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.

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.

See also: How Does a Solar Lease Work? An Ultimate Guide to Understanding Solar Leases

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.

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

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

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.



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Elliot has 20+ years of experience in renewable technology, from conservation to efficient living. His passion is to help others achieve independent off-grid living.

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