Sunrun payment plans: a no-nonsense guide
What do Sunrun’s Brightsave Monthly, Brightsave Prepaid, and Brightbuy really mean? Here’s a guide that decodes these in simple terms.
With about 255,000 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.
When you go to sunrun.com, you’ll be given a breakdown of their 4 different solar payment plans. You’ll notice that they steer homeowners toward their leasing plan called Brightsave. While it’s possible to go the traditional route and have run Sunrun install a system that you purchase outright, their marketing is definitely slanted toward the no-money-down approach of leasing.
But even if you go with a lease, Sunrun has two options of a monthly lease and a prepaid “full amount lease”. What do these mean, and which is best for you?
Little confusing, I know. But have no fear! Read on to learn what these payment plans really mean. Before we do that, let’s start with a crash course on what a solar lease is.
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 many 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.)
Read our guide on solar financing to learn more about lease agreements and power purchase agreements, which are closely related.
Sunrun payment plans
Alright, now that we’ve explained the basics of how solar leases work, let’s talk about what Sunrun offers.
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 requiements may be less stringent than those required to get favorable loan terms.
You’ll notice in the screenshot above that Sunrun has a big blue “Recommended” label around Brightsave Monthly. This is because a lease agreement makes more money for Sunrun than if you buy the system from them.
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.
However, if you have enough cash on hand for a prepaid lease, you could simply buy the system with cash, or use a combination of your saved cash plus a loan for the remaining balance. I can’t think of a situation where it would be better to choose a prepaid lease over an outright purchase.
And remember: even though you’ve made a big upfront payment, it’s still a lease. The company will own the system, not you.
With Brightbuy, you’re paying cash for the system, and you 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.
Brightadvantage is Sunrun’s financing option. Basically, you buy the system outright from Sunrun, and they also provide loan financing.
If you need a loan, go ahead and get a quote on Brightadvantage, but be aware that there’s really nothing special about a “solar loan”. In fact, your first choice should be a conventional loan product from your bank, such as a home loan or HELOC. You will likely get more favorable terms with a secured loan from a conventional lender than you would with a solar loan.
Read our guide to solar financing to learn more, including gotchas with solar loans from companies such as Mosaic.
If you go with a loan, remember to do price comparisons like you would with any other product, and get quotes from multiple lenders.
In Sunrun’s summary of their solar plans, there are a few terms that require some explanation.
Rate increase protection
This one deserves special attention because it can be misleading. What Sunrun refers to as rate increase 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 2019 is 30% 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:
- Brightbox Monthly or Brightbox Prepaid: Sunrun keeps all incentives
- Brightbuy, brightadvantage (or purchase from other installer): 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:
- Brightbuy: you buy the system outright and keep all the incentives. Be sure to compare quotes from other installers.
- Brightadvantage: 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.
- Brightsave Monthly: 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.
- Brightsave Prepaid: 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.
Be sure to read the reviews of Sunrun on BBB.org before making a decision. While you’re at it, take a look at our review of Vivint Solar, which is another large provider of solar leases/PPAs in the United States. Unlike Vivint Solar, there is no pending lawsuit against Sunrun that we know of, but the complaints on BBB.org about Vivint Solar and Sunrun are similar.