In part, the recent rise in grid-tied residential PV systems can be credited to the availability of leasing plans, which allow little or no money down on a PV system. A third-party solar-leasing company can reduce your upfront cost, while keeping your electricity costs about the same as before the installation.

The rates you pay for electricity are locked in for a decade or more—a period of time in which the system is monitored (and guaranteed) to produce a certain amount of energy. These plans are profitable for the leasing company, because it immediately pockets rebates and tax credits—while providing income and over time depreciating the value of the system (which they own and you rent).

It’s somewhat similar to leasing an electric car, which has a lower monthly payment because the dealer applied the incentive to the cost basis. In general, PV system leasing (which involves finance charges) makes more sense for people with high energy bills and heavy EV use.

However, EV owners can cash in on incentives by buying the PV system outright or financing it themselves through personal loans, construction loans, or mortgages.