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Types of solar panel financing.

Solar Lease vs Solar PPA

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A solar lease and a solar PPA are common terms that are used interchangeably in solar panel financing although how do you tell which one is the best fit for you? To answer this question let’s see how these terms differ and how one can use solar energy calculators from EnergySage or Geostellar to decide their best fit type of solar panel financing.

Solar lease and solar PPA operate in a similar manner because they both refer to solar panel financing modalities with the aim to help individuals or businesses go solar with zero or no money down. They are also similar because they both involve a solar consumer entering into a lease agreement with a solar provider for a specified period of time.

Also, both of these solar panel financing arrangements involve solar providers sourcing for financing investors to help solar consumers that may not be able to afford going solar with cash or loan options.

Cash and loan options may involve high upfront costs, but in the long-term help solar consumers to save more money from the installed solar power system that takes place mainly on their rooftop. However, a solar lease or solar PPA even though it may not save you huge savings compared to other solar panel financing options; they are accessible to most consumers that may not want to enter into debt to go solar.

So, how does a solar lease or solar PPA differ?

Even though a solar lease or solar PPA may appear very similar and these words are used interchangeably, they are actually two different concepts when it comes to solar panel financing. As a result, if you are a solar considerer and you are interested in going solar you might want to review these two terms so that you can decide about solar without confusing these terms. Is solar worth it?  is an interesting aspect of going solar that you want to determine first before knowing what type of solar panel financing is best for you. 

In a solar lease, it involves “renting” the solar equipment (solar panels) that is used to harvest solar energy which in return produces solar power that a solar consumer enjoys for a specified period of time as agreed in a solar agreement that is signed between the solar consumer and the solar provider.

The idea behind this concept is again to help solar consumers go solar with a less financial burden and still enjoy the benefits of switching to solar, including but not limited to saving energy, reducing your carbon footprint, reducing your energy bill and saving the environment from climate change for future generations. In a solar lease, just like in solar PPA, a solar consumer pays a monthly fee that is actually “rent or a lease amount” which could be slightly lower or equal to their current electric bill.

While a solar PPA seems similar to a solar lease, it is different because, in a solar PPA agreement, a solar consumer does not “rent” the solar equipment (solar panels), but actually pays for the electricity generated by the solar panels that are installed in their rooftop by the solar provider. In this arrangement, a solar consumer agrees to pay a fixed or a variable rate based on the amount of power consumed (kWh) by them and it is also for a specified period of time.

As a noted earlier, both these types of solar panel financing arrangements compared to buying solar panels in cash or loan option even though are the least expensive options of going solar involving no money down; they may not be the best options for solar consumers that are looking to maximize their solar savings to reduce greatly their utility bills, for example by 50% to 75%.

Instead, solar consumers exploring solar lease or solar PPA as their solar panel financing options can expect to save anywhere between 10% to 30%, because in these financing options a solar consumer does not own the solar panels installed on their rooftop. In a solar lease or a solar PPA, solar investors own the installed solar panels to get a return on investment (ROI) when a solar consumer goes solar using their equipment.

So, what is the best option for a solar lease or solar PPA?

This depends on what state you live in because some states have not approved these types of solar panel financing. Therefore, depending on where you live, how much you want to save with solar, the lease agreement best fits for you may be influenced by such factors.

To help you make this decision you can use this solar panel calculator to help you compare the different solar panel financing options available to you with a click of the mouse. These solar energy platforms provide solar consumers with a one-stop place of information to compare and contrast different solar prices or rates. With such information easily available, one can decide what are the best solar panel financing options available to them.

Get started today with either EnergySage which are the most well known online solar marketplaces in the country that provide online users with credible solar information. In case you want to contact us, please don’t hesitate you can reach us at or you can just comment below here and will get back to you as soon as possible.

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