How Solar Leases Work
A commercial solar lease is a financing option that allows businesses to generate solar electricity with little to no upfront capital investment. Like traditional equipment leases, solar leases provide use of the solar equipment itself in exchange for a monthly lease payment. You benefit from the clean electricity generated from the rented solar installation. The combination of known lease payments and lower utility bills typically leads to an immediate reduction in electricity costs and provides increased savings over time. At the end of the lease agreement (typically 7 – 10 years), you have the option to purchase the system at a reduced cost, renew the lease, or have the system removed.
Benefits Of Solar Leases
- Little to no initial capital investment
- Protection against volatile electricity prices
- Immediate savings on electricity costs since the reduction in grid electricity bills more than offsets your monthly lease payments for the installation. Figure 4 illustrates the potential savings available under a standard SunPower solar lease agreement.
- Allows you to work with your existing equipment lease financial partners.
Key Solar Lease Considerations
Similar to a PPA, solar leases requires a detailed contract and thorough credit review. As a result, choosing a lease may extend a project’s timeline relative to other financing options. While there are many similarities between solar leases and PPAs, it may be worth exploring both options individually – the total financial benefit of each option can vary based on the needs of your facility and the specific details of your solar project.
Solar Technologies Solar Leases
Whether you want to work with your preferred financial institution or you want to explore alternatives, Solar Technologies can help you negotiate the terms of a solar lease. With an expansive network of specialized leasing partners, Solar Technologies knows how to accurately forecast energy output, secure favorable lease terms, and streamline the negotiation process to help you minimize your financial commitment while maximizing the return on your solar investment.