In a solar lease, a company installs a system it owns on your roof and you pay a set monthly amount, often with a yearly escalator, for a long term. You use the power the panels produce, while the company keeps ownership, handles maintenance and claims any tax credits or incentives available to owners. Leases can make sense if you cannot use tax benefits or do not want to pay up front, but they complicate selling your home and usually save less over the term than buying. Read the escalator clause, the buyout and transfer terms and what happens at the end of the lease. State laws often give you a period to cancel after signing.
Related terms and pages
- Power purchase agreement (PPA): An agreement to buy the power from company-owned panels on your roof at a set price per kWh.
- Dealer fee: A charge a solar lender takes from the installer, usually built into a financed system's price.
- Permission to operate (PTO): The utility's written approval to switch on a grid-connected solar system.
- Lease vs. buy