#Smart Way Of Getting Out of a Solar Contract-Solar Panel Contract: How it works?

Getting Out of a Solar Contract

In recent times, solar energy has spread to many parts of this planet. Along with helping the environment, solar energy has made power consumption easier. The sphere of solar energy is widening, and new dimensions are adding to this.

For the customers, despite domestic and commercial users, solar power is now comparatively more amicable solution.

Many homeowners seek solar panel contracts, and many have to get out of the contracts for many reasons. There are certain crucial things which customers should know about How to get out of a solar panel contract.

Solar panel contract: How it works

Many companies around the world provide solar panels. They also come up with multiple options for customers. The solar contract is one of them. 

Like different types of solar panels, solar contracts also have variations. Generally, three types of solar agreements have become popular. Direct ownership, solar lease, and Power Purchase Agreement (PPA) are the genres of solar panel contracts. 

  • Direct Ownership: By this option, a customer chooses a suitable agreement with their provider. When the matter of payments comes, the customer can pay for it or take a solar loan. In recent times, the solar loan has become easier to have one. Before taking a contract, a buyer should know about the panel’s niceties, its working process, and maintenance. Although having the arrangement has almost nothing to maintain, a customer should keep a tiny amount for the costs. Generally, a system runs for about 25 years; a customer should consider it before taking it. Customers who want to expand their savings should think about owning a solar panel. 
  • Solar Lease: By this option, a customer gets a solar PV system which the provider installs along with an inverter and other necessary things. On the other hand, the customer has to pay a certain amount as rent. Usually, after 25 years, the customer can return the system or have a buyout option. It depends on their choice. In this case, the providing companies take the maintenance responsibility. A customer has to become aware of the escalator, by which the rent raises at a specific rate each year. Usually, leasing solar isn’t a more excellent option than owning, but it can be helpful for a customer who doesn’t have that much taxes. 
  • Power Purchase Agreement (PPA): The customer neither owns the system nor leases it by this option. Instead, they have the power it produces. For that, they have to pay a certain amount as a monthly fee. A customer should know about the power production capacity and their needs before going with it. Except for some dissimilarities, it’s almost like solar leasing. For people who look for a lease, a power purchase agreement can be helpful for them too. 

Some Significant Facts about Solar Panel Contract  

Today, solar panels have become common scenario around the world. For the expanding demands for solar electricity, companies like SunRun, SolarCity, or SunPower offer contracts for solar panels in straightforward terms and conditions. Although they are advantageous, a customer should perceive the facts about solar agreements. Here are some crucial attributes that might help: 

  • According to the thoughts of many people, solar energy is free. Well, it isn’t true. The same thing goes for the solar contract. An honest company will show their customer the actual expenses of a solar contract. 
commercial solar energy
  • A popular belief exists that after having a solar contract, no electricity bill occurs. Well, it’s all wrong. A customer must pay a small bill during solar and a heavier account after the 12 months’ cycle. 
  • A typical solar contract can long at least 20 years. But in some cases, the longevity can be 15 years for a customer. According to popular belief, the time conditioning is too long. But actually, it’s not that complex. 
  • According to another popular belief, Power Purchase Rate is very high. But the reality is different. Recently, the price of the solar contract has gone down. In many states in the USA, the solar contract has become affordable. 
  • People often think recent traditional power is easy to get, so solar contract is of no use. This thought exists because of the ups and downs of the current price rates of natural gas. For inflation and other economic consequences, traditional power costs won’t remain cheap. So, it’s high time to get the solar contract. 
  • Compared with a traditional power supply, a solar contract needs extra costs. It includes supply and delivery charges. On the other hand, the kWh rate also matters here. Here every kWh contains the above expenses. 

Why could someone need to get out of a solar panel contact?

Solar energy provides more utility than conventional power systems. By its functionality, the solar contract came into being. Solar contracts work in a systematic way that provides renewable electricity, but consumers should have concerns about these.

#Smart Way Of Getting Out of a Solar Contract-Solar Panel Contract: How it works?
  • The continuing frugality is lower than that of purchasing a solar panel. 
  • A customer could face shortcomings in case of the Federal Tax Credit. Also, having a local SREC (Solar Renewable Energy Certificate) could become troublesome. 
  • During a long-term solar contract, repairing the house could be difficult due to the terms and conditions. 
  • In the case of leasing solar, the escalator could increase the expenditure. Gradually, a customer could face more payoff. 
  • Without owning a panel for himself, a consumer has to pay a lot by contracting solar. 
solar energy in sunny enviorenment
  • It becomes harder to sell a house that went with solar contract. The new home buyers often are not eager to buy one with a solar contract. 
  • Consumers often face another difficulty; owners often design a panel according to their benefit. As a result, solar contracts don’t appear as beneficial as it seems. 
  • Comparing with buying a solar panel, customers don’t have many opportunities which owners have. 

Things one needs to consider about getting out of the solar panel contract. 

Any contract requires proper attention and an entirely critical analysis before going with it. The same is valid here. Canceling a solar contract is a vital matter to perform. Therefore, consumers should prepare themselves to become aware about the reality. Here are some facts about getting out of a solar contract: 

  • Usually, a solar contract lasts for 10 to 20 years. Before that, it’s hard for a consumer to cancel a contract. 
  • Things can become tougher when a consumer wants to sell his house. A buyer may probably not be eager to buy a home with a solar panel by contract. 
  • Typically, a house with solar panels by purchasing can increase the cost. On the other hand, same thing can’t always happen with a place with a solar contract. 
  • The buyout option is crucial for a solar contract. It often happens that if any company doesn’t offer a clear buyout offer, canceling a contract can be the alternate. 
  • Instead of getting out formally, many companies offer a purchasing option for the customers. It’s needless to say that this option is not that profitable for a consumer. 
  • Before installation, cancellation is easier. Usually, a consumer gets a time-lapse of 30 days to cancel a solar contract before having it.  

PPA (Power Purchase Agreement) and getting out of solar panel contract

PPA or Power Purchase Agreement is a kind of business deal; by this, a provider manages a solar panel for its customer. The provider is liable for the design, installation, and maintenance. After the building, the provider sells electricity at a specific rate. Typically, the provider gains profit by selling the power which the panel generates. The company is also responsible for the tax credits and other financial matters. 

Usually, a PPA lasts for about 10 to 25 years. After that, the customer can buy out or purchase the system. As getting out of a solar contract comes, a customer should be aware of something paramount in many respects. 

  • Consumer Doesn’t Have Ownership: In PPA, the consumer doesn’t own the solar system. As a result, many difficulties arrive. He often can’t have the proper outcomes a solar panel gives. On the other hand, costs increase many a time. 
  • The Matter of Property Value: Although PPA almost seems like owning a solar, it’s not. It doesn’t have any connection with the property value. PPA can reduce the property cost because a new owner often doesn’t like that. 
  • The Fact of Yearly Escalators: Many PPA providers include annual escalators. As a result, the cost climbs up at a specific rate. Some companies add it because they think that the electric utility bill of the customers will keep rising. 
  • Irregular Monthly Bill: According to the uncertain appearance of the weather, the monthly expense varies. Unlike solar lease or owning, the bill often takes shape like awful. People can’t foresee whether, similarly, PPA bills become unpredictable as it happens. 
#Smart Way Of Getting Out of a Solar Contract-Solar Panel Contract: How it works?
A common PPA model; seia.org

Buyout or Purchasing: which option is better? 

After having a solar contract, a customer gets an option of either buyout or purchasing the system when it ends. In this situation, many users often face a dilemma. Many new users think that buyout is better as an option; others believe the opposite. Well, each of them has its attributes. Here are some comparisons which can clear the aspects of them:

  • In case of shifting, buying out a solar contract can add more value to a house. In that issue, a buyout can make the cost of a home better. Although purchasing can make this easy, a buyout is more helpful because leading companies offer it before ending the contract. 
  • Usually, after seven years, a customer can buy out the contract. On the other hand, a customer can purchase the contract after it overs. So, buying out can help a consumer in a different situation. 
  • Primarily, consumers often choose buyout mainly to save money. Contrastingly, purchasing doesn’t help a consumer that much. Also, many consumers experience more expenses in purchasing than a buyout. 
  • In any issues of repairing, the consumer takes the responsibility of the panel. Then they have to bear the expenses. Although it sounds the same, the buyout is more helpful because a customer doesn’t have to pay the extra costs. 

Some Statistics

Today’s scenario states that solar contract is becoming less popular among consumers. On the other hand, alternative options are becoming familiar. Many people are rushing for solar loans and other options. But that doesn’t mean that solar panels have become less popular. But newer options are rising and gradually replacing the admiration of solar contract. 

The following figure shows that solar contracts can cause more costs than self-finance solar panels. It means that contracts don’t save consumers money all the time.  

#Smart Way Of Getting Out of a Solar Contract-Solar Panel Contract: How it works?

Solar contracts can cause more costs than self-finance solar panels; triplepundit.com

Another statistic indicates that alternate options are advancing instead of solar contracts. It shows that solar contract is no more popular now than near the past, and new choices are being familiar among buyers. 

#Smart Way Of Getting Out of a Solar Contract-Solar Panel Contract: How it works?

Solar loans are becoming more popular than contracts; pv-magazine-usa.com

Another figure shows that solar loans are capturing the market arena. Here, we can see that solar loans are replacing third-party ownership with increasing benefits. 

#Smart Way Of Getting Out of a Solar Contract-Solar Panel Contract: How it works?

The figure below also indicates that consumer-owned solar panels are increasing at multiple stages. As a result, solar contracts are going backward. Instead of it, solar loans or other direct ownerships are gaining popularity among consumers. 

#Smart Way Of Getting Out of a Solar Contract-Solar Panel Contract: How it works?

Several crucial facts about getting out of a solar panel contract

Before signing a solar contract, a consumer should know some fundamental things about it. 

  • Getting Out of a Solar Contract costs extra money. Although going solar contract costs a little, the case of getting out is different. A consumer should be conscious of that. 
  • A customer can transfer a solar contract. Many solar companies own service transfer specialists who perform this efficiently. If a consumer assigns his contract, a new homeowner can have the contract. Different authorities have various conditions in this case. 
  • In some cases, a customer can shift the panel to another house. Although, a consumer has to examine the targeted house whether the roof is good enough. Many solar companies offer options for relocating a contract. 
  • Many solar companies maintain pay escalators. By this, costs increase at a specific rate. Thus a consumer has to count more money. It’s a prime reason for which many consumers want to get out of solar contracts. 
  • Although companies take the charge of maintenance, sometimes the consumers have to bear the cost of maintaining the solar system. 
  • Companies often run the contract even the consumer dies. Unbelievable, but it’s true. In this critical situation, the family members have to continue the contract. But recently some changes have appeared in this matter. 

FAQ’s about getting out of a solar panel contract 

What Does PPA Refer?

The PPA or Power Purchase Agreement is a contract between a provider and consumer. By signing this contract, a consumer purchases the power from the authority’s solar panel. He has to pay an annual amount for the power he buys from the provider. 

What Happens If a Solar Contract Ends?

When a solar contract is over, a consumer often has several options. He can extend the contract or purchase the system at a fair market value. Or, the consumer can inform the authority to remove the panels from his roof. 

Who Takes care of the solar Panels?

The providing authority, for example, the SunRun or the SolarCity takes care of the solar panels. 

After Going with Solar Contract, Will a Customer with the Grid? 

Yes, certainly. The contract providers ensure it. A consumer gets the benefit of the power grid after signing a solar contract. 

What Happens if The Roof Damages?

If a customer informs, the providing companies take charge of repairing the roof of the consumer. 

Is Solar Lease Very Expensive for a Consumer?

It isn’t, actually the opposite, profitable. But that’s not the problem. The reality is that today it has become a trap for many consumers. The conditions often create complexities by which buyers often want to get rid of the solar contract. Moreover, new options like solar loans have become more accessible now, so solar contracts are becoming less popular. 


Renewable energy is always good for our surroundings when people use it properly. Solar panels are the perfect examples of clean energy by which a green future could come nearer.

The solar contract is a familiar medium by which a homeowner can have the power by paying for it. But sometimes contracts become costly and complex, although it’s very trendy. That’s the reason for many buyers are getting out of solar contracts. 


Today, a lot of ways have become easier to get solar power for consumers. Among them, a solar contract is a significant way that gained much familiarity for years. By signing a solar contract, a consumer gets the power which the solar panel produces. The company owns the panel and takes a certain annual amount for the energy. Recently, for many customers; solar contract has become hard to deal. Because of the conditions of the contracts, consumers often have to pay more money. That’s why today many consumers want to get out of solar contracts. They have other good options like the solar loan, which is becoming popular day by day.


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