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Find out the cost of solar for your home Learn more
Find out the cost of solar for your home Learn more

How Does Solar Panel Billing Work?

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how does solar panel billing work

Solar Lease and PPA Bills Explained

Leasing solar equipment allows you to receive the financial benefits of solar energy without having to buy a home solar system. A solar provider handles the installation, and then leases the equipment to you at a fixed monthly amount or sells you the electricity the panels generate at a set price per kilowatt-hour.1 Over two to three decades, average electric bill savings can amount to thousands of dollars.3

Solar leases typically last  20 to 25 years. During that period, your solar provider will carefully monitor your system’s hardware and performance until the term ends.2 Like leasing a vehicle, you then have the option to renew your agreement or purchase the system. If you choose not to renew, the solar provider will often remove the panels and restore your roof to its original condition at no additional charge.

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Differences Between Solar Lease and PPA Billing

Households that choose to rent solar equipment have two primary choices: solar lease billing and power purchase agreements (PPA). Each offers its own advantages.

Solar Lease Billing

The contract in a solar lease stipulates that your solar provider fund the financing, permitting and installation of a home solar system for little or not cost. It then charges you a monthly rate for its use during the length of your lease term.4

Here are the main features of the agreement:

  1. Your solar company owns the system.
  2. You pay a monthly amount to lease the system, while benefiting from the energy it produces.
  3. Solar leases often include maintenance, repairs, system monitoring and insurance for the duration of your plan.

With Sunrun’s BrightSave Monthly, you're completely covered under a comprehensive warranty. BrightSave Monthly passes down incentives, rebates and tax credits to you in the form of a lower solar lease bill. This makes it an ideal plan to secure long-term peace of mind.

Solar PPA Billing

A PPA is a contract in which your solar provider handles the financing, permitting and installation of a solar system on your property for little to no cost.5 You then agree to purchase the power produced by the panels at a set price per-kilowatt-hour. 

In PPA billing:

  1. Your solar company owns the system.
  2. The system’s expected annual output sets the price you pay for your energy.
  3. You can choose to pay a monthly or prepay upfront for all the expected production. Unlike plans from other providers, Sunrun’s monthly PPAs feature fixed monthly bills, regardless of production. Any overproduction is yours free of charge.

Both monthly and prepaid PPAs can also include maintenance, repairs, system monitoring and insurance for the duration of your plan. A prepaid PPA, like Sunrun’s BrightSave™ Prepaid, also accounts for the federal solar tax credit,6 so it feels like buying a system, but without the hassle of dealing with IRS forms. It simplifies your life with bumper-to-bumper coverage over the life of the product.

Are Solar Lease and PPA Plans Worth It?

Solar energy is one of the best ways to offset your future electricity bills with low to zero upfront. 

Rooftop installations have skyrocketed, and there are now nearly 1.6 million residential solar systems in the U. S. Every 90 seconds, a new homeowner is going solar somewhere in the country.10 With a PPA or lease, you can join the millions of households going solar with long-term peace of mind against rising electricity bills.

What Happens With Net Energy Metering?

Net Energy Metering (NEM) is a billing mechanism that allows you to store energy in the electric grid. When your solar panels produce more electricity than you need, that energy is sent to the grid in exchange for credits. Then, when your home solar system isn’t producing as much electricity as you need, you pull energy from the grid and use these credits to offset the cost of that energy. Check your local utility to see if NEM is available to you.

Peace of Mind for Years to Come

Sunrun’s solar leases and PPAs spare you the high upfront costs of a home solar system. We offer you professional installation, maintenance, monitoring, along with insurance during the length of your contract. And if you sell your home, we guarantee a seamless agreement transfer for the new buyer/owner of the property.

Installing solar panels on your roof  also helps the environment by reducing your carbon footprint.11 The environmental benefits, combined with the financial returns, make solar a smart choice.

If you’re considering a lease or PPA plan to get your new residential solar system, we recommend using Sunrun’s solar cost app or request your complimentary quote today. 

References: 
  1. Solar lease vs. solar PPA
  2. How Does Home Solar Battery Storage Work?
  3. Should You Buy Or Lease Your Solar Panel System?
  4. Solar leases: Everything you need to know
  5. Solar Power Purchase Agreements
  6. Solar Investment Tax Credit (ITC)
  7. What is a PPA?
  8. Solar Panel Prices Continue Falling Quicker Than Expected
  9. Solar Industry Research Data
  10. Guide to Valuing Residential Solar Energy Systems
  11. How much do solar panels save?

Sunrun Team

Aug 28, 2019

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