Owning VS. Leasing Solar on Your Home

Owning VS. Leasing Solar on Your Home


With rooftop solar on a home, homeowners have two main options.

The homeowner can decide to own the system outright where they pay cash or have a loan to pay off the system over years. Solar companies also offer a program called "solar leasing", where the homeowner allows panels to be installed and pays to use the power from those panels without the burden of paying and servicing the equipment.

You might ask "Why would you want to pay for the energy from panels without owning them?" With panels you own, you pay on the system until it is paid off and then you can hypothetically have free or reduced power bills from the energy being offset but the cost of equipment is not inexpensive. With the loan option, you will always pay, but your power bill will be locked in at a fixed rate and you will never be burdened with the increased rates posed by power companies.

To lease power, you will be signing a "solar lease". The official name is a Power Purchase Agreement, or PPA. This means that you are leasing the power from the solar company that owns that system, and they are responsible for it.

Here in North Carolina, we have the largest utility in the country, Duke Power. The rates have doubled for electricity since 2000 and are expected to double again in the next 20 years. Duke requested to raise rates by 12% in 2019 alone! A lot of this was attributed to their mishandling of coal ash and having to clean it up.

Locking in rates sounds pretty good when you consider these facts.

I used to sell residential solar to homeowners and one thing that made solar a hard sell is the increasing rates folks are moving. We operated on the "own your solar" model and we could show homeowners what they would save over time, but if your system payback period was ten years and the millennial couple was moving in 5, it did not make sense. 

These demographic trends are only speeding up among working age people as they have to "remain fluid" and go where the job markets are booming. People are holding jobs for shorter and shorter periods and they may pick up and move on a whim. 

In my opinion, "Solar to own" models work best for older, more settled people who are established and know they will not be moving around. Then they can take advantage of paying off their systems and then having free to discounted energy bills.

For younger and more mobile folks, the leasing model allows people to take advantage of locking in better electricity rates and knowing they are using and benefiting from clean, renewable energy. With the loan option, you can move and not have to worry about the panels. They will not be an issue for the next homeowner who can simply opt in or opt out. The solar company can just come retrieve their equipment if they need to.

It is a bit more complicated if you are the one that owns them. If you find a buyer that is enthusiastic about solar, it should add value to your home, but if they are not pumped, then you might have an issue. Most people especially today would not object to "inheriting" a free paid off solar system that is reducing their electric bills, but if you took out a loan, this is where it gets tricky. You need to find a buyer that wants to take on that loan or you need to pay it down before selling. 

Homeowners aren't usually giddy about taking on a loan in addition to a home purchase and you better hope that solar company had a really transparent contract!


My thinking is buy what you can reasonably pay for, or lease. This reduces a lot of headache for you in the future. 

Sadly, there are bad practices in the solar industry as with any industry so don't let emotional words like green, sustainability, and renewable get you tricked into something that screws you.

I love solar and I want it to thrive as do the good players in this field, but there are snake oil salesmen. So do your due diligence, and know what you are signing before you put your John Hancock on that dotted line. Got to a good website for reviews like solarreviews.com to look up companies you might be considering.

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