How to get out of a solar lease. Having solar panels on your home is a great way to save money and reduce your carbon footprint, but how do you go about getting out of your solar lease? It can definitely be a little confusing.
Let’s start at the beginning: how did you get into that solar lease in the first place? More than likely, while you were shopping around for a company to install solar panels on your roof, one of them pitched leasing as an option. You may not have known what this would entail exactly – or how it differed from purchasing the PV system outright. Now that you want out of the rest of your contract with them before it’s up, how exactly do you go about doing so?
First off, don’t expect any sort of grace period, or to be able to escape your lease easily. The terms are written very clearly in the contract you signed with them, and no matter how unfair they may seem, it’s legally binding.
You should start by figuring out how much time you have left on the lease so that you can determine how quickly you need to move to get out of it.
There is typically a pre-determined timeframe at the outset of a solar power purchase agreement or photovoltaic (PV) lease – for instance, 18 years – and if the lease has run its course there is no provision allowing early termination without payment of an expensive fee usually referred to as “early buyout cost”. Terminating your lease before its term ends will incur this cost.
After you know how much time you have left on your solar lease, the next step is to determine how much it will cost to get out of it. This monthly buyout fee may seem outrageous, but this is how the leasing company makes its money back for installing your panels. It’s based on how long you have left on your contract and how expensive the equipment was that they installed for you in the beginning. You also need to consider that their operational costs are carried by their monthly fees, so they’re not going to let you out of it unless you pay up!
So what can be done if your circumstances change? Well, several things actually:
☆ Move: If moving into a home with no roof access isn’t a problem, you can always move your solar panels to a new house. This will mean an entirely new contract for your new home, but it will get you out of the old one.
☆ Modify: Some leasing companies do allow modifications to contracts in certain circumstances. You can contact them and see if they’ll allow you to break the lease early without incurring large fees.
☆ Purchase: In some states, it is possible to purchase the solar system from the leasing company at any time with no penalty or fee attached. Simply determine how much less this would cost than continuing on with your lease and go from there! Of course, this option does require that you have enough funds in the bank to pay the difference, and the upfront purchase savings may be outweighed by how much electricity you end up purchasing from your previous leasing company while still paying on the lease.
☆ Rent: If you own a house but do not have enough money to make any of these options possible or practical, don’t give up yet! Some companies will allow you to rent their solar panels for a small monthly fee. This is a great way to take advantage of your roof space without having to worry about how exactly how it will get paid off. It’s also an excellent way to test how well they work for your home before making such a large investment in them. Once you’re happy with how everything is working out, then go ahead and buy your own system!
☆ If these options won’t work for you, you may be able to purchase out of your contract with the help of an attorney – always be sure to get referrals and check the state’s list of professional licensed attorneys before hiring anyone.
It’s important to keep in mind that no matter how frustrated you are about how much it will cost to end your lease, there is never any way around having to pay up if you sign a contract agreeing to one! So do your research beforehand and make sure you understand how long the contract is for, what the terms are, how much it’ll cost to break it early (if at all), how likely it is that they’ll allow modifications or termination without penalty, how much renting their equipment would cost and how much it would cost to buy out of your contract or how much it would cost to purchase the system upfront.
☆ Keep in mind that how long the lease runs is not necessarily how long you’re committed to using their solar panels. As stated above, some companies will allow modifications and even termination early without penalty if certain circumstances are met. Always look into how likely this is, how expensive these options are (if at all) and whether they fit into how bad you need to end your current lease. Modifying or terminating your agreement early could save you thousands of dollars!
☆ If you’re interested in how much money your home could make by using solar panels, try this solar panel cost calculator. It asks how much power your equipment would use per month and how much energy you’ll generate in the same time frame.
It will take into consideration all variables for how much sun shines in your area, how many hours of sun are optimal for your chosen system, and how much energy it will produce given those circumstances.
After doing that calculation, it will estimate how long before you can expect to break even on the initial installation fees with savings from electricity costs – the answer may surprise you! The site also provides other articles about how solar panels work, what they’re made of, and how exactly how they generate electricity. Be sure to check how much you save with solar panels when purchasing or leasing them by using this calculator!