts are provided by third-party lenders unaffiliated with Cool Remodeling, Inc. under the terms and conditions arranged directly between the property owner and such lender, all subject to credit requirements and satisfactory completion of financing documents. Any financing terms and conditions are subject to change from time to time.

Cool Remodeling, Inc. does not assist with, counsel or negotiate financing, other than providing property owners an introduction to lenders.