How to Break a Solar Panel Lease (Cancel Contract – Get Out!)

Leasing solar panels can be convenient for some people. But for others, there are times when you should seriously consider breaking your lease.

There are some important aspects of solar panel leases for you to consider. I’ll be covering these and more in this article:

• Breaking a solar panel lease
• Different forms of solar panel leasing
• Reasons for breaking your lease
• What to do instead of leasing
• Ways to Finance Ownership of Solar Panels

Your lease is written in black and white. It’s a done deal, isn’t it? Maybe not. Read on to learn more.

Woman Reading A Contract. - Sol Voltaics: Solar Panel Information
Woman Reading A Contract.

There Are Three Ways to Break a Solar Panel Lease

Buy Out Your Contract

Simply prepay the remaining amount you owe on the lease. Study your contract. Most solar panel lease agreements include a buyout price. You may have to wait to buy out until after the lease has run for 5 to 7 years.

Buy the Solar Panels

Hire a professional appraiser to determine the fair market value of your solar panels. This person will consider the age and condition of your solar panels and current market conditions for panels. Offer the company that price.

Transfer the Agreement

If you are selling your house, offer the new homeowners a transfer of the solar panel lease. Most companies will have people and systems in place to expedite such transactions.

If the new homeowners balk at your offer, reduce the selling price of your house by the amount of the transfer.

Neighbor With Solar Panels In Modern Family Houses Newly Build Modern Houses. - Sol Voltaics: Solar Panel Information
Neighbor With Solar Panels In Modern Family Houses Newly Build Modern Houses.

Three Forms of Solar Panel Leasing


A solar panel lease permits the homeowner to use solar panels for 20-25 years without incurring the expense of buying them outright. You pay the company for the energy benefits of solar panels. The company is responsible for maintenance while receiving government rebates and tax breaks.


Some companies offer homeowners a Power Purchase Agreement (PPA). The company installs solar panels on your roof, and you buy the electricity they generate at a fixed rate per kilowatt-hour. It’s like paying the power company, but the power is being generated at your home.


Tesla has instituted a short-term rental contract system with its solar panels. Tesla will install solar panels on your roof for a set monthly payment. The company will remove them quickly if solar isn’t right for you. There is no long-term contract involved.

If you’re unsure of which way to go, research different companies and their rates to determine which form of leasing fits your situation best.

Beware: If one company offers leases, another installs the panels, and a third provides the panels, make sure you research each company separately.

Find out how well they work together and who is responsible for the maintenance and repairs of all solar panels they’ve installed on your roof.

Solar Panels On A Roof Of A Timber House
Solar Panels On A Roof Of A Timber House

Reasons for Breaking Your Solar Panel Lease

Buyer’s Remorse

You may have been excited to participate in the growing movement away from carbon to solar. You believed solar was the way to go with worries about climate and energy costs.

But you realized that you couldn’t afford the steep costs of buying and installing solar panels yourself. So, you decided to lease.

You may have discovered that you were not getting the energy savings you’d expected. You may have been paying your leasing company more than your power company. You became disillusioned and wanted out of your lease.

Changing Your Mind

Before, the solar panels were installed, but after you’ve signed the contract, you’ve changed your mind. Study your contract. Many contracts have 30-day windows that will allow you to get out of the contract with no penalty.

Poor Service

The panels may have been damaged during shipment or installation and don’t work properly. Your leasing company may not be willing to do the repairs or replace the faulty panels.

You may have been stuck with sub-par solar panels. Or perhaps the climate in your area turned out to be unconducive to producing enough solar energy to make your investment pay.

Consult an attorney to learn how you can get satisfaction. You may be able to get out of your lease early, especially if other customers have expressed similar frustrations with that leasing company.

Loss of Job or Retirement

You may not be able to afford to pay your monthly fees to the leasing company anymore due to a change in your financial situation. Talk with an attorney to learn about your options.

Impending Move

You’ve got a new job elsewhere and now must move. Since you lease the solar panels, you can’t take them with you.

Or perhaps you could. Check with your leasing company to find out if you can move the panels to your new house. If not, find out if the company will allow a transfer of the lease to the new homeowner.

If the new homeowner doesn’t want the panels and you can’t use them at your new home, talk with an attorney to learn how to break the lease.

Desire to Own

You discovered the benefits of owning your solar panels, and you are now in a financial situation that will permit you to make this happen. Find out if your contract includes a buy-out provision. Your leasing company may even offer a bonus for paying off the solar panels early.

Solar Panels On A House In The Countryside
Solar Panels On A House In The Countryside

Who Should Lease Solar Panels?

People with Low Tax Liability

People who don’t owe very much in taxes may find solar tax credits unusable. Owning solar panels would not make financial sense to them.

People with Low Credit Scores

These scores may limit their options for leasing.

People with No Money for a Down Payment

Leasing companies don’t require down payments.

People Who Want to Go Solar Quickly

Solar panel leasing companies have the expertise to choose the right solar panel system and install it. Homeowners usually don’t know the ins and outs of solar and aren’t willing to put in the effort to learn. These people should lease.

How to Finance Solar Panels without Leasing

Take Out a Loan to Finance Your Purchase

Solar panels generally pay themselves off through energy savings in 10 to 12 years. If you’re locked into a 20 to a 25-year lease, you’ll lose out financially for over half of those years. You won’t receive any investment tax credits by going solar.

You’d be much better off with a loan. It’ll permit you to invest in solar power and reap the benefits of savings and tax credits.

Take Out a Fannie Mae HomeStyle Energy Mortgage

This innovative financial tool will allow you to upgrade your home to clean energy. The amount is restricted to up to 15% of your home’s appraised property value.

Take Out a PowerSaver Second Mortgage

The FHA will allow you to take out a second mortgage to finance the purchase and installation of solar panels for your home. The limit is $25,000. You may not have a second mortgage on your home to qualify.



General Solar Panel FAQ

What Problems Do Solar Panels Solve?

In environmental terms, solar panels can potentially solve a handful of problems, including;
1. Air pollution
2. Water pollution
3. Greenhouse gases
4. Reduction in fossil fuel use

For individuals, solar energy allows you to become completely self-sufficient when it comes to your electricity needs and can save you a lot of money in the long run.

What Are 3 Important Uses Of Solar Panels?

The three most important uses of solar panels are;
1. Solar electricity. This can be used to power almost any appliance in your home, including TVs, computers, and fridges.
2. Lighting. In addition to the use of low-power, LED lightbulbs, solar panels can provide an efficient, low-cost, and environmentally friendly way to provide lighting to homes. 
3. Portable solar. In our modern, always-connected lives, our phones, tablets, and computers are almost always with us, and all run on batteries. Portable PV chargers can help keep our batteries topped up no matter where we are, as long as there is some sun to charge them.

Do solar panels give you free electricity?

Once the cost of the array is paid in full, the energy it produces is free. There are ongoing maintenance costs, too, such as annual panel cleaning, etc. 

How much will my electric bill be with solar panels?

Suppose your solar array includes a solar battery backup system, and it is large enough to fully cover your energy usage per day. In that case, your monthly electric bill will be next to zero dollars, even with a grid-tied system. 

If your solar array does not include a solar battery backup system, then at night, your house or business will use grid electricity. That cost will vary but expect to pay from 1/3-2/3 of your average electric bill, and that cost will fluctuate seasonally. 

Do you save money with solar panels?

The simple answer is, Yes, you save money with solar panels. There is an initial upfront cost, but since solar panels are warrantied for 25 years, you will save money over time. You will also begin to see monthly savings in energy bills, but there are other ways that solar panels pay you back. Those include:
1. Adding value to your home or commercial building 
2. Monthly decreases in energy costs
3. The ability to add more energy appliances without increased monthly costs
4. The potential for tax credits for going solar

Can solar panels power a house 24-7?

Most definitely! Solar panels can certainly power a house 24-7, with the addition of a high-quality inverter and a suitable battery bank, of course. To power, a house under normal usage will require a massive solar array, though, and there will be a very expensive initial financial outlay.

Do I need to tell my energy supplier I have solar panels?

This depends on where you live, but in most cases, it’s not necessary to inform your energy supplier that you have solar panels. That said, you may be producing excess power with your solar system, in which case you may be able to sell that excess power back to energy companies.

In this case, you’ll naturally need to be in contact with them. 

What Are Solar Cells Known as and Why?

Solar cells are also called photovoltaic (PV) cells. They are called so because the term ‘photovoltaic’ literally means light i.e. photo and electricity i.e. voltaic.

These cells generate electricity through the photovoltaic effect. This effect basically causes the generation of free electrons from the semiconducting silicon material of the solar panel when sunlight hits its surface.

What Type of Solar Panels Are Most Efficient and Why?

There are currently three types of solar panels available in the market that are:
1. Monocrystalline
2. Polycrystalline
3. Thin-filmed

Among these, monocrystalline solar panels are known to be the most efficient among all others.

Does heat enter your home through the roof?

Absolutely. Heat enters your home through your roof, and on a hot day your attic can get up to 150 degrees Fahrenheit or more. Through conduction, heat from the sun warms your roof which then warms your attic and the rest of your home.

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