Comprehensive Representation In The Field Of Energy Law

Is a solar lease a viable option for Texas property owners?

On Behalf of | Jan 19, 2025 | Solar Energy |

Property owners in Texas may not want to rely on the local electrical grid for all of their energy needs. They may also like the idea of generating money by producing electricity on their property. Solar electric systems are an excellent means of taking natural resources and converting them into cost savings or income.

However, the installation of solar panels can be incredibly expensive. People invest tens of thousands of dollars in solar arrays and battery systems. It can take many years to recoup that investment. The upfront costs of solar electrical production determine people who may be in ideal locations for solar energy production.

Is a solar lease a viable alternative to directly purchasing solar systems?

Solar leases come with benefits and drawbacks

A solar lease differs from a traditional solar energy system because the property owner does not directly purchase the solar panels operating on their property. Instead, they sign a lease with a company that installs solar panels on their property.

The company pays for the panels and maintains them. The homeowners agree to purchase electricity from that company. Homeowners benefit by eliminating upfront costs and maintenance responsibilities. The company benefits from having a locked-in consumer who commits to monthly payments. The company offering the solar lease can also sell any excess electricity generated back to local electric companies.

Provided that the lease does not contain any hidden, unsavory terms, a solar lease can be mutually beneficial. However, there are some drawbacks to these arrangements. The homeowner doesn’t profit from excess electrical generation in many cases. If the leasing company fails, the property owner may be left with solar panels that they cannot remove and that may cease working at any point.

In some cases, solar leases with unfavorable contract terms can also make it much more difficult for homeowners to sell their properties to others in the future. Solar leases therefore require in-depth review to ensure that they do not put property owners at a disadvantage or in a situation where they may not be able to move should they need to in the future.

Reviewing the terms of a solar energy lease with someone who can understand the complex jargon of such documents can help homeowners evaluate whether a particular opportunity is right for them or not. Depending on the terms of a lease and other key factors, solar leases can sometimes be a smart move for homeowners who want to limit their energy costs.

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