A solar lease is a financing arrangement where a solar company installs panels on your roof and you pay a fixed monthly fee to use the electricity they produce. You don't own the panels — instead, you essentially rent the equipment for a term that typically lasts 20 to 25 years.
The primary advantage of a solar lease is the low barrier to entry. Most leases require little or no money down, making solar accessible to homeowners who can't afford the upfront cost of purchasing a system. Your monthly lease payment is typically lower than your previous electricity bill, so you start saving from day one.
However, there are important trade-offs to consider. Because you don't own the system, you cannot claim state tax incentives — the leasing company receives those benefits instead. Over the full lease term, you'll likely save less money compared to buying a system outright or financing with a solar loan.
Lease agreements may also include annual payment escalators of 1–3%, gradually increasing your monthly cost over time. It's important to read the fine print and understand how your payments will change.
If you sell your home during the lease period, the new buyer must either assume the lease or you'll need to buy out the remaining term. Some buyers view an existing solar lease as a benefit, while others may see it as a complication during the sale process. Always weigh the long-term financial implications before choosing a lease over ownership options.