Category: Solar 101

If you’ve done any research on solar or sat through a pitch from a solar company, chances are you’ve already come across the term hybrid inverter, alongside other inverter types like string inverters or microinverters. Hybrid inverters represent a newer generation of solar technology. While newer doesn’t always mean better across the board, in specific cases — like preparing for battery storage — they can offer an advantage. In this article, I’ll walk you through what a hybrid inverter is, how it works, and its pros and cons compared with traditional inverter setups.

What is a Hybrid Inverter and How Does It Work?

A hybrid inverter is a type of inverter that can handle both solar panel input and battery storage — all in one unit. To be more specific:

• It converts solar DC energy into home-ready AC electricity, just like traditional string inverters do.
• It can send energy to charge a battery and pull energy from that battery to power your home when needed

It does everything a standard inverter does, converting power and exporting excess energy to the grid, but being able to switch intelligently between sources (solar, grid, battery) depending on your home’s needs — a “smarter” version of the traditional inverter, basically.

How is a Hybrid Inverter Different From a Regular Inverter?

The biggest difference between a hybrid inverter and a regular inverter arguably comes down to battery readiness and energy management.

With a hybrid inverter, you have a smart traffic cop that directs power to the most efficient path. Depending on your goals and preferences, it may:

• Send solar power to your home first, and then store any extra in the battery
• Prioritize charging your battery first — ideal if you want backup power during frequent outages
• Only send excess power to the grid after the battery is fully charged
• Pull power from the battery at night or during expensive time-of-use pricing periods

On the other hand, a regular grid-tied inverter simply converts the DC power from your solar panels into AC power for your home and the grid — and that’s it.

It doesn’t know or care about your battery. It doesn’t prioritize it, manage it, or optimize how or when it’s charged or discharged. It just pumps out AC power, regardless of your energy strategy.

Benefits of a Hybrid Inverter

Okay, cool, a hybrid inverter can do all that. But is it really necessary?

If you’re thinking about going solar and are already pretty dead set on adding a battery soon, then yes, you’re likely better off choosing a hybrid inverter.

Here are three main pros that highlight why:

Cleaner, Simpler Solar Setup

With a hybrid inverter, everything — your solar panels, your battery, and the grid connection — is managed by one unit. This means fewer components, cleaner wiring, and an overall simpler setup.

Meanwhile, for a traditional string inverter to achieve this kind of energy management functionality, it needs to be paired with a smart battery system.

That alone, at first glance, already tells you that you’re dealing with two separate systems that have to work together — one handling solar, the other handling storage. And that naturally leads to more wiring, more hardware boxes, and more potential points of failure over time.

To be fair, this alternative route works perfectly fine. In fact, it’s what I’ve seen with most solar customers, especially those who either added a battery much later or took over an existing system they’re looking to retrofit.

Higher Efficiency

Looking at energy conversions from a theoretical angle, every time energy changes from DC to AC or vice versa, a little bit gets lost as heat. The more conversions there are, the more energy you lose.

So in terms of efficiency, fewer conversions usually mean better performance. 

A hybrid inverter converts energy only twice.

• The inverter takes DC energy from your panels and stores it directly into your battery — still in DC.
• Later, when your home needs it, the inverter converts it once into AC to power your appliances.

One conversion in, one conversion out.

Meanwhile, in a string inverter plus a separate smart battery system setup:

• The inverter takes DC energy from your panels and converts it to AC.
• The smart battery’s inverter converts that AC energy back into DC to charge your battery (because batteries store energy in DC, not AC).
• When your home needs that stored energy, the battery’s inverter converts the stored DC energy back to AC.

That’s three conversions instead of two, making hybrid inverters slightly more efficient than this setup.

The difference might not seem all that dramatic if you’re looking at just a single moment of energy transfer. But remember, we’re talking about energy conversions that happen every day, over and over again. Over time, those little bits of energy loss add up.

That’s why hybrid inverters tend to edge out in performance when it comes to battery integration.

Unified Control

When we say “unified control,” we mean having the ability to manage everything from a single platform.

Hybrid systems often make this super simple. Most hybrid inverters come with their own app or dashboard, giving you a real-time view of how much power you’re generating, storing, and using.

Now compare that with a traditional setup where you pair a string inverter with a smart battery. In this case, you’re dealing with two separate systems. That usually means two different interfaces, which can feel less streamlined and a bit more clunky when you’re trying to track everything or make adjustments.

Disadvantages of Hybrid Inverters

Below are the cons and drawbacks of hybrid inverters.

One System Means One Single Point of Failure

This, I would say, is the most critical drawback of hybrid inverters. We’ve talked a lot about the convenience of having everything handled by a single unit, but that same convenience can also be its kryptonite.

If that one unit fails, everything goes down with it — your solar, your battery, and your grid syncing.

With a dedicated inverter for solar and a separate one for your battery, at least your battery could still charge and step in during outages, even if the solar side of the system has issues.

You Can’t Use It to Upgrade an Existing System

If someone already has a solar setup with a traditional string inverter, it doesn’t really make practical or financial sense to rip it out and replace it with a hybrid inverter just to add a battery. At that point, going with a smart battery that comes with its own inverter is often the simpler and more cost-effective route.

Battery Compatibility Can Be Limited

If you already have a specific battery in mind, it’s worth double-checking whether it’ll work with the hybrid inverter you’re planning to use. Some inverters only support certain battery brands, so if there’s no match, you might have to either change your inverter or go with a different battery entirely.

Can a Hybrid Inverter Work Without a Battery?

Yes, you don’t need a battery to use a hybrid inverter. Without one, it works a lot like a traditional inverter: It converts solar DC into usable AC and sends any excess power to the grid.

In this case, you’re not using it to its full potential just yet. Again, the real strength of a hybrid inverter lies in its ability to manage battery storage, which means without a battery, you’re only tapping into part of what it can do.

The good part is that in this case too, you have flexibility. You can start with solar now and easily add a battery later without needing to do much reconfiguration to your system.

How Long Do Hybrid Inverters Last?

Hybrid inverters typically last around 10 to 15 years, which is about the same as most string inverters. For comparison, microinverters tend to have a longer lifespan, often lasting up to 20 years.

How Do Hybrid Inverters Handle Power Outages?

If paired with a battery, the inverter detects an outage and switches to stored power instantly, usually within milliseconds. That means you can expect a truly automatic switchover so fast you won’t even notice the power went out.

Do Hybrid Inverters Require Maintenance?

Yes, hybrid inverters still require maintenance, but not much. However, since they handle both your solar system and your battery, it could be worth checking occasionally to make sure the unit is free of dust, ventilation isn’t blocked, and there are no error lights or app alerts.

Some models update firmware automatically, so in most cases, that part takes care of itself.

Final Thoughts

Going with a hybrid inverter makes a lot of sense if you’re planning to install a battery soon. It keeps everything clean and simple — one unit, one installation, ready for storage now or later.

That said, if you’re not 100% sure about adding a battery yet, no worries. Like I mentioned earlier, you can absolutely stick with a traditional setup and still add a battery later using a smart battery system. It’ll take a bit more work and wiring, but for a certified solar installer like us, it’s nothing out of the ordinary.

Still, here’s something worth thinking about: Maybe you don’t need a battery today because your utility offers full retail net metering. But that could change. 

Case in point: Arizona transitioned to net billing in 2016, Utah in 2017, and more recently, Idaho followed suit in 2023. All three now pay homeowners less for the solar they export to the grid.

What this means is, storing your own solar power instead of selling it back could be the smarter financial move going forward.

If you’re curious how a battery might fit into your solar setup, get in touch. We at Avail Solar would love to walk you through your options in a quick, friendly chat.

When we picture the winter season, most of us imagine our roofs buried in snow, the biting cold that lingers, and the sun barely making an appearance. And so, the idea of solar energy during this time can feel a bit counterintuitive. But contrary to popular belief, solar panels do still work in winter, which means the value of going solar doesn’t disappear — and your investment doesn’t go to waste. Read further as I walk you through the facts about what happens to solar during winter, and how they continue to produce energy even when it’s cold and overcast outside.

Do Solar Panels Work in Winter?

Yes, solar panels absolutely work in winter. As long as there’s sunlight, your panels will keep generating electricity — because what they need is light, not heat.

Side note: I’ve actually stressed this a lot in a previous article, Do Solar Panels Work on a Cloudy Day?

Here are three facts that show why winter doesn’t actually stop your system, and how, in some cases, it might even give it a bit of an edge.

Solar Panels Run on Sunlight, Not Temperature

This might be the biggest misconception out there. As I mentioned, solar panels don’t need warm weather to function. They need photons, which come from sunlight. Even in winter, the sun still shines (albeit for shorter hours), and that light is enough to keep your system going.

To put this in perspective, take a look at Minnesota and Michigan. Both states experience harsh winters, yet still rank among the top 20 solar states in the U.S., according to the Solar Energy Industries Association (SEIA).

Solar Panels Are More Efficient in Cold Weather

Building on the previous point about solar panels not needing heat to function, it might surprise you that they’re not particularly fond of high temperatures either.

In fact, excessive heat can reduce their voltage, which in turn slightly lowers their efficiency.

Most solar panels are tested at a standard temperature of 77°F (25°C), but for every degree Celsius above that, their efficiency drops slightly. This drop is measured by what’s called the temperature coefficient — usually around -0.3% to -0.5% per °C, depending on the panel brand.

For example, if your panels are operating in 30°C (86°F), that’s 5°C above the test condition of 25°C (77°F). With a temperature coefficient of -0.3% per °C, this means you’d lose about 1.5% efficiency due to the heat.

So if your panels are rated at 21% efficiency under ideal conditions, they’d drop to around 19.5% efficiency under those warmer temperatures.

In contrast, colder temperatures reduce internal resistance. That means with less heat to push against, panels convert sunlight to electricity more effectively.

The ‘Albedo Effect’ Can Actually Increase Solar Output

When sunlight hits snow-covered surfaces, that light reflects back upward — a phenomenon called the albedo effect.

That extra reflected light can bounce onto your panels and boost the amount of energy they take in. In theory, the more they absorb, the more electricity your system can generate.

Do Solar Panels Work With Snow on Them?

Yes, solar panels can still work when covered in snow — but only if the snow isn’t entirely covering them. A thin dusting probably won’t affect that much, but a heavy blanket of snow can temporarily block sunlight from reaching the panel.

Fortunately, solar panels are usually installed at an angle, so when the sun comes back out, most of the snow begins to melt and slide away on its own. Helping this along is the fact that panels are built with smooth, tempered glass, which makes it harder for snow to stick in the first place.

They also generate a bit of heat while operating, which, combined with their dark surface absorbing sunlight, helps them shed snow faster than the surrounding roof.

How Well Do Solar Panels Work in Winter?

During winter, solar panel production can drop to about 30% to 50% of a system’s rated capacity. So if your system typically produces 900 kWh in July, you might only see around 270 to 450 kWh during the colder months.

Do take that with a grain of salt, though, because how much less energy your system produces in winter depends on several factors:

• Daylight Hours: States with more peak sun hours tend to generate significantly more energy than those with fewer.
• Cloud Cover: The cloudier it gets during winter, the tougher it is for direct sunlight to break through. And when light intensity drops, so does your system’s energy production.
• Snow Cover: As mentioned, panels can occasionally get covered in snow. In rare cases where snow completely blocks sunlight, energy production ca nosedive, similar to how shading from trees or nearby structures can reduce output.

Even with all of that in mind, here’s why you shouldn’t worry.

Remember that a well-designed solar system is built to match your household’s energy use across all seasons. Combine that with net metering, and the energy your system overproduces during sunnier spring and summer months can be banked as credits to offset those dips in winter production.

So even if your panels generate a little less in the colder months, your annual performance still stays on track.

And speaking of ‘staying on track’, there are things you can do to keep your panels performing at their best during this low-yield season.

Ways to Keep Your PV Panels Performing Well in Winter

Use a Solar Snow Rake to Remove Buildup

If snow buildup is blocking light for days, you can gently remove it using a solar-safe brush or a roof rake with a soft rubber edge. Never use metal tools (like a shovel) or pressure washers as they can scratch or crack the glass surface.

Avoid Dangerous DIY

Don’t climb on an icy roof just to brush snow off panels. The energy gain isn’t worth the risk. As mentioned earlier, using a solar-safe snow rake from the ground is a much safer alternative if clearing snow becomes necessary.

Better yet, call a professional solar panel cleaning or maintenance team instead to do the job. 

Trim Nearby Trees

Since the winter sun rides low, even small shadows can cut down energy production. By trimming branches in late fall, you help maximize the light your panels can catch during shorter days. This is especially important in neighborhoods with mature trees.

Consider Oversizing Your System

Slightly oversizing your system can help you generate extra energy during the sunnier months — especially useful if your utility offers net metering. Those summer overages can turn into bill credits that help offset the dip in winter production.

This, I would say, is something you shouldn’t worry so much about. Certified solar installers like us will handle your system’s sizing based on your year-round energy use.

Explore Tracking Systems (If Applicable)

While residential rooftops don’t usually come with adjustable mounts, ground-mounted systems sometimes do. Dual-axis tracking systems can tilt and rotate to follow the sun throughout the day and year — including adjusting for that low winter sun angle.

Do Solar Panels Crack in Cold Weather?

No, solar panels don’t crack in the cold winter weather since they are engineered to resist very low temperatures. In fact, they undergo rigorous testing under standards like IEC 61215 and UL 1703, which includes the Thermal Cycling Test. 

Here, panels are subjected to temperature fluctuations between 40°C and +85°C for 200 cycles to simulate real-world thermal stresses.

Avail Solar proudly installs panels from REC, Hyundai, and QCells, all certified to meet these standards.

Winter Solar Works With the Right Design

Winter production dips — that’s expected. But that dip can be balanced out by the extra energy your system produces during sunnier months. It all comes down to one thing: A solar system tailored to your home’s consumption.

At Avail Solar, we build home solar systems that are ready not just for the winter, but for the entire year. Our team has installed hundreds of home solar setups across Utah, Nevada, and Colorado, all designed around seasonal shifts and real household energy needs.

Request a quote today or call us to get started

If you’ve spent any time learning about net metering, chances are you’ve come across something called the solar true-up bill — or if not, you probably will at some point.  Even so, it’s one of those things that doesn’t get much attention upfront, but can catch you off guard if you’re not prepared for it. And while most homeowners are familiar with their monthly utility bills, the true-up bill works a little differently. So in this article, I’ll explain exactly what it is, how it ties into net metering, and what you can expect.

What is a Solar True Up Bill?

A solar true-up bill is a statement from your utility that sums up all the energy you’ve sent to the grid and taken from the grid over a 12-month billing cycle. Essentially, it settles the difference between what your solar system produced and what your home used over the year.

A typical solar true-up statement includes several important data points:

• The total amount of electricity your system produced
• The total energy your home consumed
• Net energy metering credits earned and used
• Any remaining balance due or credit surplus
• Charges for grid access, delivery, or other fixed fees

Nevada ranks in the top 10 U.S. states with the most solar installed. So it’s no surprise I get a lot of questions about net metering in Nevada. And chances are, if you’re about to go solar, you’re probably wondering what’s in it for you as well. In this guide, I’ll walk you through how the credit system works, what to expect on your energy bill, and whether it’s something worth getting excited about (Spoiler: It probably is).

How Does Net Metering Work in Nevada?

Net metering works like a power-sharing agreement between you and your utility company. 

When your solar panels produce more electricity than your home uses — especially during those sunny afternoons when you’re out and your home isn’t using much electricity — you send that surplus power back to the grid. In return, your utility gives you “energy credits”.

You can then use these credits “pay” for the electricity you draw from the grid when the sun isn’t shining, like at night or on gloomy, overcast days.

Now, let’s zoom in a bit more on how net metering plays out specifically here in Nevada.

Net Metering is Required Under State Law

Nevada law actually requires public utility companies to offer net metering. Thanks to Assembly Bill 405 (AB 405) — also known as the Renewable Energy Bill of Rights — utilities like NV Energy must provide energy credits for surplus solar production.

This law was passed in 2017 after earlier changes from Senate Bill 374 (SB 374) caused some friction in the solar community. The Public Utilities Commission of Nevada (PUCN) was given the job of implementing this policy and regulating how utilities credit solar customers.

What this means for you is simple: If you install solar, the utility can’t ignore you. They’re required by law to let you participate in net metering and to pay you — through credits — for your excess energy.

How do you get in on Nevada’s net metering setup?

If you’re installing solar panels, your solar installer usually takes care of enrolling you in the net metering program as part of the overall setup. They’ll submit the paperwork to your utility provider, and once approved, your system gets connected to the grid with net metering enabled.

And if you’re wondering if you can still participate in net metering if you’re leasing your solar panels instead of owning them? The short answer is yes. However, the contract may come with a few conditions, so make sure to read the fine print or ask your provider how the credits are handled.

NV Energy Net Metering Policy

As the state’s primary investor-owned public utility, NV Energy delivers electricity to around 90% of the population. Whether you’re in Las Vegas, Reno, Henderson, Sparks, or Carson City, there’s a big chance they’re the ones sending you your monthly electric bill.

And that’s exactly why we’re giving NV Energy its own spotlight here. Since they serve the lion’s share of Nevadans, understanding how they handle net metering will likely answer most of your questions. (Don’t worry, though — we’ll still talk about other local utilities in a minute.)

Here’s a breakdown of how NV Energy’s net metering setup works.

Net Metering Tier System

NV Energy uses a tiered structure for net metering. The amount of credit you get for the excess electricity your panels send to the grid depends on when your system was installed.

Since June 2020, new net metering customers have been placed under Tier 4, which offers an excess energy credit (EEC) rate listed in NV Energy’s official schedule of ¢8.544 per kilowatt-hour (kWh).

This export credit rate is about 79% of the current retail electricity rate of ¢10.865 — though keep in mind, rates can change year to year, so the export credit tends to hover around 75% of whatever the current retail rate is.

To put it into perspective, let’s say your home sends 500 extra kilowatt-hours (kWh) back to the grid in a month. Under NV Energy’s current Tier 4 rate, you’d earn about $42.72 (500 × 0.08544) in energy credits. That’s real value you can apply to your next bill.

If you’re thinking about going solar in Utah, chances are, you’ve heard people talk about “net metering” and how it can “earn you credits.” But what does that really mean for you as a homeowner, especially with different utilities offering different rates, rules, and credit structures? In this article, I’ll walk you through what you need to know about net metering in Utah, including how export credit rates vary depending on your utility provider and answers to the most common questions.

Does Utah Allow Net Metering?

Yes, Utah allows net metering. In fact, it’s built into state law. According to Utah Code Title 54, Chapter 15, public utilities are required to let homeowners connect solar systems to the grid and receive credit for extra energy they generate.

Simply put, if you’re a customer of a public utility, you can generate your own electricity and feed the extra back into the system.

Again, note that this rule only applies to public utilities — and in Utah, that pretty much means Rocky Mountain Power (RMP). It’s the only public utility serving most of the state, and it’s regulated under state law that requires net metering options.

That said, if you’re served by a municipal utility — like those in Provo, Murray, or Bountiful — you’re not bound by the same net metering laws. These cities set their own policies, credit rates, and program rules. That’s why solar customers across Utah don’t all get the same deal (more on that later).

Many people come across ads promising “free solar panels” or “zero-down solar”, and chances are, they’re referring to a solar lease. I wouldn’t be surprised if that’s how you first got curious about solar panel leasing too. And while the offer can be really tempting (solar leases have become quite popular among homeowners), that doesn’t mean you should jump in right away. Truth is, it could either work out for you — or it could end up being a contract you regret signing. That’s exactly why, in this article, I’ve taken a deeper look into how solar panel leasing works. Keep reading to learn about the typical terms, the pros and cons, and what to expect from start to finish, so you can figure out if it really makes sense for your situation.

What is Solar Panel Leasing?

A solar panel lease is basically a solar rental arrangement, where you agree to have solar panels installed on your home without having to pay money upfront.

Instead of buying the panels outright (which can be pretty expensive), you pay a fixed monthly fee for the electricity the panels produce. More often than not, that monthly lease payment is lower than your current utility bill. And yep, that’s one of the main selling points: Savings from day one.

If you’re already familiar with solar leases, chances are you’ve also come across Power Purchase Agreements (PPAs). 

The two are quite similar, but there’s a key difference. With a PPA, you’re billed for the exact amount of energy your system produces, rather than paying a set fee each month.

In both cases, though, the solar company still owns the system — you’re just paying to use the power it generates. You get the full solar experience without having to fork over the full cost of ownership out of pocket.

What Are the Terms of a Solar Lease Agreement?

Typically, here’s what you’ll find buried in the fine print of a solar lease agreement:

• Contract Length: Most solar leases run between 20 to 25 years, about the same lifespan as the solar panels themselves.
• Monthly Payments: These are usually set at a fixed rate, though some may climb slightly each year based on inflation or energy trends.
• Escalation Clause: Some leases include a yearly increase (typically 1–5%) to account for rising utility rates.
• Maintenance and Repairs: Since the solar company owns the panels (not you), they’re typically responsible for all maintenance and repairs.
• Performance Guarantee: Many providers add a performance clause. If your system doesn’t generate as much power as promised, you might be eligible for reimbursement or compensation.

Now, you might be raising an eyebrow after seeing how a few of those terms could come off as potential red flags, and I totally get that. Personally, I’m not the biggest fan of solar leases either…

But to be fair, they do have their place. 

In some situations, especially for those who really want to go solar but don’t have many options, a lease might actually make sense. Let’s look at the pros and cons next so you can see for yourself.

Advantages of Solar Lease

No Upfront Costs

If you’re unable (or simply not willing) to shoulder the hefty upfront cost of a solar installation, whether through an out-of-pocket purchase or a solar loan, then a solar lease can be a practical way to go solar. 

It follows a “pay-as-you-go” model, which means you won’t need to worry about financing the system yourself.

Predictable Energy Costs

With a fixed monthly payment, you’ll know exactly what to expect each month — and that makes budgeting a whole lot easier. 

Of course, solar won’t always cover your entire energy consumption, so you’ll still need to pay both the solar lease and any remaining utility costs. Even so, you’re locking in a huge portion of your energy expenses, leaving only a small chunk subject to utility rate changes.

Immediate Energy Savings

As I mentioned earlier, your monthly fee typically starts out lower than what you’d usually pay for utilities. So if your average utility bill is $150 and your solar lease is $100, that’s an immediate $50 in savings. 

We can call it a sales strategy all we want, but we can’t deny that savings on electricity costs start as early as day one.

Now, it’s entirely possible that you might end up paying more in the long run for the lease (I’ll get into that more in the cons section), but the time value is definitely there. 

And what I mean is, it gives you time to invest in efficient appliances or adopt energy-saving strategies that can help bring your utility costs down even more in the future.

Net Metering Benefits

Even if you don’t own the system, you can still benefit from net metering — a billing system that gives you energy credits for any excess electricity your solar panels send back to the grid. You can use these credits to help you offset your utility bills.

Maintenance-Free Ownership

Since the solar company retains ownership, they’re responsible for repairs, cleaning, maintenance, and even panel replacements if needed. 

Most of the time, you won’t need to make any changes to your homeowner’s insurance, as the solar company usually handles that on their end.

One thing to note, though: Maintaining the system is one thing, but being responsive and actually picking up the phone when a customer calls for service is another. 

Unfortunately, many companies intentionally stall on maintenance requests simply because there’s little incentive to follow through. 

That said, this issue isn’t unique to solar leases. It can happen even with systems that are purchased outright…

Which is why I stressed in a previous article (Questions to Ask a Solar Company) how important it is to check contact details and know exactly who your point person will be when dealing with a solar provider.

Protection Against Rising Utility Rates

If utility rates keep rising faster than your solar lease escalator, you’ll continue to save. Historically, some states have seen electricity rates spike sharply, sometimes by more than 10% in just one year.

If a homeowner there had been on a solar lease with a predictable rate — even with a 2–3% annual escalator — they would’ve ended up paying far less than if they stuck with their utility provider.

Disadvantages of Leasing Solar Panels

You Don’t Own the System

And that’s unfortunate because it means you won’t be eligible for federal or state incentives.

Take the 30% Solar Tax Credit, for instance. If your system costs $20,000, you’d only end up paying around $14,000 after the credit. Depending on where you live, there may also be local rebates or programs that could make your savings even bigger.

Moreover, in a previous article, I talked about how your solar ROI can be much better when you own the system outright. That’s because, once your system is fully paid off, it keeps generating free electricity for years to come.

Sadly, that’s not the case with a solar lease. When the term ends, you’d have to buy the panels at their market value if you want to keep them.

Rising Monthly Payments

Despite the predictability of payments, we can’t ignore the fact that those annual escalators gradually eat into your savings.

This is especially true if you live in an area where utility rates have remained flat or even decreased over time.

In that case, there’s a real possibility that your solar lease payments could eventually match — or even exceed — what you would’ve paid your utility company. And if that happens, you might actually end up at a loss.

Less Control Over System Upgrades

Solar lease rates might be predictable, but your energy needs are likely not. You might get an EV, install a hot tub, or upgrade your HVAC, any of which could raise your electricity use and require a bigger system.

The issue is, since you don’t own your system, you can’t upgrade or make modifications freely without the company’s approval.

Remember, your lease payments are based on the system’s original design. 

If that setup no longer meets your needs, you’re still locked into paying the same fixed monthly fee. If the system underproduces, you’ll end up paying both your lease and whatever extra electricity you need from the utility.

Selling Your House Gets Complicated

Solar panels can increase your property value and help your home sell faster — but that usually only applies if you own the system.

If you’re trying to sell your house during an active lease, you’re faced with two options, and both can put you at a disadvantage:

• Lease Buyout: This often costs more than if you had purchased the system upfront. Worse, some contracts don’t even allow customers to buy out the lease early in the term (though newer lease agreements have improved in this area)
• Lease Transfer: Here, you’ll need to convince the buyer to take on an added financial obligation — a major drawback to begin with. To make things harder, they’ll also need to go through credit checks and meet approval requirements set by the solar company, which adds another layer of hassle.

This issue has become common enough that many realtors now prepare for the question: “Should I buy a house with leased solar panels?” That kind of hesitation alone can shrink your pool of interested buyers.

What Happens at the End of a Solar Lease?

When your lease term ends, you’ll typically have a few options:

• Renew the Lease: Some providers allow you to extend your lease for additional years.
• Start a new lease: And that involves installing a new home solar system
• Purchase the System: In many cases, you’ll have the option to buy the solar panels at fair market value, which may be a lot lower than their original price.
• Have the System Removed: If neither of the above options appeals to you, the solar company will usually remove the system at no additional cost to you.

Details can vary depending on the solar company, so it’s important to read the fine print carefully or ask your provider directly to clarify your options.

Is It Better to Buy Solar Panels or Lease Them?

Choosing between buying your solar panels outright or leasing them mostly depends on your financial situation and long-term goals. Below, I’ve laid out a side-by-side comparison to help you weigh your options clearly.

Here’s my honest take: If you can afford it, buy your panels outright — or get them through a solar loan. In both cases, you own your system and that usually means more long-term savings, which is often the main reason people go solar in the first place.

How Much Does a Solar Lease Cost?

Expect a solar lease to range from $50 to $250, or possibly even more. Truth is, it’s hard to pin an exact number since the cost depends mostly on your system’s size (which has a lot to do with your energy consumption) and the utility rates in your area.

Tips to Make the Most of a Solar Lease

Understandably, not everyone has the opportunity to purchase their panels, and sometimes, a solar lease is the only realistic way to go solar. But like I said, there are still some merits to leasing, especially if you land a deal that actually works in your favor.

If you have to move forward with a solar lease, here are some tips to keep it from turning into a headache later on:

• Look for a lease with a 0% escalator. If that’s not possible, aim for one with no more than 1–2%.
• Ask your provider how much of your energy use the system will offset. Like I mentioned, most leased systems aren’t designed to cover 100%. If they can’t give a straight answer (or leave you guessing), I suggest you look for another provider.
• Know your end-of-term options. That includes what happens if you want to buy out the lease or if a future homebuyer needs to take over the contract.
• Always ask for access to a monitoring app or online dashboard. That way, you can track your system’s production and spot any performance issues early on.
• Research the solar company’s reputation. And ask the right questions — because often, how they answer will tell you a lot about how they operate.
• Read your lease contract like it’s your mortgage. Because in many ways, it kind of is. You’re committing to 20–25 years of payments, so read every page, ask every question, and make sure you know exactly what you’re signing up for.

What Happens If I Stop Paying My Solar Lease?

Bear in mind that a solar lease is a legal contract. If you stop making payments, the solar provider may take the following steps:

• Notice of Default: Like any financial contract, you’ll likely receive warning notices if payments are overdue.
• System Deactivation: The solar company may deactivate your system, cutting off access to solar energy.
• Legal Action or Collection Efforts: In severe cases, the solar provider could pursue legal action or report the missed payments to credit agencies.
• Removal of Equipment: The provider may also remove the system altogether if payments remain unresolved.

Final Words on Solar Leasing

At the end of the day, solar isn’t one-size-fits-all. While the general opinion (mine included) is that buying panels outright is the better route, I also think solar leases can still work in certain circumstances (and they have for many homeowners).

What matters is that you fully understand the agreement you’re getting into. The pros, the cons, and how it all plays out over time. If you do that, you’ll have a solid grasp on what to expect and be less likely to run into surprises.

But if you’re still unsure, feel free to contact us at Avail Solar. We’ll help you sort through the details, look at your situation clearly, and guide you toward a decision that gives you the best shot at making solar work in your favor — financially and practically.

For many homeowners, the biggest question isn’t whether solar works — that’s been proven for years — but whether it’s an investment that truly pays off… How long will it take to break even? How do those savings play out? And in the end, how much more will you actually gain from solar? In this article, I’ve explained what solar ROI really means, what numbers you can expect, and how to calculate your solar payback period and ROI so you can better understand your investment.

What is Solar Payback Period?

When people talk about solar ROI, they often refer to the payback period as well. Both are related, but they’re not quite the same.

Payback period is the time it takes for your solar system’s energy savings to cover its initial cost. Think of it as the financial “breakeven point”.

For example, if your solar installation costs $18,000 and you save $1,800 per year on electricity, your payback period would be 10 years (18,000÷1,800). After that, every dollar you save is basically profit.

On average, homeowners in the U.S. experience a solar payback period of 8 to 12 years.

That may sound like a while, but consider this: Solar panels are designed to last 25 years, and many units still produce over 80% efficiency well beyond that.

That means your system could keep generating energy for another 10 to 15 years after you’ve already paid it off — 10 to 15 years of essentially “free” energy and pure savings.

The payback period won’t be the same for everyone, though. It depends on factors like your system’s size, electricity rates, sun hours in your area, and available incentives or rebates.

We’ll have some sample calculations later on.

What is Solar ROI?

Return on Investment or ROI measures the overall profitability of your solar system. It shows you how much you’ll gain over the system’s entire lifespan.

That said, the payback period, which only tells you when you break even, is really only half the picture.

In the U.S., a typical solar panel system delivers an ROI of around 10% per year.

If we compare it with other common investments most homeowners make, solar is often just as good — or even better — in terms of returns, which is impressive:

Of course, ROI varies just like the payback period does. Let’s break down some calculations shortly to see how these numbers can change.

How to Calculate Payback Period and Solar ROI

Calculating Solar Payback Period

Calculating your solar payback period follows this simple formula:

Payback Period = (Total Solar Cost – Incentives) / Annual Savings

Let’s say we have these numbers to work with:

• Total Solar System Cost: $20,000
• Federal Tax Credit (30%): -$6,000
• Annual Energy Savings: $2,000

Payback Period = ($20,000 – $6,000) / $2,000 = 7 years

After 7 years, your system will have paid for itself. From there, you’ll continue to enjoy reduced (or eliminated) electricity bills for the remaining lifespan of your solar panels.

Calculating Solar ROI

Basic ROI can be determined using this formula: 

ROI (%) = (Net Profit / Total Investment) x 100

Your net profit is the total savings you generate minus the cost of the system. Let’s take these sample numbers to be true for your case:

• Total System Cost: $18,000
• Federal Tax Credit (30%): -$5,400
• Net System Cost: $12,600
• Annual Energy Savings: $1,800
• System Lifespan: 25 years

Based on those figures, your total savings would be $45,000 ($1,800 x 25 years). And your net profit would then be $32,400 ($45,000 – $12,600).

Plugging those numbers into our formula earlier, your ROI would be:

ROI (%) = ($32,400 / $12,600) x 100 = 257%

In this scenario, your solar system pays for itself in just 7 years (using our payback period formula in the last section). And over its lifetime, you gain over 2.5 times your initial investment in savings.