Should You Lease Your Solar Panels? Pros and Cons for California Homeowners
Should You Lease Your Solar Panels? Pros and Cons for California Homeowners
Thinking about going solar but hesitant to take on a big upfront investment? You’re not alone. With energy costs continuing to rise and interest rates making solar loans less attractive than they used to be, more homeowners are considering solar leases as a simpler, low-commitment way to get started.
At California Solar Broker, we help you understand every option—so you can make the right decision for your home and your goals.
Here’s what to know about leasing your solar system, and whether it might make sense for you.
Why Homeowners Choose to Lease Solar Panels
A solar lease can be a smart path forward, especially if you’re looking for predictable monthly costs and zero maintenance responsibility. Here are a few reasons it’s become such a popular option:
1. No Upfront Costs
One of the biggest hurdles with solar is the initial price tag. With a lease, there’s usually no upfront payment at all. Instead of spending tens of thousands out of pocket or applying for a loan, you sign an agreement to use a solar system installed on your home—then pay a monthly fee for that access.
This structure can make solar accessible to homeowners who might not qualify for a loan or simply don’t want to take one on.
2. Fixed Monthly Payments
Think of a solar lease like a car lease: you use the system for a set period and pay the same rate each month. That stability is a major plus for budgeting—especially compared to unpredictable utility bills.
Just keep in mind that some leases include a small yearly increase (typically 1–3%). It’s not a dealbreaker, but definitely something to watch for in the fine print.
3. Immediate Savings on Power Bills
You’ll likely see savings as soon as your system is up and running. The fixed lease payment is usually lower than what you were paying your utility, especially in high-rate areas like California. While you won’t own the system (and can’t benefit from long-term equity), many homeowners value the simple monthly savings and peace of mind.
4. Guaranteed System Performance
Most solar leases include a production guarantee. That means the company installing and leasing the system agrees it will generate a certain amount of electricity each month. If it doesn’t, they’re responsible for making it right—at no cost to you.
This puts the onus on them to maintain system performance, not you.
5. No Maintenance or Repair Costs
If the inverter fails or a panel stops working, it’s not your problem. The leasing company handles all repairs and replacements. For many homeowners, that hands-off approach is one of the biggest benefits of leasing.
Some Drawbacks to Consider
While solar leases are a great fit for some, they aren’t ideal for everyone. Here are a few limitations worth understanding before signing a contract.
1. You Don’t Own the System
When you lease, the solar equipment belongs to someone else—so you won’t build equity in it, and you can’t take advantage of the full resale value solar can add to a home. Ownership has long-term benefits that leasing doesn’t offer.
Also, if you sell your home before the lease is up, the buyer will have to agree to take over the lease—or you may need to buy out the remainder.
2. You Won’t Qualify for Incentives
Federal and state programs like the 30% Investment Tax Credit (ITC) are only available to homeowners who purchase their systems. When you lease, those incentives go to the leasing company—not you. The same goes for local rebates and some net metering benefits.
3. Lower Return on Investment
Because you’re essentially renting the system, your long-term financial return will be less than if you had purchased it. Over time, homeowners who own their solar panels usually come out ahead. With a lease, you’ll get savings each month—but you’ll also be paying a company to keep using the system indefinitely.
Final Thoughts
Leasing a solar system makes sense for many homeowners—especially those who want predictable savings, no upfront cost, and zero maintenance stress. It’s a good way to lock in lower energy bills without committing to ownership.
But if long-term value and maximizing financial return are your goals, owning your system through cash or financing is the better route.
Not sure what’s right for you?
At California Solar Broker, we’ll walk you through all your options—leases, loans, cash purchases—and match you with an installer and structure that fits your goals and budget.
Let us do the heavy lifting. You focus on saving.