Leases are offered by financing providers such as Spruce Finance, One Roof Energy, SunPower, SunRun and Sunnova as a way for homeowners to enjoy the benefits of going solar, without having to worry about the upfront cost, or the operations and maintenance issues associated with solar ownership.
In a lease the homeowner may make an upfront payment, and then will have a monthly payment for the duration of the lease agreement. Since in a lease the homeowner does not own the system, the input parameters are limited. Here is how to model it:
- Go to your account Settings. Click on Financing Templates then Create New Template. Give your template a descriptive name that you will later be able to understand.
- In the Basic Information section, click on Lease.
- Click on the pencil icon to input your Project Useful Life and your Discount Rate (we chose 25 years and 3.0%).
- Input your Degradation Factor (we chose 0.5%).
- Input the Lease Upfront Payment (we chose $5,000).
- Input your Monthly Lease Payment (we chose $150).
- Input your escalation rate (we chose 2.9%).
- Lock your immutable fields.
We highly recommend you lock fields that will not change between different designs. This will save your team time and reduce errors.
To learn more about modeling leases please review this video: Creating PPA and Lease Financing Options.