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How Does Solar Panel Billing Work?
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As much as a homeowner would love to invest in a solar panel system, the high upfront costs for installation, solar panels, battery storage, and other equipment can be offputting. And even with incentives such as tax credits, rebates, solar renewable energy credits (SRECs), and performance-based initiatives to reduce costs, the commitment can still feel a bit too daunting.
But we believe in making solar affordable to every home. That’s why we offer options for every budget, including our solar lease and Power Purchase Agreement (PPA)plans with little to no upfront cost. If that seems too good to be true and leaves you asking, "How does solar billing work?" we're here to shed some light on the situation.
Solar lease and PPA bills explained
A solar lease lets you get the benefits of solar energy without buying a home solar energy system yourself. We install the system and then lease the equipment to you at a fixed monthly amount or you can pay for the electricity the panels generate at a set price per kilowatt-hour.1 Over the lifetime of the system, your average electric bill savings could be thousands of dollars.3
Solar leases typically last about 20 to 25 years. During that period, we’ll carefully monitor your system's hardware and performance.2 And when the term of your agreement ends, you can renew your contract or purchase the system to keep—just like leasing a vehicle.
If you choose to not renew, we’ll often remove the panels and restore your roof to its original condition at no additional charge.
Differences between solar lease and solar PPA
Households renting solar equipment have two primary choices: solar lease and power purchase agreement (PPA). Each has it’s own advantages.
Solar Lease: You pay a fixed monthly amount to use the energy generated by the solar system on your roof.
Solar PPA: You pay a fixed price per kWh for power generated by the system. In most cases, your monthly bill will rise or fall with the amount of power your system produces.
One common feature of solar leases and PPAs is that there are no high upfront costs for solar panels, equipment, or installation.
Are solar lease and PPA plans worth it?
Solar energy is one of the best ways to offset your future utility bills with low to zero upfront costs.
Rooftop installations have skyrocketed, and there are now nearly 4 million residential solar systems in the U. S. 5 In 2022, a new solar project was installed every 44 seconds.6 With a PPA or lease, you can join the millions of households going solar and enjoying long-term peace of mind against rising utility bills.
What happens with net energy metering?
When your solar panels produce more electricity than you need, Net Energy Metering (NEM) let’s you send excess solar energy to the grid in exchange for electric bill credits.
Then at night, or when your home solar energy 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 with your local utility to see if NEM is available to you.
Investing in solar battery storage
A grid tied system let’s you benefit somewhat from the excess solar energy your system produces, but it doesn't protect you against blackouts. Pairing your solar system with battery storage is the most efficient way to take advantage of that extra energy and ensures your system is reliable even when production is down.7 Plus, a battery storage system will help reduce your electricity bills when solar panel production is low by allowing you to draw from your stored solar energy instead of the grid.
Besides, some utilities are phasing out net metering programs or buying electricity generated from solar panels at low wholesale rates, but selling it at retail prices. This means you won't save as as you could with a battery storage.
Sunrun battery backup lets you store and manage energy from your solar energy system and seamlessly optimizes your home energy usage from your solar power system. Backup batteries are only compatible with new solar installations at this time, so make sure to ask your Sunrun rep to see if a solar battery is right for you.
Frequently asked questions (FAQs)
Below are common questions people ask about solar billing:
Will I have a utility bill if I’m on a solar lease or PPA?
As long as your home is connected to the utility grid, you’ll always receive an electric bill from your utility.
During the months when your solar production covers 100% or more of your home's electricity usage, your utility will bill you for the taxes, fees, and proprietary options that are associated with being connected to their grid.
During the months when your solar panels cover less than 100% of your home's electricity usage, any additional electricity that you have not used from your solar system will come from your utility.
What should I do if my system isn't working as expected?
When you choose our monthly solar lease, you're covered in free maintenance, repairs, and comprehensive insurance. Sunrun has a professional team dedicated to ensuring your system is working at peak performance. The team will contact you immediately if they notice something is wrong with your system.
Can I still claim tax credits or incentives with a solar lease or PPA?
You're not eligible to claim tax credits or incentives for your solar energy system with a solar lease or PPA since it's under the ownership of a third party.8 At Sunrun, we pass on the benefits of solar tax credits and incentives to our customers, which reduces your monthly payments. Speak to our solar experts for more information on solar tax credits, leases, or our PPA.
What if I move to a different residence with solar panels?
You have several options if you're leasing your solar energy system or have a PPA and want to move to a new residence. The easiest and cheapest option is to transfer the solar panel system to the new homeowner. Sunrun has Service Transfer Specialists who will walk with you throughout the process.
You can also prepay for the service and add the cost to your home's selling price. Once the agreement term is over, Sunrun will uninstall the solar panels at no cost. If you want to move your solar panels to your new residence, which is costly, you can buy the solar installation from us. At Sunrun, we will be with you every step of the way, no matter your choice.
Peace of mind for years to come
Sunrun's solar leases and PPAs spare you the high upfront energy costs associated with most solar purchases. Plus you get a professional install, maintenance, monitoring, and insurance throughout your contract. As an added bonus, you also help the environment by reducing your carbon footprint when you install solar panels on your roof.9 And if you sell your home, we guarantee a seamless agreement transfer for the new owner.
If you're considering a lease or PPA plan to get your new residential solar system, we recommend using Sunrun’s product selector or requesting your free consultation today.
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