Oct 15, 2025
Sima and John thought they had found their dream home. It had everything they were looking for — and one feature they didn’t expect.
They were ready to make an offer, when their real estate agent looked into the solar panels on the home. That’s when they got a huge shock. The current owners of the home are locked into a 20-year lease for the panels and they are only at year five of the contract. The owners pay $500 a month for the panels, while it would cost $100,000 to buy out the contract.
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Sima and John are interested in renewable energy, but the monthly cost is a lot higher than they were expecting, even if it is their dream home. And the fact that the sellers were not upfront about the panels — they initially wrongly said they owned the panels — is setting off alarm bells for both John and Sima as well as their real estate agent. While this would be sufficient reason to move on from the property under other circumstances, the couple wants to rule out every possibility of making this work, given that this otherwise seems like their forever “dream home.”
Here is what they need to consider before making a decision.
What is a solar panel lease?
The sellers of the home signed a solar panel lease; the agreement is that the homeowners pay a monthly fee to use the panels, but the panels are owned by the company. In turn, the homeowners use the electricity generated by the panels, which decreases their electricity bills.
Solar panel leases are typically 15 to 25 years and they usually have a penalty if you terminate the lease early. The lease will also usually stipulate whether, at the end of the term, you can choose to renew it, buy the system or remove the panels.
The lease will also likely have stipulations if you sell the home. The lease for the home John and Sima are interested in states that the homeowners can either transfer the lease to the buyers, or the homeowners must buy out the lease, in this case, for $100,000. But it’s clear the homeowners have no intention to pay the $100,000 and instead want to transfer the lease to John and Sima.
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Will solar equal savings?
If Sima and John are considering purchasing the home, they should look into some specifics. They should ask the homeowners how much electricity the system produces and ask for documentation for the last year to see if the savings realistically offset the cost of the panels month-to-month and season-to-season.
They should also ask whether the homeowners have had to use electricity from the grid to supplement the solar system and, if so, what the associated monthly costs can reasonably be expected.
Some solar systems also allow for net metering, meaning any excess electricity generated is sent to the grid, in exchange for billing credits from the utility company. John and Sima should clarify if this is available under the current contract and, if so, what the savings have been.
They should be sure to review the lease closely, because payments also typically increase every year, usually from 1 to 5% annually (known as an escalator clause).
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John and Sima could search online to see if they can find out what average electricity bills in the area are, or directly speak with neighbors. Since most solar lease payments are generally $75 to $200 per month [1], the $500 a month they would be paying seems unusually high and could easily exceed the average electricity bill, depending on the size of the property.
Another factor to keep in mind is that while a homeowner who takes out a loan to purchase a solar panel system could qualify for solar incentives such as tax credits and local rebates, with a solar lease, the solar company receives those benefits — not the lease holder.
Pros and cons
The main benefit of a solar lease is that you don’t have to pay for the installation and that the solar company will also typically be responsible for any maintenance of the system.
However, this also means you’ll be relying on the solar company if any issues arise and if the company is not responsive when you have an issue, it could mean you end up paying an electricity bill in addition to a solar lease bill — for a system that isn’t working. Unfortunately, this isn’t uncommon. Many popular solar lease companies have generally negative reviews online from customers and those who report maintenance issues not being resolved, along with aggressive, predatory and misleading sales tactics.
The savings on leased solar systems are also the lowest long-term, versus a solar loan or buying a system outright.
And there is also the fact that selling a home with a solar lease is difficult, should Sima and John decide this is not their forever home after all. Buyers like these two ought to be prudent and wary of taking over such a contract (and buying a home) — especially given that the sellers haven’t been forthright and transparent from the beginning. And the panels don’t add value to your home — because you don’t own them.
The high monthly payments for the solar panel lease on this home, along with the fact that the sellers weren’t upfront about it, should be sufficient red flags for Sima and John.
If their research shows that the solar lease company is not dependable when it comes to maintenance, that the homeowners still need to spend considerably on electricity from the grid, or that the escalator fee is high, they should pass on this home, as it won’t be their “dream” with this solar lease attached.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines. Solar Reviews (1)
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Rebecca Payne has more than a decade of experience editing and producing both local and national daily newspapers. She's worked on the Toronto Star, the Globe and Mail, Metro, Canada's National Observer, the Virginian-Pilot and Daily Press.
