Create a Lease Option in Finance Setup

In this article, we'll explore how you can create a lease option for solar, including key components such as the price per kilowatt-hour ($/kWh), annual escalator, and lease term.

Go to Settings and Finance Setup

Click on Create Custom Finance

Add details for Lease Term, Price per kWh, Annual escalator including the name of the bank and project type(residential/commercial or both)

1. Understanding Solar Lease Options:

Solar leasing allows you to "rent" solar panels installed on your property, typically for a fixed monthly fee. Instead of purchasing the solar panels outright, you pay a predetermined amount to the solar leasing company for the electricity generated by the system. Some of the key banks providing lease products are Posigen , Swell...

2. Price per Kilowatt-Hour ($/kWh):

The price per kilowatt-hour is the rate you pay for the electricity produced by the solar panels. This rate is usually lower than what you would pay to your utility company for traditional grid electricity. The $/kWh rate is determined at the beginning of the lease agreement and remains fixed throughout the lease term, providing predictability and stability for your energy costs.

In some cases this can also be modelled by fixed amount instead of price per kWh

3. Annual Escalator:

To account for inflation and other cost factors, solar lease agreements often include an annual escalator clause. This clause allows the lease provider to increase the $/kWh rate by a predetermined percentage each year.

4. Lease Term:

The lease term refers to the duration of the lease agreement. During the lease term, you benefit from the electricity generated by the solar panels while the leasing company retains ownership and responsibility for maintenance and repairs. At the end of the lease term, you may have the option to renew the lease, purchase the solar panels at fair market value, or have them removed from your property.

Example: The generation for in the below case is 1621.8 kWh hence the lease amount at $2/kWh for year 1 is $3244. The payment increases by 3% year on year, for example Year 1 the lease payment is $3244 which increases by 3% in Year 2 to $3341.