To Lease or To Own: Simplified Solar Calculator

9 years ago John Farrell 18 Comments

Originally published on ilsr.org.

Now simplified, a new solar loan vs lease calculator is here. This tool has been featured on National Public Radio for its ability to help consumers make smart solar system decisions.

Just enter in your zip code, electric utility, and solar array size. Then set the terms of your loan or lease to see how solar ownership stacks up against third-party options.

Solar Calculator

  • Purchase (cash): Customer owns the PV system from day one, pays upfront with cash.
  • Purchase (loan): Customer owns the PV system starting Day 1. It is purchased with a loan, sometimes with a down-payment and paid back at a fixed interest rate.
  • Lease, 15-year buyout: Install company or developer owns the PV System. Customer pays a fixed monthly payment that is adjusted for inflation. At 15 years, the customer elects to purchase the system and assumes full ownership.
  • Lease, extension: Same as “Lease, 15-year buyout” except that in Year 15 the customer elects to extend the lease with the leasing company.

We assumed a $4 cost per watt, along with the 30% federal ITC. Note that utility data is based on residential rates from EIA-861 forms, so some electric utilities’ rates might be out of date. Also note that insolation rates by zip code were gleaned from US National Renewable Energy Laboratory data.

Have fun! And be prepared for our complex solar lease calculator — meant for more data mushing — due out soon.

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John Farrell

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

John Farrell has 518 posts and counting. See all posts by John Farrell