Solar Power Buying vs. Leasing: Everything you wanted to know and then some!

NOT sponsored.  Just sharing what I’ve learned.  I’d love a few referrals, but that’s a bonus offered to all customers, not just me because I have a blog.

solar buying vs leasing

Alrighty then.  You ready?

(If you haven’t already, I would highly recommend that you read this post where I explain how residential solar power works.  Not in a science-y technology way, but in the way that it affects you and your money.)

As I mentioned in the last post, we met with Solar City and Sun Run back to back on the same day.  While it wasn’t my most exhilarating afternoon, I will admit that it was worth every minute.  We were able to really learn in depth the differences and make a fully informed decision.  You may have different companies in your area, but I would bet that the basic premise is similar.

In both cases, we looked at our existing average electrical usage, and knew that we wanted to design a system that would produce at least 25% more than what we are using now.  Why so much more?  Our kids are really young right now (7, 5, 5, & 2), and the fact is that as they get older, they will use more energy (more devices to charge, spending more time in their rooms, staying up later, etc.) so we wanted to be sure that the system we put in would handle their growth.  We also wanted to include enough to add a hot tub (stop judging me), and Andy really wants to look into an electric car.  “Free gas” and such.  It wasn’t much more to build a system to accommodate those things and it could make a world of difference overall.


Solar City offers outright purchase of solar panels, which is what most of us think of when we think of putting solar on our homes.  Now, yes…you can write a check and pay for your panels in full, all in one fowl swoop.  You write them a check for $20,000 (or whatever your system cost is), and you get free solar energy from there on out.  No payments.  No bills.  Free fifty free.  (Unless you need extra power from the Power Company, as I explained here.)

Thing is, most people can’t (nor do they want) to write a fat check like that.  Solar City understands this, and offers a 30 year loan period.  Paying off your loan is built right into your solar bill, so it’s really really affordable and easy.

Some things to know:

-You’ll pay interest on this 30 year loan (in our case, it was ~4%).

-Solar City also charges a 2.9% yearly energy increase in your rate.

-You can pay down your loan faster if you’d like, with no pre-payment penalties.

-Solar City maintains your system for the entire 30 years…even if you pay it off early.   This includes replacing your inverter if needed (which generally costs $2,000 – $3,000) (The inverter is the box thingy on the side of the house.  It looks like your electrical panel box…only fancier.)

So, for example: our average electric bill with our power company is about $150.  Our bill (including paying back the loan), would start out at about $69/month the first year.  Once you start adding in the 2.9% rate increase, it went up a bit every year, and if I remember correctly, it topped out at about $140/month in the later years (25+ years).

Keep in mind that the system we would have installed would have been larger, AND even at the highest rate of $140/month, that’s still cheaper than we spend now for less…and that’s before any power company increases that run much higher.  (If you remember from this post, at a 7% increase, we would be paying $450/month for our same amount of power from the Power Company by about year 30.)

Wait.  Why do I have to buy power from Solar City even though I just took out a 30 year loan and am paying it back?

The simple answer is that until you make that very last payment and pay the system off in full, it doesn’t belong to you.  If you’ve ever financed a car, you know that you don’t get that car title until AFTER you’ve paid off the car.  During that time, sure, you get to use the car, but ultimately it is owned by Toyota Motor Corp. (or whoever). A similar thing happens here: it’s not your system until it’s paid off entirely.  They let you buy power from them at a super crazy low rate (think: 7 cents per Kwh…with no tiering), while you are paying down your loan.  It’s all rolled into one sum, so all you have to do it pay your energy bill like normal.  The loan gets paid, and your energy gets paid simultaneously.

So will I ever get free power?

Yes.  Once your loan is paid in full, you won’t be billed.  It’s your system.  You own it.  You are producing the power.  Unless you need to buy some from the power company because you went over, you won’t pay a soul for electricity.  It’s just up to you and how fast you want to pay down your loan.  But at most, 30 years.  In the meantime, it’s still a cheaper payment than you’ll ever pay with your local Power Company.

Why am I doing this again?

Because even with paying an APR and the 2.9% rate increase, you will still be paying less than whatever you are paying now.  And eventually, you’ll own the system.  There really is no downside to this.  Also, doing your part to save the environment, if that’s your gig.

Isn’t there a tax credit for buying solar?

Yes.  Currently you will receive a tax credit for a full 30% of the cost of your system.  In the case of a $20,000 system, that’s $6,000.  Solar City assumes that you will hand over that full amount to them upon receipt and apply it to your loan.

What if I want to keep the tax credit?

You can.  But every number they’ve shown you for what your monthly rate is assumes you have given them the tax credit at the second year.  If you want to keep it (or it got eaten up because you owed taxes), your payments will be higher than projected at your initial meeting.

Wait.  What if I move?

The loan and system is fully transferable to the new owners.

Anything else I should know?

Solar City also offers a $250 referral fee.  If you convince any friends or relatives to go solar with them, you will get a $250 check.  And that’s over the full 30 year agreement.

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Our next meeting was with Sun Run.  They also offer a straight buy out of the panels like Solar City, but they don’t talk about it much.  Their signature product is leasing.

In the case of leasing, you do not slowly pay back a loan.  Instead, you lease the system and pay one flat, guaranteed, locked in for 20 years rate.

All maintenance, monitoring, and liability is taken on by Sun Run.

So, in our case: as I mentioned, our average electric bill is currently $150/month.  We designed a system that would produce at least 25% more power than what we currently use.  Our solar bill is now $102/month…every month…for 20 years.

But that’s not that much savings per month.  And then you don’t even own it at the end?

You’re right.  It’s “only” $48 per month.  But remember, we purposely wanted a bigger system than we needed now to take into account kids getting older, and a few extras we might want to add in (hot tub/electric  car).  We could have gotten that monthly rate even lower if we kept the solar system closer to our actual current usage (which is something you would do if you were older/empty nester).  And also keep in mind that this $102 never changes.  No rate increases like we will be guaranteed to see with our regular Power Company.  So no matter how you slice it, we’re getting more power for less.  All around.

But what happens after the 20 years?

Once your 20 year lease agreement is over, you have three options:

1) Say Thank You Very Much, now I want to go back to the regular Power Company.  (said no one ever)  Sun Run comes over, takes down your panels, fixes your roof, and drives off into the sunset.

2) Say Hey That Was Cool!  I want to sign up for another 20 years with you!  Give me the latest technology!

3) Buy the panels from them at that point*.

*Remember, these are not brand new panels anymore.  Now they are 20 YEAR OLD PANELS.  The same way you can buy a brand new Honda Civic off the lot for $20.000…you can also buy a 20 year old Civic for just a couple thousand dollars.  And let’s not forget…it will cost Sun Run a chunk of change to come get them, fix your roof, and haul them away.  I don’t have a crystal ball, but I have a suspicion you’ll have plenty of negotiating room on determining that buy out cost.

Do I still get the tax credit?

Nope.  You’re not the one buying the panels, remember?

So why do this instead of buy them outright?

The honest answer is: it’s cheaper overall and it’s just plain simpler.  We had just bought this house, and I think I was still having serious loan PTSD after the escrow process.  The thought of carrying a 30 year loan, having that on our credit report, feeling like we should pay it down sooner (I hate carrying loans), etc. just seemed like a lot of work.

Plus, I had my engineer husband run the numbers over the long haul.  Pulling a loan and paying it off over the full 30 years would result in our system costing ~$34,700.  20 years of lease payments of $102 with Sun Run is ~$25,000.  If you add another $2,000 to that total (a conservative price for buying the 20 year old panels at the end of the lease agreement), it’s still $8,000 LESS to do the lease and still own the panels at the end.  (On the other hand, Solar City maintains for 30 years…Sun Run for 20…so there’s a 10 year span where you could potentially see some expenses in the form of a new inverter, etc.)  Buying panels is only cheaper than leasing if you pay off the loan sooner (like by year 5).

Plus, to be honest, the Sun Run rep was way more personable and we just plain liked them better.  We signed our name in three places and the whole thing was done. AND SPENT NOT ONE SINGLE RED CENT.  Zero.  Donut.  Nada.

Another potential issue is that with solar power becoming more mainstream, there has been discussion that the federal government may remove (or lower) the tax incentive.  While no one has any way of knowing, IF they were to significantly lower the percentage, the cost to purchase would actually be even higher.  Maybe that’s not an issue.  But it’s something to consider.

Also, we will more than likely buy the system from them at the end of the lease period.  Which means we won’t have an electric bill in 20 years instead of in 30 years.

(Personally, we also liked the idea that depending on the way the solar technology changes in 20 years, we could conceivably re-up with Sun Run and get the latest and greatest.  Solar energy technology hasn’t changed a ton in recent years, but who knows?  Maybe it will be that instead of the large panels we need now, they can get the same thing out of tiny iPhone sized panels?  Maybe that would be a cool upgrade to get and just re-sign up again?  Maybe not.  But I kinda like the idea of having that as an option because who knows what’s gonna happen in 20 years?!  If we buy panels now, we pay them off in 30 years and don’t have the option to upgrade unless we want to start all over.)

Wait.  What if I move?

The lease is fully transferable to the new owner.  And Sun Run specifically pointed out that they would bear the burden of educating realtors and buyers.  (Solar City may do the same thing…but he didn’t mention it.)

Anything else I should know?


The incentives that Sun Run offers are AMAZING.  Sun Run works closely with Costco, so much of your incentives come in the form of a Costco giftcard.  This works just fine for our family of 6, plus they sell everything from diamonds to caskets.  And if you know anything at all about the rigorous process Costco puts partner companies through, that should tell you something about the quality of Sun Run.

-You get a $500 sign up bonus (in the form of a Costco gift card) if you sign the contract within 7 days of meeting with your rep

-You also get a one year Costco Executive Membership ($110 value)

-They will apply the full cost of your solar system to your Executive Membership.  The Executive Membership gives you 2% cash back on your purchases…so you’ll get credit to your account as if you spent $20,000 at Costco!  (I’m using $20,000 because it’s a nice even number.  It’s whatever your system cost.  Which could be higher/lower.)

-If you refer someone else to Sun Run and they sign a contract, you will get a $700 Costco card!!!!  And this is over the full 20 years with no maximums.  You have plenty of time to refer people!

-If you refer someone else, THEY also get a $300 referral bonus.

For example, you convince your next door neighbor to go solar with Sun Run: You get a $700 bonus, and they get $800 ($500 for signing up and an extra $300 because they were referred!).

Ohhhhh, I see.  You’re doing all this so you can get those referral credits!

I mean, OBVS.

But truly: I talk about a million things on this blog whether I gain from them or not.  And honestly, regardless of referrals or otherwise, I  cannot think of a reason you wouldn’t do this if you could.  In either scenario.  Whether you buy or lease, IT’S STILL CHEAPER THAN STAYING WITH THE STATUS QUO and it’s nicer to the planet.

Sun Run or not, I really hope you look into solar energy.  As long as your roof can support a system and you have the right sun exposure, there’s really no downside to this thing.  I’m a fan of Good Things.  Even if you go with a different company.  Really.

Another thing I couldn’t help but think of: in 20-30 years, we will be in our retirement years when incomes may be tighter.  The idea of setting ourselves up now to have no electricity bill in our “golden years” seems like a really really good idea.  And we save money in the meantime.

 I don’t know you from Adam.  I just googled and this came up.  I’m not dropping your name.  Pshaw.

Listen.  If you really do end up calling Sun Run and signing up, it would behoove you (and me!) to say “Jeannett Gibson in California is the one who referred me”.  If you’d rather not get an extra $300 in your pocket, I suppose that’s fine too.   (And P.S., you can start banking those referrals after you sign up too.  So go for it!)

Sun Run is in 12 states: check here to see if you are in their area.  If you’re at all curious, I would HIGHLY encourage you to call Sun Run and just set up an appointment at 1-855-478-6786.  It’s an hour of your life, and it might just convince you to make the switch.  If not, I mean, it’s an hour.  Who hasn’t spent that watching cat videos?

Tell ’em I sent you.  ;)





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I'm a mom to four. A wife to one. I believe in story. I love telling you about mine and would love to hear yours. There's really no sense in wasting our suffering and not sharing in each other's joy. We're all in this together...even if it doesn't always feel like it.

Latest posts by jeannett (see all)


  1. 1

    I’ve very interested in learning about this and so appreciate you taking the time to lay it out, in plain English. I was bummed that SunRun didn’t have a presence in my state (Alabama. It doesn’t surprise me. We’re not the most forward thinking state), but I’m going to see what other companies I can find. Just so you know, I would have totally given you the referral credit.

    • 2

      Ha! Well, thanks. It’s the thought that counts, right? Okay not in this case. But still.

      Glad you are looking into it either way. It’s such a smart move for homeowners!

  2. 3

    Awesome! Thanks for the info. I love it when someone else does the research and shares in a mom minded kind of way. I am in MN so a no go for this company but signed up for updates from them.

    • 4
      josh Erdman says:

      Another local solar business is Solar City. Did you hear anything about them or have a reason why you ruled them put as a candidate?

      We will prolly do solar, but need to replace the roof first.

      • 5

        We met with Solar City and Sun Run on the same day. All of the buying solar information is specifically from Solar City. The leasing info is specific to Sun Run. If you read the post again, I explained in detail why we chose leasing…which was exclusive to Sun Run. Solar City only offers buy out. :)

        • 6
          Joshua Erdman says:

          Thanks Jeanette. I’m embarrassed. I clearly missed you mentioning Solar City. I was thinking of REC Solar, but of course REC Solar is Sun Run now.

          • 7

            Don’t be embarrassed. I skim articles all the time. Too much information being thrown at us all the time. But yes, REC is now Sun Run. Both local companies were great, but we decided on SR. Either way is still cheaper than sticking with PGE. Do it!

  3. 8

    I was so going to call Sun Run, but they aren’t in my state yet. :( We are almost surrounded though so maybe soon? Thanks so much for this post, I really want to look into options that might be available in my area now.

  4. 9

    Interesting stuff! Thanks for explaining all this info. in layman’s terms. Vivint is another big solar company. Did you have any interaction with them?

    • 10

      I didn’t specifically chat with them, but I have heard of them. I would imagine they have a loan program similar to Solar City. I think at this point, few companies really expect you to shell out in one lump sum. Although I do think that the leasing option is specific to Sun Run…at least so far.

  5. 11
    Gwendolyn T says:

    I totally don’t watch cat videos, ever. Hah. Thanks for posting this though because I always naturally assumed that leasing was an inferior option to buying outright. I honestly thunk I will give them a call. Just later, when my kids aren’t crazy.

  6. 12
    Gwendolyn T says:

    Clearly I should read what I type before I send it. Anyhow I totally called and made an appointment for Monday (my husband is not necessarily for solar, but I always have been). However I do have a question that maybe you can answer. Are you still entitled to credits from the electricity company, or would Sun Run keep those?

    • 13

      I’m not 100% sure what you are referring to…but if you mean credits as in “tax credits”….no, Sun Run gets those because they are the ones actually buying the system. If you mean, when the electric company is buying excess energy from your solar system..than yes, YOU get that money. And you totally need to make sure Hubs is at the meeting with you and the person…I’d be shocked if he didn’t change his mind! Keep me in the loop…I’m totally curious!