tesla solar renting

Tesla’s solar rental program: what you need to know

Tesla discontinued the solar rental program it initially launched in 2019. The program was a return to Tesla’s SolarCity roots, with a unique twist on the product that made SolarCity the leading national installer of solar prior to its acquisition by Tesla. Learn more about other options for going solar with Tesla here.

NOTE: The Tesla solar rental program is no longer available.

How did Tesla’s solar rental program work? 

Generally speaking, there are two primary methods for financing solar: customer-owned or third-party owned. In a customer-owned installation, you purchase your panels outright either with an upfront purchase or with a solar loan. With a third-party-owned installation, a solar company installs solar panels on your property and retains ownership of the equipment, while you make a monthly payment for the solar power produced by the panels. 

Tesla’s solar rental program was a new twist on the traditional third-party ownership agreement. Instead of signing a 20-year contract for a solar $0-down lease or a power purchase agreement (PPA), the Tesla solar rental program allows you to install solar with no upfront cost, and with no long-term contract commitment. 

The Tesla solar rental program offered customers in six states–Arizona, California, Connecticut, Massachusetts, New Jersey, and New Mexico–three, pre-set options for installing solar on their homes:

  • A small, 3.8 kilowatt (kW) installation for $50 per month;
  • A medium, 7.6 kW installation for $100 per month;
  • And a large, 11.4 kW installation for $150 per month (note these costs are higher for California residents). 

For a size reference, in 2018, the average system size installed in the US was 7.6 kW (according to SEIA), while the average EnergySage solar shopper received quotes for 9.6 kW systems

When first introduced, Tesla included a $1,500 solar panel removal clause. However, they updated the terms of the rental program to remove that cancellation fee, meaning the rental program truly has no long-term commitment.

Why did Tesla introduce the rental program? 

The rental program was a shot in the arm for Tesla’s struggling solar business. Since acquiring SolarCity, which was once the largest residential solar company in the US, Tesla has slowly been phasing away from the solar market. In fact, Tesla’s quarterly solar installations dropped from 93 megawatts (MW) in Q3 2018, to 73 MW, to 47 MW, and, finally, to 29 MW in Q2 2019.

This came about as Tesla moved away from traditional residential solar marketing practices, quickly introduced solar purchasing to their electric vehicle stores, and then moved the entire solar business online. The Tesla solar rental program has the potential to make solar more accessible to a wide group by pairing no upfront cost with no long-term contract. 

Did the Tesla solar rental program save homeowners money? 

The short answer: yes, but not as much as you would save by owning your own solar panels (a fact that Elon Musk has acknowledged in the press since the rental program’s launch). The longer answer? It depends. 

The amount of money you could save with the Tesla solar rental program primarily depends on where you live, which influences two key factors: solar electricity production and the price you pay for electricity. The amount of electricity produced by solar panels varies dramatically across the six states where the Tesla solar lease program is available, with the same size solar system producing nearly 40 percent more electricity in New Mexico than in Massachusetts, according to PVWatts data.

Given that the monthly cost of rental solar panels is the same in New Mexico and Massachusetts, a solar shopper would receive more bang for their buck from a production standpoint in the Southwest than in the Northeast.

The other key component of determining whether the Tesla solar rental program can save you money is how much you pay for electricity. Solar saves you money by helping you avoid a portion (or all) of your electricity bill. Since the cost of electricity varies across the country, it’s not only important to know how much electricity your panels will produce but also how much you would have paid for electricity if not for your solar panels. 

For instance, although you would receive more solar production for the same price in New Mexico than in Massachusetts, the cost of electricity is much higher in the Northeast. As a result, the savings from the rental program–i.e., the cost of purchasing electricity from your utility versus the monthly cost of the rental–might actually be higher in Massachusetts, even though the panels produce less electricity.

Although Tesla no longer includes a panel removal fee, if they were to re-introduce it at a later date, here is how to calculate how much you could save by joining the program: if you stand to save an average of $30 per month from the solar panels, or $360 per year, you’d need to keep the solar panels for about five years to ensure that you break even (by saving enough on electricity bills to offset the cost of the panel removal fee.)

Considerations for the Tesla solar rental program

There are a number of key questions we encouraged homeowners to ask before participating in the Tesla solar rental program: 

1. What solar equipment is used? 

There is a wide variety of quality and performance across solar panels, which, accordingly, come at different price points. Knowing what equipment is being installed on your roof may help you determine whether you’re getting a good deal, as well as the likelihood that the panels will continue performing for a long time.

2. Are you okay not receiving the ITC and other incentive benefits?

 One great aspect of owning your own solar panel system is that you receive the full benefit of the solar investment tax credit (ITC), as well as checks in the mail for any rebates or performance-based incentives in your state. In this case, Tesla receives those credits since they own the system.

3. Will your monthly costs to rent increase in the future? 

Early looks at the Tesla contracts indicate that they can increase the monthly cost of the rentals in the future. It’s important to know how frequently and by how much they can increase your monthly cost; this will help ensure that you don’t end up paying more for solar than you would for electricity from the grid in the future.

Other options for going solar

The Tesla solar rental program was a very interesting, unique new twist on the old third-party ownership model that allows people to go solar without putting down any money upfront. These days, however, third-party ownership is not the only way to go solar while paying zero down.

In fact, over the last couple of years, solar loan providers have begun to offer $0 down payment loan options for financing solar. Interested in owning solar, but prefer not to pay for the panels upfront? Register for a free account on the EnergySage Marketplace to receive custom solar quotes from local solar companies.

Save money on your electric bill with community solar

Community solar is a great way to save money compared to rooftop solar. By joining a solar farm project in your area, you can actually save 15 percent on your electricity bill by receiving credits. With community solar, most subscriptions involve no upfront cost, guaranteed savings, and allow you to cancel anytime without any penalty fees. Visit our marketplace to find a participating solar farm near you.

Posted on by .
Categories: Solar Financing
Tags: ,

About Spencer Fields

Spencer is the Manager of Market Strategy & Intelligence at EnergySage, where he's able to showcase his expertise around all things energy. Prior to joining EnergySage, he spent five years at Synapse Energy Economics, providing environmental, economic and policy analysis for public interest groups. Spencer has degrees in Environmental Studies and Hispanic Studies from Brown University, meaning when he's not in the office you can find him outside or traveling somewhere to work on his Spanish.

7 thoughts on “Tesla’s solar rental program: what you need to know

  1. June Steiner

    I have a contract with tesla for solar rental. I have been
    Calling, leaving messages for months trying to get panels to work via wifi issues. They send ud a wifi connector 3 or more months ago and said that would fix the problem. It didn’t. We can’t teach them by phone and they ignore emails. We have been paying for at least 6-8 months of rent with no use of our solar.
    How do we stop payment as we have to reach them to do that. Or how do we get the help we need? . I am extremely frustrated and feel taken advantage of big time.

  2. Ron Kurrle

    I Have a Solar city – solar panels(Now Tesla) However I need the 17 page power agreement. With Solar city merged with Tesla I need this to refinance my home or to sell it. Please send me the agreement.

  3. AJ M

    Hi Robert, I concur with Larry.. When you make arrangements for the audit make sure to ask if they can do a “Blower Door” test. They hook up a blower door and seal it and then pour some liquid smoke (harmless) into the airstream and wait unit it starts finding holes and coming out, that will tell you where you are losing heat/cooling and get those areas sealed up. Insulation is always a good idea, them more the better. Also, another idea but not sure what type of roof you have – but if you have tile, you can have them sprayed with a product called “Insuladd” developed by a nasa engineer. You can mix it in your paint for the exterior of the house and change the color to match the tiles so it blends in.. I used it on my truck camper and it brought the heat load down significantly.. You can get it on ebay.

  4. larry

    you need to start with an energy audit to fond out where and why your using so much. it might be better to have more insulation in your attic, fix leaky doors and or windows. then when those are explored or corrected then think about solar.

  5. Robert

    I’ve been in a “Sun City” lease for about 6-7 years. Does Elon Musk’s program consider those with existing solar panel agreements with other company’s? My concern is this. We are retired, on a fixed income. We have a “Medallion” All Electric Home built in 1985. I hate the fact that I even opted to buy ALL ELECTRIC… very, very expensive in California. Due to our usage, we required 32! Yes, 32 panels to accommodate our thirsty energy deficient home. My wife and I are very frugal. We don’t even use the A/C but on very humid days. No pool, use a wood burning stove 75% of the time in the winter. Our meager home is 1400 square feet and STILL, our energy cost’s are through the roof. We decided to “Panel Up” with some out of pocket money. Our initial power bills when the kids were home could run up, and over, $500 a month! We live in the desert so our yard is very low maintenance. Unbelievable! Yet our neighbors with gas AND electric, using MORE electric grid energy coupled with gas spend below $250 per month, and even less. Some folks around here have monthly utility bills ranging from $125 – $175 per month. ELECTRIC IS A RIP OFF… IMHO. Now that I’m retired with half my annual income, it’s imperative for me to find savings. Our electric bills are now about $300 per month, increasing each year through the lease arrangement. How could Elon Musk’s system and program be of any help to us? Thank you for any considerations to reply.


Leave a Reply

Your email address will not be published.