Solar Rental Guide – Should You Rent or Buy? (2021)

Solar energy is one of the most affordable renewable energy sources for businesses or homes. Nowadays, companies that supply solar products are everywhere, but homeowners are faced with the big decision – to buy solar panels and panels directly.

Solar rent is a long-term contract between a customer and a solar panel provider. For homeowners who want to meet their energy needs without high bills, but who do not have the capital to buy a system, solar rent may seem like a viable option. In this article, we will look at solar rental as a really smart investment.


What is solar rent and how does it work?

Solar rental is a financial option where customers pay a monthly fee for the panels and use the power generated by the system. But they do not own panels. It’s the same as renting a car – the idea is to provide a convenient option for those who want to go green without having to buy a solar system and reduce their electricity bills.

There are a few benefits to renting from the sun. First, it reduces the customer’s prior cost of installing panels. The use of solar rent means that the repair and maintenance of damaged panels rests with the solar company rather than with the landlord. However, because they do not own the panels, they lose incentives such as local and federal tax credits.

Typical solar rentals last for 20 years and include a monthly lease deduction that includes a monthly fee based on current market prices and energy efficiency. Many solar rental companies come with the option to purchase solar panels at the end of the lease (again, similar to a car).

Solar rent was essential in the early days of solar systems, where systems were more expensive, but as the price of solar panels decreased, the rent was not as significant as before.

How rent differs from solar power purchase agreement (PPA)

In many ways, solar rent offers a competitive option compared to a solar power purchase agreement (PPA). You pay a monthly rent for panels for solar rental customers; At PPA, customers pay instead for kilowatt-hours (kWh). In other words, the amount that customers pay for solar rent depends on the capacity of the panels, and solar panels are paid based on the actual generation. This difference means that people with solar rent will have a more stable price, will benefit more in the summer and will save more in the long run than reduced energy bills.

Both solar rental and solar panels are contracts where the customer does not actually own solar panels, but they do distinguish between costs, reliability, savings and so on and require an individual building owner’s estimate.

Common terms of solar lease

Solar leases are crucial to understanding whether the right path is for you. Depending on individual requirements, solar rental companies can offer a variety of lease terms, from short to long. Typically, solar rent lasts 20 to 25 years. As solar panels have an average lifespan of 25 to 30 years, customers will be able to take full advantage of solar opportunities for the rest of their lives.

Various solar rental companies offer opportunities for advanced services, including monitoring, payment and monitoring through mobile and web applications. Included in these digital offerings are online portals where customers can review their contracts, pay monthly bills and review usage over time. As with the wider consumer sector, solar customers are looking for companies with improved service and customizable solutions, all offering a better user experience.

Customers should be aware that due to congested electricity costs, typically solar energy rental requires 1 to 5% of the annual fee. Although these terms are clearly stated in the contract, they should not come as a surprise.

Finishing your solar rental

Customers who choose to rent solar panels may be in a situation where they want to terminate their lease, for example if they move to a new home. Solar rental companies try to simplify this process as much as possible, offering the option of transferring the lease to new landlords or terminating the lease and removing panels.

Even if you do not break your lease before, it will eventually end. When this happens, customers can renew the same lease or terminate the lease. In the latter case, the solar company will download and remove the panels. The latter option allows customers to purchase solar panels at a discounted price (primarily in the solar lease, sometimes specified in the contract).

Is solar rental right for you?

The decision to rent a solar panel, buy full solar panels, participate in a PPA, or simply ignore the sun as an option is a very personal and big decision. To help you make such decisions, here are a few pros and cons of solar rent:

The benefits of solar rental

Solar renting has many natural benefits, including:

  • There is no need to pay high advance costs for solar panel installation
  • Locks for future energy prices when the market is volatile
  • Eliminate equipment maintenance and monitoring headaches
  • Significant utility savings
  • Family carbon footprint is reduced
  • If the panel does not work as intended in the terms of the solar lease, you can reduce the risk and reduce the charges.

The harms of solar rental

Although these terms may come with some degree of risk and stress, solar rent is certainly not for everyone.

  • As utility prices increase, the lease price increases each year and may reduce the expected cost benefits.
  • Because you do not own solar panels, you are not entitled to federal solar tax credit or environmental benefits.
  • Although there may not be a high price tag, you may be able to pay more than you can afford to buy solar panels directly at the age of the system.
  • Leased solar panels do not add value to your property as you do, because they are not part of your property.
  • Breaking your lease can be a problem if you want to move.

Rental Solar Panels Vs. Buying solar panels

Older solar panels were expensive, so renting them out was a clearer choice. But as the price of solar panels has decreased over the past few decades, it has changed that calculation and made it more accessible and profitable to take control of your own solar system.

The main difference between renting solar panels and buying solar panels comes down to ownership. If you buy a solar system, you own it, and that means you are responsible for maintenance and operation costs. If you rent a solar panel, however, the company that offers you this option is the real owner and must carry the load.

Buying a solar panel is the best option when you want to make the most of your potential financial benefits. These economic benefits add to government tax cuts through investment credit, government discounts (sometimes up to 30%) and solar renewable credit. Ownership of solar panels also increases the market value of a property. Therefore, while solar rent may be profitable during the contract period, customers who are able to purchase systems directly will benefit more financially.

However, solar rental is the best option when you want to use solar panel power as a clean source of energy. Even if you do not own the panels and are not entitled to any tax benefits from the state, you can still enjoy the financial benefits of solar energy without significant installation costs, always the risk of repairs and additional damage.

When buying solar panels, if you do not have the money to pay in advance, top solar companies offer more options for financing than just opting for solar options:

  • Financial support through solar installation; Many lenders partner with lenders to provide low-cost solar financing to their customers.
  • Getting a PACE loan – Also known as R-PACE Loans, Real Estate Rated Energy Loans are long-term, low-cost options to support your solar purchase. This type of loan connects the cost of the panels to your property tax account through a special tax assessment.
  • Getting a regular bank loan; Solar loans can be secured through credit unions, banks, utilities or state programs. In some cases, you can choose to pay with your utility provider your monthly electricity bill on credit. With this option, a portion of your monthly utility savings may be included in your loan repayment.

If you would like to see how much solar panels are purchased for your home, you can fill out the form below and get a free quote from your nearest major supplier.

Frequently Asked Questions – Solar rental

What is solar rent?

Solar rent is a long-term (usually 20-year) contract that allows a company to install solar systems on your roof without purchasing the system. They pay monthly fees and annual increases in lieu of energy generated by these panels.

Is solar rental worth it?

Solar rent can be expensive for those who do not want to have solar panels or want to move every five to 10 years. Solar bidding may also seem useful to customers who cannot afford to pay in advance. However, there are significant financial failures, including ineligibility for 26% federal solar tax credit.

Why is renting a sunny idea a bad idea?

Monthly payments for solar rent increase by more than a year due to inflation. As a result, if you buy solar panels directly, you will pay the equivalent or more. Leased solar panels do not add value to your property, and cancellation can be a problem if you are trying to sell your home before the end of the lease. In addition, because you do not own the panels, you are not entitled to any financial incentives or tax deductions.

What happens after the lease is terminated?

Solar leases tend to last up to 20 to 25 years, which is the average lifespan of solar panels. Once your lease is completed, you have the option to renew, terminate the services and remove the panels or purchase the panels from the solar supplier at a discounted price.

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