A solar panel lease works similarly to other leases: the homeowner rents a PV system from the system owner for a monthly fee. If the local utility has a net metering system, the homeowner receives any credit for electricity fed into the grid.
This arrangement is in contrast to a solar PPA, where the homeowner only pays for the electricity used and the system owner receives credits from energy fed into the grid.
A solar lease usually lasts for at least five years. Some solar leasing arrangements have a purchase option at the end of the lease period.
Solar leasing avoids the high initial costs of buying and installing a system. Furthermore, many solar lease packages include operation and maintenance services. This option also lessens the cost and the inconvenience for homeowners interested in going solar.
