Know How a Zero Down Solar Lease Works

By Jake Hartman | August 24th, 2020 08:52pm
Ruben is passionate about solar power and sustainability. He speaks and writes about renewable energy and contributes to the Solar blog at

Ownership and installation costs always come to mind when you decide to install solar panels to your home. In the last few years, these prices have gone down considerably.  You no longer have to break the bank to get rooftop installations.

Any homeowner or business practitioner looking for instant savings can now opt for the zero down solar lease financing option. It is, however, easy to dismiss this beneficial option as a marketing gimmick. But is this option a scam? Read on to understand how zero down policies work and what gains you can expect.


Zero Down Solar Leases

With these policies, you don't have to incur immediate costs to get your solar system installed. Once you sign an agreement with your preferred service provider, you'll have to pay a stipulated amount every month.

Ideally, the leasing company remains the owner of your solar system. This means that you won't worry about maintenance costs.  As long as you faithfully pay the monthly rates, you get to save loads of energy with the solar panels. The leasing agreement, however, entitles them to tax breaks and rebates.

You also get to decide your preferred payment system. The most significant difference with your regular electricity utility bills is the considerably lower rate. These agreements allow you to clear the lease over time. The $0 down solar lease is especially popular among homeowners.

The agreement

The amount of energy you'll receive from the solar panel often counts when you sign the agreement. Your unit's electrical production also determines how much you pay as 'rent.' In many cases, this rate is often a fraction less than the standard utility power bills (between 10 – 30% lower).

This amount may, however, increase proportionally to the increase of utility electricity rates. The increase should not exceed 3% every year.  Ideally, you won't have to dig deep into your pockets to pay the monthly requirement.

Chances that you may not clear the lease amount are close to zero. The reduced electricity utility bills should help you cover this amount. 20-year leasing terms should serve you best. You'll best appreciate the value of the lease in the long haul (the savings are impressive).

Ensure that you understand your contract. Some agreements include a buying plan for the solar panel after some years.

Purchasing a 6kw system

While solar leases have made solar panels more accessible, there is still the option of outrightly purchasing a solar system. What are the implications of buying a 6kw system?

  • The maintenance costs will squarely be on you given that you will be the sole owner of the system after the purchase.
  • You get to enjoy the 30% federal investment tax credit. You'll, however, have to wait till the next year for the financial benefits of tax credits to become apparent.
  • The total cost of purchase can do down up to 50% thanks to cash rebates. Third-parties enjoy these benefits in the solar lease plans.

The decision to buy or lease a solar panel ultimately lies on your overall financial goals. Your choice will have an impact on various factors, including:

  • Maintenance
  • Returns on investment
  • Costs
  • Financial offsets

Buying a solar panel comes with numerous tax credits and incentives that guarantee high savings. Leasing the solar panel, on the other hand, provides an easier entry into the solar industry. Besides the zero-down solar lease, you may opt for solar loans or power purchase agreements (PPAs) to save the upfront costs. With solar panels, you save up to 30% of your typical energy bills. The zero-down solar lease takes these savings a notch higher. This solution is not a public relations stunt. Contact us for more info.