With fixed monthly payments customers’ know exactly how much to budget for the solar power system. At the end of the lease term (typically 8-10 years), the customer owns the solar facility. A solar lease allows businesses to generate solar electricity with little to no upfront capital investment. Like traditional equipment leases, solar leases provide use of the solar equipment itself in exchange for a monthly lease payment. You benefit from the clean solar electricity generated from the rented solar installation. We have financial institutions that offer tax leases and operating leases with no initial down payment.
The combination of known lease payments and lower utility bills typically leads to an immediate reduction in electricity costs and provides increased savings over time. At the end of the lease agreement (typically after 8 – 10 years), you have the option to purchase the system at a reduced cost, renew the lease, or have the system removed.
A Solar Lease (also known as a Sale Leaseback), is a transaction wherein an investor buys solar electric panels and installs them on a property they don’t own and then leases the solar panels back from the original property owner. The purpose of the leaseback is to free up the original property owner’s capital while allowing the investor to retain possession and allow the property owner use of the solar panels.
A leaseback can be beneficial for the property owner and investor alike. The investor attains a lump sum of cash quickly in state and federal financial incentives and the property owner acquires a high quality solar electric installation, along with a long-term lease.
Some leaseback arrangements allow the investor, or current lessee, the option to buy back the property at a future date. During the life of the leaseback, however, the property owner derives tax benefits from the arrangement, such as being credited for depreciation of the property. If the property owner exercises the option of buying the property back, all rights will revert to the property owner upon closing the transaction, so setting the sale for the end of the tax year is a convenient way to keep things straight for the Internal Revenue Service.