Enter any four of the five values (Total Lease Cost, Monthly Payment, Lease Term, Average Monthly Utility-Bill Savings, or Net Long-Term Savings) and leave one field blank to calculate it. The savings estimate is a simple (undiscounted) net-savings check and does not account for items like rate escalation, incentives, or the time value of money.

Solar Lease Calculator

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Solar Lease Formula

The following equation is used to calculate the Solar Lease Payment.

SLP = TLC / T
  • Where SLP is the solar lease payment ($/month)
  • TLC is the total lease cost ($)
  • T is the total lease term (months)

To calculate the solar lease payment, divide the total cost of the lease by the total number of months in the lease. If you also estimate your average monthly utility-bill savings, a simple (undiscounted) net-savings estimate over the lease term is: Net Long-Term Savings = (Monthly Savings × T) − TLC.

What is a Solar Lease?

Definition:

A solar lease is an agreement where a third party owns the solar equipment (panels and related components) and you make a fixed (or scheduled) monthly lease payment to use it, while you use the electricity the system produces. (By contrast, paying per kWh for the electricity produced is typically called a solar power purchase agreement, or PPA.) Leasing can help reduce upfront costs because you do not purchase the system outright.

How to Calculate a Solar Lease?

Example Problem:

The following example outlines the steps and information needed to calculate the Solar Lease Payment.

First, determine the total lease cost. In this example, the lease costs $12,000.

Next, determine the lease term in months. In this case, the lease term is 120 months (10 years).

Finally, calculate the monthly lease payment using the formula above:

SLP = TLC / T

SLP = $12,000 / 120

SLP = $100 / month

FAQ

What factors can affect the cost of a solar lease?

The total cost of a solar lease can be influenced by factors such as the size of the solar system, the efficiency of the panels, local utility rates, and potential changes in energy demand over time. Installation, monitoring, and maintenance may also be included in the lease, affecting the overall expense.

How can I reduce monthly solar lease payments?

To reduce monthly lease payments, you might opt for a longer lease term (which can lower the monthly payment but may increase the total amount paid), negotiate lower fees, or take advantage of incentives, rebates, or tax credits that your solar provider may offer or pass along to you.

Is it better to lease or buy solar panels?

Whether leasing or buying is more beneficial depends on your financial situation and long-term goals. Leasing may require little or no money down and can offer predictable payments with limited maintenance responsibilities. Purchasing panels outright can provide greater long-term savings and may increase property value, but it comes with higher upfront costs.