Path-Q Solar
What financial risk does a solar lease create if the equipment underperforms?
Answer
The main risk is that lease payments may continue even when production and bill savings are below expectations. Protection depends on the contract's performance guarantee, measurement method, remedies, exclusions, and whether payments are tied to actual output.
Key points
- Distinguish a production guarantee from an equipment warranty or service promise.
- Check how production is measured and who controls the monitoring data.
- Review compensation, credits, repair deadlines, exclusions, and limits on remedies.
- Account for shading changes, outages, degradation, weather, grid interruptions, and customer-caused conditions.
What it depends on
- Lease payment schedule and escalator
- Guaranteed production level and measurement period
- Remedies for underperformance and equipment failure
- Monitoring access, maintenance obligations, and exclusions
Risks and trade-offs
- A guarantee may compensate only part of the lost savings.
- Contract exclusions can make a practical performance problem difficult to recover.
- Lease payments can remain due during disputes or while repairs are pending.
- A production guarantee does not guarantee a particular bill reduction if rates or usage change.
Information you may need
- Full lease and performance-guarantee language
- Historical or modeled production assumptions
- Monitoring and maintenance terms
- Payment obligations during outages or disputes
Your next step
What to do next
Ask the provider to quantify the remedy for several underperformance scenarios and compare it with the expected lost bill savings and continuing lease payments.
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Some details may depend on your location, installer, utility, incentives, regulations, or specific property.
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