Path-Q Solar
How does a solar lease affect the financial benefits I receive from the system?
Answer
A lease can lower or stabilize your energy cost without requiring you to buy the equipment, but you generally do not receive the system's ownership-related financial benefits. The provider typically owns the system and receives available ownership incentives, while you receive the contracted bill savings after lease payments.
Key points
- Compare projected utility savings with the lease payment, escalator, and remaining utility charges.
- Confirm who receives incentives, renewable attributes, performance payments, and equipment residual value.
- Review maintenance, monitoring, production guarantees, and what happens if the system underperforms.
- Ownership may provide more long-term upside, while a lease may reduce upfront cost and maintenance responsibility.
What it depends on
- Lease payment and escalation schedule
- Production guarantee and remedy
- Utility rates and export treatment
- Ownership of incentives and environmental attributes
- Transfer, buyout, and removal terms
Risks and trade-offs
- Escalating lease payments can consume expected savings if utility prices do not rise similarly.
- A lease may limit control over equipment and future modifications.
- Sale, refinancing, roof replacement, and contract termination can be more complicated.
Information you may need
- Complete lease agreement
- Payment schedule and total expected payments
- Production guarantee and maintenance terms
- Transfer, buyout, and removal provisions
Your next step
What to do next
Compare the lease's total payments and expected residual bills with a cash or loan purchase using the same production assumptions.
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