Sunrun payment plans: a no-nonsense guide
What do Sunrun’s Monthly Lease, Full Lease, Purchase and Monthly Loan options really mean? Here’s a guide that decodes these in simple terms.
With about 573,000 total customers, Sunrun is the largest solar installer in the United States. This means that if you’ve been shopping around for a solar installer, there’s a very good chance that you’ve come across Sunrun.
If you’re learning about Sunrun for the first time or maybe considering using them to install your solar panels, be sure to read our Sunrun review first, which gives a comprehensive breakdown of the company and their products.
When you go to sunrun.com, you’ll be offered a list of their 4 different solar payment plans. Sunrun previously used the confusing “Bright” label for their lease, loan, and purchase products: Brightsave Monthly and Brightsave Prepaid for their loans or PPAs, Brightadvantage for their loan, and Brightbuy for their purchase option.
If you think that’s confusing, you’re not the only one. Sunrun recently simplified their branding to make these financing options more clear:
|Old name||New name|
|Brightsave Monthly||Monthly loan|
|Brightsave Prepaid||Full lease|
Keep reading to learn about each of these payment options and which one might be best for you.
Sunrun really wants you to take a lease or PPA
When you go to Sunrun.com, you’ll see the following list of payment options:
You’ll notice that this page steers homeowners toward the monthly leasing plan, which they give the friendly and casual label “Customer’s fave”. (Is it really their “fave”? Or is it Sunrun’s?)
Solar leases and closely related power purchase agreements are similar financing products. With both, you don’t own the solar panels but pay the solar installer a monthly fee for their usage.
The pitch to consumers is that you get your solar panels for no money down - sometimes pitched as “free” by less scrupulous sales people, but the hidden trap is that you can sometimes end up paying more for electricity in the long run.
Solar leases in a nutshell
Leasing a home solar system is a lot like leasing a car. You get to use the solar panels, but you don’t own them. Instead, you pay a monthly leasing fee to the solar company.
With a lease, the solar company installs the equipment on your home, just the same as if you bought the system outright, but the company retains ownership. Your home get to use the solar electricity generated, and draws any extra power it needs from the grid, for which you pay the utility company. Whether or not net metering is available depends on the state and your utility. Sunrun, or any other leasing company, has no control over that.
This is an important point worth emphasizing: with a solar lease, you still get a utility bill for any grid electricity you use, plus a second monthly bill for the leasing fee from the solar company (unless you go with a prepaid lease).
Depending on the leasing company and your credit rating, this type of agreement often requires no money down, which is why it’s sometimes referred to as “free” solar panels.
In the long run, you won’t save as much money with a lease versus buying the solar system outright, but your net utility bill should go down. Be very careful, however: it’s actually possible to pay more for electricity with leased solar panels than if you had never installed solar panels.
This is because most solar lease companies include an escalator clause in the contract that automatically increases the payments every year.
For example Vivint Solar, another company that does this type of financing agreement, has been known to automatically increase the payment by 2.9% every year. Over the course of a 20 year contract, this can have a major negative impact on your costs. (Read more about Vivint in our in-depth blog post.) Sunrun has also been known to include a 2.9% escalator in their contracts.
For an indepth look into this topic, read our guide to solar leases and PPAs.
Sunrun payment plans
Alright, now that we’ve explained the basics of how solar leases work, let’s talk about what Sunrun offers.
Sunrun Monthly Lease
This is Sunrun’s basic lease agreement. If you choose this route, you will sign a contract that spells out key details such as the monthly fee, the downpayment, any annual increase in fees (aka. the escalator), and the lease term. (Be sure to read our guide for a full list of questions to ask.)
The main advantage of this plan is that you may not need any upfront payment. This means that if you don’t have the cash to buy your system and don’t have good enough credit to get a loan for reasonable terms, a solar lease can help you get solar panels. Keep in mind that you will probably still need to pass a credit check to qualify for the lease, but the credit requirements may be less stringent than those required to get favorable loan terms.
Sunrun Prepaid Lease
With a prepaid lease, instead of doing monthly payments, you pay the entire lease amount in one shot upfront. This type of single-payment lease is also common with car leases. The advantage is that you will usually pay less in total than you would with a monthly lease fee.
In many ways, a prepaid lease is the worst possible choice. This is because you need to have enough cash on hand to pay the entire lease in one shot. But if you have enough money to do that, you’re almost certainly better off purchasing the system outright and owning the system. This gets you the federal tax credit, which is currently 26%. You may have state and local incentives too.
With the lease, you don’t own the system and don’t get the incentives. The only possible situation where this might make sense is if you don’t owe enough federal tax to benefit from the credit, as is sometimes the case for retired persons.
Otherwise, a prepaid lease is usually going to be your worst option.
Sunrun Full Purchase
With a full purchase, you’re paying cash for the system and will own it. It‘s the same as buying a solar system from any one of the thousands of solar installers in the United States. It’s possible that Sunrun could get you lower pricing because of the volume they deal with, but you should definitely get quotes from multiple installers.
Sunrun Monthly Loan
With this option, you’re buying the system and owning it, but taking out a loan from Sunrun to finance the purchase. It’s like buying a car and getting a loan from the car company at the same time. It has the same advantage as a full purchase because you will keep all the incentives.
Keep in mind that if you need a loan to buy your solar system, there’s no reason why you need Sunrun to provide it. You could just as easily go to your bank for a conventional loan product, such as a home loan or HELOC.
In fact, this should be your first choice. There are also many online loan quote services such as Bankrate and Lending Tree that make it easy to get multiple quotes on a loan. Basically, you should treat a loan as you would any other product. Shop around to get the best price.
While shopping you might come across offers for solar loans. Most of the time, these loans are unsecured, which means that you will usually end up paying more than you would with a secured loan such as a HELOC.
Read our guide to solar financing to learn more, including gotchas with solar loans from companies such as Mosaic.
In Sunrun’s summary of their solar plans, there are a few terms that require some explanation.
Rate hike protection
This one deserves special attention because it can be misleading. What Sunrun refers to as rate hike protection is not actually protection from increases on your electricity costs.
Instead, what it is “protection” from is unpredictable utility rate increases. What Sunrun does is make your electricity price increases predictable with fixed increases that are spelled out in the lease agreement. In other words, your price of electricity will definitely go up year-to-year, but Sunrun’s pitch is that it’s better to know what the increases are ahead of time.
This is called an escalator clause and will be different for each customer, so be sure to read the contract carefully.
A writer for Bloomberg said that their Sunrun escalator clause was 2.9% per year. Toward the end of a 20 year lease agreement, that 2.9% annual increase will end up being a substantial increase on your electricity bill.
In the best case, that 2.9% increase will be less than the increases your utility company would have levied, but it could easily be more - meaning that it’s completely possible to end up paying more for electricity than if you never went with a solar lease.
With a lease, the solar company is responsible for any repairs. On one hand, this is great because you aren’t responsible for paying for repairs.
However, if the system breaks, it won’t be generating any electricity, but you’ll still have to make lease payments while you wait for the repair. There are stories of Sunrun customers waiting weeks for repairs on their systems while dealing with unsatisfactory customer service. Read these Better Business Bureau complaints to see these in detail.
Depending on your contract, Sunrun may also include such benefits as monitoring and cleaning. However, be aware that any home solar energy system you buy today should have real-time energy monitoring you can access from your phone. Also, solar panel cleaning isn’t something that most people should worry about, nor is it a service that most should pay for. Most people shouldn’t need to clean their panels, but here’s a guide on how to do it yourself.
Not mentioned: who gets the incentives
In their explanation of their four solar payment options, Sunrun makes one glaring omission: who receives the incentives?
Anywhere in the United States, you will receive the federal tax incentive, which in 2021 is 26% of the total system costs. That’s a substantial rebate, but you will only get it if you own the system. If you lease, Sunrun receives the incentive, not you.
That’s a big part of their business model, which is why it isn’t mentioned.
In addition, there are many states, utilities, and local agencies that offer additional rebates on top of that, and these can be huge. For example, in New York state, a state tax credit and an additional rebate from NYSERDA means that the final price of the system will be almost 1/3rd the gross price before rebates.
That’s huge. But you won’t get that if you go with a lease or PPA agreement. To summarize:
- Monthly Lease or Prepaid Lease: Sunrun keeps all incentives
- Monthly Loan or Full Purchase: You keep all the incentives
Which should you choose?
The bottom line is that most people should buy their system if they can, but there are a few cases where a lease is your best option. Use this simple flow chart to help you decide:
Sunrun purchase plans summarized
Sunrun’s financing products are a little confusing because of the names they give them, but basically it comes down to a lease vs purchase. Here’s a brief cheatsheet:
- Full purchase: you buy the system outright and keep all the incentives. Be sure to compare quotes from other installers.
- Monthly loan: you buy the system outright with a loan provided by Sunrun, and keep all the incentives. Be sure to compare quotes from other installers PLUS quotes from other loan providers.
- Monthly lease: this is a monthly solar lease. Sunrun keeps the incentives. If you can’t get decent loan terms, this might be your last, best option.
- Prepaid lease: Yeah, don’t do this. If you have enough cash on hand to prepay the lease, you should buy the system instead, and get a small loan if necessary to cover any balance. A prepaid solar lease is a bad idea.