Best Solar Lease and PPA – SolarCity, SunRun, Sungevity, SunPower or Real Goods Solar?

Third-party-owned solar has taken the residential market in the U.S. by storm. SunRun recently announced a growth of 80% in California in only one year.[1] Another study revealed that more than 70% of Californians who go solar prefer third-party ownership.[2] Similar numbers can be found in several other states as well.

Many companies have started offering “zero-down” payment schemes since SolarCity first introduced the ingenious financing model back in 2006. Homeowners no longer have to pay heavy upfront costs to reap the benefits of solar photovoltaic panels.

We`ll take a closer look at the five largest leasing companies in the solar industry (SolarCity, SunRun, Sungevity, SunPower and Real Goods Solar). What are their differences? The goal of this article is to help you figure out which solar provider is the best choice in your situation.


 

Let`s start with a quick overview over a few common terms:

Solar Lease

Leasing a solar system is pretty much the same as leasing a car or a TV. You pay your solar provider a monthly fee (fixed, escalating or de-escalating) to lease their solar panels.

Many companies will allow homeowners to prepay the entire lease, or part of it (down payment).

 

Power Purchase Agreement (PPA)

Power purchase agreements are almost identical to solar leases – the only difference is that you pay for the amount of power the solar panels produce, as opposed to just leasing the equipment.

What is common for both solar leases and PPAs is that most companies will take care of everything from installation to monitoring and maintenance. The duration of a solar lease/PPA is typically 10-20 years.

You might want to check out the following article for more information on the subject: Benefits of Owning (vs. Leasing) Solar Panels.

 

Benefits

Protection from rising electricity prices. Leases and PPAs provide protection against volatile electricity prices. Top tier electricity prices have increased about 5% on average every year for the last 30 years.

Sit back and relax. The five solar companies that we discuss in this article take care of everything from start-to-finish – including installation, monitoring, maintenance and repairs. You will be provided with a performance guarantee, insurance and warranty.

Save from day 1. Solar leases and PPAs are comparable to, or in most cases, cheaper than their original utility bill. Solar has really become a no-brainer for many homeowners.

 

The five solar providers offer different services:

SolarCity SunRun Sungevity SunPower RGS
Contract structure Purchase
Lease
PPA
Lease
PPA
Lease
PPA
Purchase
Lease
PPA
Purchase
PPA
Duration of lease 20 years 20 years 10-20 years 10-20 years 20 years
Brand of solar panels Sanyo
Kyocera
Suntech
Depends on installer Depends on installer SunPower SunPower
SolarWorld
Kyocera
Canadian Solar

 

None of the companies are operating in all states. SolarCity offers their services in 12 different states. SunRun has recently expanded to Australia and the Netherlands.

SolarCity SunRun Sungevity SunPower RGS
Arizona
California
Colorado
Connecticut
Delaware
Hawaii
Maryland
Massachusetts
New Hampshire
New Jersey
New York
Oregon
Pennsylvania
Rhode Island
Texas
Vermont
Washington

 

Whether or not you can finance your solar system through a lease or PPA is a function of applicable state laws and your solar provider. In New Jersey for example, SunRun only offers PPAs while SolarCity offers lease as well.

 

What are the differences between SolarCity, SunRun, Sungevity, SunPower and RGS?

SunRun and Sungevity are “financing only” companies. They have partnerships with local solar installers in the states where they operate in.

SunPower manufactures their own solar panels and also handel financing. Only authorized dealers can install SunPower solar panels.

SolarCity is the only company that takes care of both financing and installation. The company placed #10 on the World`s 50 Most Innovative Companies by Fast Company in 2012[3]:

“The key: Rather than just make panels, it is a full-service operation–designing, installing, financing, and maintaining every system. That’s how to ease new customers into an unfamiliar technology.”

 

What’s the Catch?

Solar leases and PPAs almost seem too good to be true. The solar provider is the owner of the solar system if you choose a lease or PPA, and have the right to all incentives, rebates, refunds and cash credits (including SRECs).

The bottom line is this: It is true that a cash purchase would be cheaper in the long run, but most homeowners simply can`t afford the heavy upfront costs. SolarCity, SunRun, Sungevity, SunPower and Real Goods Solar are making solar possible for more homeowners, which not only is great for the environment, but can also help you bring in a lot of savings.

One Block Off the Grid has helped thousands of homeowners spend less by going solar. Become a member to find out which leasing company is best for you. It’s 100% free:


 

References: [1] PVSolarReport, [2] PVSolarReport, [3] Fast Company.

Comments

  1. Donald belflower says

    We entered into an agreement with Sunrun,everything went fine until repairs were needed, then Sunrun started backtracking on doing the necessary repairs. We are currently experiencing problems with the monitoring system which again Sunrun refuses to repair. They claim to monitor your system but the fact is it only works part of the time.

    • Gart says

      The monitoring is a part of the system which you do not own, Sunrun does. They monitor it to insure it produces power so they can stay profitable. Your PV system can stop working tomorrow and it will not your monthly bill on a ppa or lease. Monitoring is for the leasing company not for the home/ businesses owner.

  2. Lauren says

    One thing this doesn’t mention is that the financing arrangements also make sense because they let the finance providers take advantage of tax savings that homeowners couldn’t capture themselves

  3. Peter says

    I went with SolarCity – living in MASS (which needs to be updated above) – 7 weeks into it – and very positive so far – I did a PPA – $0 is attractive – but went for the bigger bang for the buck. Wished I had looked at this sooner. I’d recommend SolarCity as they did take care of everything (design, permits, install, monitoring) – very happy so far.

  4. Ray Boggs says

    Why doesn’t this article mention $0 down FHA Title 1 solar loans. A $0 down solar loan is easier to qualify for than a lease, you don’t need any equity in your home and best of all you get to keep the 30% federal tax credit and any other applicable financial incentives, the interest on the payments is tax deductable (there’s no tax deduction with lease payments) and you’ll own your solar system for a much better return on your investment.

  5. Felipe says

    And if my solar system eventually generates more than my actual consumption?

    In a PPA, I should pay for all production?
    Could I sell the excess to the grid and get money/credits from that?
    or this power is owned by those companies? Asking also for lease

    • MIKE PURCELL says

      I live in Oregon, and we are set up to receive a credit for the extra power we create. I am working with Solar City in designing the system and my concern is that the system may generate more than we can use up. PGE has a use it or lose it arrangement each year, If you don’t use up the credit by March they donate it. I am just not sure how much power we are going to generate in the summer months and Solar City will charge me for all of it according to the PPA.

      • Lou says

        ask your consultant to pull up an existing monitoring production report from a solar system of comparable size,nearby your area.

      • Chris says

        SolarCity works with the home owner and PG&E to find out how many kilowatt hours the home owner used the previous 12 months and they design the system to produce up to 85% of the previous years usage. So the only way you would be generating energy that you wouldn’t use is if your habits change dramatically from the year before. If you think this is a likely scenario, such as you have teenagers moving who will be moving out etc, just ask them to design the system to a lower offset, like 65%. This will ensure that you won’t produce more than you use and still save great money off your bills.

  6. Butch says

    The company Verengo Solar is operating in California. They have their own installers and have a zero down PPA.

    How would you compare them to your list?

  7. Nicole says

    I received a quote from Sungevity recently and they offer only 20 year leases (with a 5 year extension, maximum). They also showed both lease and purchasing options. Their quote is very detailed: product brand, picture of prospective system, lease & purchase options, financing details, and environmental impact. All objective, although the advisor told me only the benefits of the lease, the quote showed me ALL my options with no pressure to even say yes right away.

  8. Steven Eisinger says

    I recently recieved a quote from sungevity and was told I would need to put 5,000.00 down on a 20yr. lease to lower my current monthly payment to the utilities. I could put 0 down but my monthly cost would be higher than what I am now paying. Where is the savings? They did say that I could claim the cost om my taxes, How does that work? Can it be claimed every year or just the initial cost? I don’t itemize my taxes because I do not have any med expenses at the time can it still be a tax write off filing the standard deductions?

    • Manny Ortiz says

      Steven,
      I am not sure I understand your question. You mentioned that you would put $5000 down on a lease but then you could claim the solar on your taxes. I had sungevity install a system in Dec 13 and as I understood it, I could not claim any tax rebates. The system is a lease and the only way to get the rebates is to own the system.

      Sungevity charges a lot more to purchase a system than to own it. My system was leased for about 9500 up front with no monthly payments. That same system was going to be about 16000 if I purchased. The reason sungevity can do this is they can take advantage of rebates and credits that homeowners can not. Also they can depreciate the items as assets over time.

      If you use the standard deduction you can not write off anything. You can still take credits but with the deductions it is either itemize everything or take the standard. On a side note … your morgage taxes should put you in good shape to itemize.

      Sometimes it does not provide savings to go solar. It all depends on your usage and the cost of power. My pay off is longer than most would accept, but I did it because I believe every house should have solar. This would offset power requirements on the power plants during peak hours and help keep costs down.

      I know tax season is over but I hope this helped.

  9. Christian says

    Check SolarCity, I just got a PPA, and I love it. They are super transparent, and customer focused. I think there is good reason for them doing so well

  10. Afi says

    I’ve had challenges from being denied the opportunity to have Solar panel for the mere fact that I am demi-detached to one other home.
    Also, turned down by Home Depot for new roofing for the same idiotic reason, but did find a local established roofer who did a magnificent job]. Homeowners exprience an unjustified bias when they are semi-detached. This is not row housing. Semi-detatched owners have their own roofs and separators from the neighboring home. Contractors seem to be greedy because they want the entire roof to install panels and/or are frightened of not having confidence in their installers to do quality work and not create problems for the neighboring home to complain about. Thus far, my new roof is 4yrs old and I’ve no complaints from the neighbors nor do they care if I get solar panel they are not interested in for their home. Is there any NYC installer who can do a semi-detatched home nr JFK airport without the owner being required to do an outright purchase? I’ve waited so long for green energy power.

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  13. Linda S says

    I am talking with Solar City about a PPA for solar. Will I receive a credit back from So. Calif Electric if I my solar panels produce more than I use. Have teenagers who will move out in less than 5 yrs so electricity us
    age should go down.

  14. Brandon Lea says

    Hey ladies and gentlemen I currently work for Solar City. I was originally recruited by another company to do solar. I proceeded to spend 2 months visiting multiple companies in cities across the country. I sat down and spoke with all the companies listed above. None of them are bad in any way shape or form, with that being the case the reason I went with Solar City is for two main reasons.

    1. They have the most long term promise out of all the companies with billions of dollars in backing from powerhouses such as Google and Elon Musk himself, so when 2016 comes if and only if something bad happens Solar City will have a solid foundation.

    2. They doing everything themselves, meaning nothing is outsourced in regards to work. So if you were to have an issue with something on your panels in 10 years the third party warranty company that most of these companies contract out probably wont be there VS Solar City who does everything in house.

    Regardless of the company you choose to get your power from Solar is the wave of the future and I thank you all for doing your part to help reduce the carbon foot print.

    IF YOU LIVE IN THE FOLLOWING STATES;
    ARIZONA
    CALIFORNIA
    COLORADO
    CONNECTICUT
    DELAWARE
    HAWAII
    MARYLAND
    MASSACHUSETTS
    NEVADA
    NEW JERSEY
    NEW YORK
    OREGON
    PENNSYLVANIA
    TEXAS
    WASHINGTON
    WASHINGTON DC

    are interested in a PPA/Buying panels Email me at blea@solarcity.com contact me at (239)-823-1726

  15. says

    Linda,

    I used to work for SolarCity as a sales rep in Inland Empire. I now work for a smaller local solar company. I went there because they have more options, and I get to control more of the process. If you want a competitive bid for purchase/lease/PPA, I would love to earn your business.

    SolarCity now offers a decent rate (they used to be much more expensive). If I were you, I would get the lease option merely because with the lease, any overproduction of power is your’s free. With the PPA, you have to pay more and the panels almost always over-produce. Their lease and PPA are very similar and your sales rep should be able to tell you the difference.

    You asked about the credit from the utility company. This will be the same for any solar company/system whether you own or lease; at least in CA. I know that SoCal Edison will cut you a check at the end of the year for $0.04 a kWh for what you overproduced. I recommend you call your utility provider and ask them so you get the most current information and you can ask them any of your other questions.

    If you think that your usage needs will be significantly reduced in the future, request a smaller system, you can’t re-size it if it’s a lease/PPA. Take into account though that you may get an electric car in the future and will want to charge it. You may also just set your thermostat lower because you can. Just take your best guess.

    Best of luck!

  16. Brian says

    Linda,

    Most likely you will not get any credits for not being the system owner. That is the usual case as a non-system owner. All credits and incentives go to SolarCity, thus part of the reason why they are able to bring such a lucrative offer to your door. Despite not being able to take advantage of the incentives, the fact that you have the ability to have the sun control how much electricity you have to pay for is great in and of itself.

    Further, bring your question up with your SolarCity rep and ask them to reduce the size of the system to accommodate the future reduction in consumption.

    As a solar consultant myself, I am excited that I can offer this great opportunity to others. SolarCity is a great company and you will be happy with your decision.

    Brian T. (Connecticut)

  17. Andrew says

    Don’t do it! Trust me I do this for a living it is a bad idea to have a PPA that makes too much power.

  18. Frank Collins says

    Hi, I have an Energy Efficiency firm, servicing small- to medium-size commercial & industrial clients in Massachusetts. We provide a variety of services including high efficiency lighting, HVAC, refrigeration, power factor correction, window films and more. We also offer commercial solar but are struggling to find financing for our commercial clients (Operating Leases are most preferred, then PPA, then Capital Leases) so the customers are forced to pay cash or forego solar.

    Any recommendations for finance companies who could help? Thanks!

  19. Ansie says

    I live in NJ and talked to a SunRun rep about letting them put panels on our roof. I’m not buying the system, just signing onto 20 years of them keeping it on our roof. Anyone have any experience with them? Our electric bill is about $150/month now with PSE&G. The rep estimated we’d save about $300-400/year. Any advice?

  20. Adam says

    Your statement is incorrect. If you ever have a surplus of electricity So Cal Edison will require you to buy that back and only pay’s wholesale rates. Every time you sell them credits you lose money.

  21. KKenji says

    If you have PPA, you better understand you will pay all production by solar system at end of the year. So, if you have bigger system than you need, it is wasting money.
    I recommend Lease rather than PPA.

  22. Lori says

    Im confused I thought the whole idea was to make extra power to sell back to the power company so they didn’t need to build additional power plants I have an appointment with RGS this week to see if I can get a lease on their solar panels I have friends that are going with solar city so I don’t know what I will do but I thought I would talk to both of them. Am I crazy.

  23. says

    Yes, you do sell the extra back to the city/grid and you get credit for it or at the end of the year you will get a check. However our company designs systems at 85-90% so that you are not always going over. you would pay us that 85-90% of your average and the other 10-15% to the city provider but only in their low tier. We could always add panels, so we build it a little smaller a first to see if the home changes its usage. We are always willing to ad more panels, but not so much removing them.However we could make it even smaller or bigger depending on the customer, if they know they are going to make changes in the future.

  24. says

    You would get credit or a check back from them for all your extra power. However they buy it from you at a much lower rate(wholesale price), so taking it as credit may be a better idea unless you are always producing more than you use. You may just want to design the system a little smaller(65-75%) instead of 85%, that’s if you know for sure you will be reducing your usage.

  25. johnny says

    Doesn’t Google fund a lot of solar companies? I also read that they just Gave Sunrun money as well. (150million)
    When the salesman came to my house from Solar city he was really pushy and bragged about all the money E. Musk has invested. I decided to go with Sunrun because of their 10 year roof warranty as apposed to Solar City’s 1 year and the fact that there is no cost for over production. Global warming caused my system to over produce by a good amount of KWH and it was all free. I would have paid for that if I would have gone with Solar City. I would tell everyone here to stay away from the lease program! Solar City has a hard time transferring those if you sell your home. I have done my homework and believe that you are right in the sense that it only matters that people go solar.

    JT

  26. mike says

    solar city quoted me a 18,500 kwh system for $96,000. I thought that was crazy. They all say that you are saving the planet by using them. My PPA would save me a whole 4 cents a kwh. WOW big savings to have 75 of their panels on my roof getting them rich. They still own it, they get $29,000 tax credit, in 20 years you pay them $60,000, they get srecs $59,000. they are really doing it to save the planet. All this for a system that probably cost less than $10,000 to make. I am all for solar, but it should be more affordable. I laughed so hard when they told me the purchase price.

  27. arthur says

    Hello

    We live in NYC and NRG seems to be dominating Solar market here. Does anyone have any opinions about NRG?

    Thank you

  28. Ric DeVan says

    It’s my understanding that SDG&E in SoCal will NO LONGER buy back excess power. They do, however, allow credit for energy place on the grid. The “credit” can be used when you are not generating solar power, usually at night or during heavy overcast.

    Since I’ve signed up for a PPA, I’m not sure how the “credits” will work. The system is not installed you and I am thinking of cancelling and going with ownership.

  29. Joseph says

    I am leasing my solar panels from Sungevity. Very positive experience. It was $0 downpayment, they took care of all the paperwork and provide full maintenance. My panels are producing more electricity than we are consuming. They provide a “performance guarantee”,
    so if panels produce less than promised, they write a check for the difference. They provide a free quote without a site visit, they see your roof through Google Earth. If you move, they will move the panels for free or you can transfer the lease to the new owners. They panels are fully insured, free of charge. They also provide warranty for the roof against any leaks. They do everything, I just pay my lease.
    You can go to http://www.sungevity.com You can use referral code 94755 for a $1000 discount.

  30. Jeffrey says

    Doing a lease or PPA is idiotic. You are literally paying 3 to 4 times what you would pay for a purchase over the initial term for a purchase. Also, know why the salesman for PPA or lease will never tell you what brand the panels and inverter is? Because they use standard quality equipment that will not outlast the period covered by the lease. They will use a string inverter instead of the higher end micro inverters that are based on better technology. A representative for solar city tried to talk me out of higher end panels and Enphase micro inverters because he knew his company only has standard quality equipment and could not get a good deal on higher end solar goods. The main reason why a lease is simple: Why give all the tax credits and incentives to a 3rd party and rent your roof to them? In my specific case, that would have been giving them in the neighborhood of 15k!!! After incentives, it literally takes 5 years to break even on purchase and then it’s free power for life!!

  31. Brian says

    This has a great article and blog and comments thanks.
    1. be aware that the link for “One Block Off the Grid” is no longer an un-biased solar company selection service – it was bought by NRG which is a solar company named Pure Energy. So now it only sells NRG Solar (which unfortunetly isn’t on the article’s chart of 5 other solar companies).
    2. However, after talking with the Rep at NRG, I am convinced they are a better solar provider than Solar City. As a company, they are bigger (better financial backing) and cheaper. They don’t do PPAs but the do zero down lease – which she described as better.

  32. beene says

    It seems it depends on the state you live. In Ma. the more your system produces the sooner it pays back the investment. This is of course if you own the system.

  33. Todd says

    The goal is to use solar to knock down your high marginal power rate. I have CA e vehicle rate so I pay $.39 at peak and $.09 at night. Look at your bill and it will tell you exactly what you pay at each tier. We created a system that knocks out all of our $.39 and a small part of our $.22 tier at an average of $,.18 with our solar lease. I would lose money if my system was big enough to replace our overnight rate.

    By the way, solar city bait and switched us, tried to install a larger system and played with estimated vs actual price. Went with Sungevity. Got plans and permits in a month. Much better than I expected in my highly regulated town.

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