(855) 321-7473

M-F 9am-5pm Eastern

financing or leasing solar
Money Talk

Solar Financing and Leasing Considerations

By Tobias Roberts, Rise Writer
Last Updated: Feb 19, 2025

For people who want to make the change to renewable forms of energy in order to vastly reduce their carbon footprint, but who do not have the economic means to pay outright for a complete solar panel system, there are vast arrays of financing and leasing options that will help you to do your part to combat global warming. Below, we look at the pros and cons of leasing and financing a photovoltaic system for your home. 

Table of Contents

  1. How Much Do Solar Panels Cost? 
  2. How Residential Solar Leasing Works
  3. How Residential Solar Financing Works
  4. Community Solar Options
Loading...
Loading...
Lanefab
Photo Credit: Lanefab

How Residential Solar Leasing Works

Pros of Leasing Solar Panels

Leasing a solar panel system enables you to get access to renewable energy with zero down at the time of installation. For people without a large amount of cash savings, this is often the best way to start producing renewable energy. While you will be making a monthly payment for the long term (most solar leases are between 15 and 20 years), in some cases, your monthly repayments might actually be lower than what you are saving on your utility bill. Thus, by leasing, you might be able to get renewable energy without any upfront cost while saving on your monthly bill. There are not many opportunities in our world to make a profit without any upfront investment!

If you produce more energy than you consume, you might be able to sell the excess power back to the grid. Over 40 States and all Canadian Provinces allow for net metering. This essentially means that your electricity meter will run backward during the day when your panels are producing energy. Then, at nighttime, it will reverse when you are pulling power from the grid. If you generate more than you take from the grid, then you receive credits. Your local utility company will pay you for giving back to the grid, usually at the current price of energy. This is yet another way to offset the monthly cost of leasing solar panels. 

Cons of Leasing Solar Panels

On the downside, by tying yourself into a long-term lease, you might not be able to take advantage of cheaper solar energy in the future. Solar panels are becoming less expensive, and new technological developments in the near future might make solar panels more affordable for you and your family. Also, leasing solar panels can present a challenge if you decide to sell your home. 

Solar leasing is ideal for people with limited cash, and who plan on staying in place for the long-term. It presents a unique opportunity to jump in and begin to make the transition to renewable energy. Remember to make sure that your lease contract has a buyout clause at the end of the lease. 

Pheasant Hill Homes
Photo Credit: Pheasant Hill Homes

How Residential Solar Financing Works

Pros of Financing Solar Panels

If you purchase your solar panels outright, this is an investment opportunity that will yield monthly earnings for decades. You will be the sole owner of your panels and will have the freedom to do whatever you wish with the panels. Leasing companies do make money off the monthly repayments they charge you, and they also will pocket any incentives that come with those panels. 

Cons of Financing Solar Panels

The disadvantages of financing solar panels are that you will have to come up with the money to pay for them. You will also pay for any maintenance if the system breaks down (with leasing, the owners are generally responsible for any maintenance cost). Fortunately, most banks and lending institutions will allow you to apply for a home equity line of credit (HELOC) to finance your solar panels. HELOCs allow you to secure credit through the equity in your home and thus receive a much lower interest rate. Often, the monthly payments on this type of loan might be equal or even lower than the monthly repayments on a lease. 

Thus, financing your own solar panel system is usually a good option for homeowners that have good credit and a valuable home that allows them to apply for a home equity line of credit. 

Loading...
Article By

Tobias Roberts

Tobias runs an agroecology farm and a natural building collective in the mountains of El Salvador. He specializes in earthen construction methods and uses permaculture design methods to integrate structures into the sustainability of the landscape.

Tobias Roberts