Don’t Buy Solar Panels Until You Watch This
May 9, 20267 Solar Mistakes That Will Cost You $20,000
May 9, 2026When a solar salesperson presents you with a lease, they’re showing you a monthly payment that looks attractive. What they’re not showing you is what you give up over 25 years — specifically in New Jersey, where the financial gap between owning and leasing is larger than in almost any other state.
The headline number: On a 10kW NJ system, leasing instead of buying costs you approximately $15,300 in SuSI SREC-II income over 15 years — income the leasing company keeps because they own the system. Add the annual payment escalator (1–3%/year on most leases), and the total 25-year difference between an owned system and a lease can reach $20,000–$30,000 for a NJ homeowner.
What Ownership Means for a NJ Homeowner
When you own your solar system — whether you pay cash or finance it — you are the system owner on record. That means:
- You collect all NJ SuSI SREC-II income ($85/certificate, one per MWh of production, for 15 years)
- You receive the full utility bill savings through net metering
- You own an asset that increases your home’s resale value
- You have no ongoing payment obligation after the loan is paid off
What a Lease Actually Is
A solar lease means the installer owns the system on your roof. They install it, they maintain it, and they collect any state incentives tied to system ownership — including your SuSI SREC-II income. In exchange, you pay them a monthly fee (lower than your current electric bill initially) and your bill from the utility drops.
What the salesperson emphasizes: lower monthly payment, no maintenance responsibility, professional monitoring.
What the salesperson doesn’t emphasize: you’re renting a piece of equipment on your own roof for 20–25 years, you’re forfeiting $15,300+ in SuSI income over 15 years, your monthly payment escalates 1–3% per year, and when you sell your home the lease is a liability not an asset.
The SuSI Math: Why Leasing Costs NJ Homeowners More Than Other States
NJ’s SuSI program is what makes the lease-vs-buy gap particularly large in this state. Here’s the specific math:
A 10kW system in NJ produces approximately 11,000 kWh/year = 11 SREC-II certificates/year. At $85/SREC-II (the current NJ residential ADI rate, fixed for 15 years): $935/year × 15 years = $14,025 in SuSI income.
When you lease, every dollar of that $14,025 goes to the leasing company, not to you. They own the system. They registered it in GATS. They collect the quarterly SREC-II payments. You get a discounted electricity rate.
Now add the annual escalator. A lease starting at $130/month with a 2%/year escalator grows to $160/month by year 10, $188/month by year 15, and $220/month by year 20. At the same time, your utility rates are rising — meaning the discount that made the lease attractive in year 1 narrows significantly over time, and may disappear entirely by year 15–20.
The Home Sale Problem
I’ve personally seen home sales complicated by solar leases in Hamilton, Toms River, and Woodbridge. Here’s what happens:
You decide to sell your home. Your real estate agent lists the home with “solar included.” The buyer’s mortgage lender runs title. The solar lease shows up as an encumbrance — a financial obligation attached to the property. The buyer must either:
- Assume your lease — which requires the buyer’s approval, their lender’s approval, and the leasing company’s approval. Not all lenders accept leased solar encumbrances. Some deals fall through at this stage.
- Require you to buy out the lease before closing — at a buyout price that depends on the system size, remaining term, and the leasing company’s formula. Buyout costs commonly run $10,000–$25,000 depending on where you are in the contract.
An owned solar system, by contrast, is a home improvement. Studies consistently show solar adds $3–$4/watt to home sale price — a 10kW system adds $30,000–$40,000 in appraised value. A leased system adds little to appraised value and may actively complicate the sale.
When Does a Lease Make Sense?
Honestly, rarely for NJ homeowners. The strongest case for a lease:
- You have no federal tax liability (so a tax credit would help you but you can’t use it — this was more relevant pre-2026, less so now that the residential ITC has expired)
- You plan to move within 5–7 years (though the home sale problem still applies)
- Your credit score makes a solar loan very expensive (7%+ interest)
Even in these cases, a well-structured solar loan usually beats a lease over 10+ years. The only scenario where a lease is clearly better than ownership is if you genuinely can’t qualify for financing and a cash purchase is impossible — and even then, a lease is a last resort, not a first choice.
Solar Loans: What to Know
A solar loan lets you own the system while paying it off over time. Most NJ solar loans are 10–25 year unsecured consumer loans with rates typically ranging from 5.5% to 9.9% in 2026, depending on credit score and lender.
Key considerations for NJ solar loans:
- Dealer fees: Many solar loans are originated through the installer, who charges the lender a “dealer fee” (10–30% of the loan amount). This fee is embedded in the loan — you’re paying it through the interest rate, not as a separate charge. It’s why “0% financing for 18 months” solar loans often have catch-up balloon payments or high rates after the promotional period. Ask for the dealer fee explicitly.
- Loan term vs. payback period: A 10-year loan at 7% on a $27,000 system costs approximately $313/month. Your annual solar benefit ($3,135/year) works out to $261/month. For the first 10 years, your loan payment exceeds your annual benefit — you’re cash-flow negative. After the loan pays off, your benefit becomes pure income. This is normal; the investment still works over 25 years.
- Cash purchase: Still the cleanest financial calculation. No interest, no dealer fee, highest net present value over 25 years. Not everyone has $27,000 available, but if you do, cash purchase simplifies the math significantly.
PPA (Power Purchase Agreement): Another Version of the Lease
A PPA is similar to a lease but instead of a fixed monthly payment, you pay per kilowatt-hour for the electricity your panels produce — typically at a rate below your utility rate. The system is still owned by the solar company. You still forfeit SuSI SREC-II income. The annual escalator still applies. The home sale complication still applies.
In NJ, PPAs have the same fundamental problems as leases: you’re surrendering long-term financial control of a 25-year asset on your own roof in exchange for a discounted electricity rate in the short term. For most NJ homeowners, this trade is unfavorable.
Frequently Asked Questions
Is a solar lease ever a good idea in New Jersey?
Rarely. The combination of NJ’s SuSI SREC-II program ($85/SREC-II for 15 years) and full retail net metering creates a very strong ownership case. The SuSI income alone — approximately $14,000–$15,000 on a 10kW system over 15 years — goes to the leasing company when you lease. For most NJ homeowners who can qualify for financing, owning is significantly better financially.
What happens to my solar lease if I sell my home in NJ?
You must either transfer the lease to the buyer (requires their agreement, their lender’s approval, and the leasing company’s approval — not guaranteed) or buy out the remaining lease obligation, which typically costs $10,000–$25,000 depending on remaining term and system size. An owned system adds clean resale value; a leased system creates a potential obstacle to closing.
How does a solar loan compare to a lease?
With a loan, you own the system, collect SuSI SREC-II income, and have a fixed payment that ends when the loan is paid off. With a lease, the installer owns the system, collects SREC-II income, and your payment escalates annually. Loans require credit qualification and involve interest costs, but the 25-year financial outcome for NJ homeowners is almost always better with a loan than a lease.
How much is NJ SuSI SREC-II income worth over 15 years?
At $85/SREC-II and approximately 1 certificate per MWh of production: a 9kW system earning 9.9 SRECs/year collects $841.50/year × 15 years = $12,622. A 10kW system earning 11 SRECs/year collects $935/year × 15 years = $14,025. A 12kW system: $1,122/year × 15 years = $16,830. This is income the leasing company keeps when you sign a lease.
What is the difference between a solar lease and a PPA?
A lease charges a fixed monthly fee regardless of system production. A PPA charges per kilowatt-hour the system actually produces — if it’s a cloudy month, you pay less. In practice, both involve the solar company owning your system, collecting your SuSI SREC-II income, and charging an escalating rate over 20–25 years. The structural problems with both are identical for NJ homeowners.
