Buying Out Your SunPower Lease

Buyout or Lease? 

Let’s break down your options.

You may have received a notice recently, or may receive one soon, from SunPower about the option to buy out your solar lease and take ownership of your solar installation. Each option has its advantages, and we want to make sure you have the information and tools to make an educated and personalized decision. As always, we’re here if you have questions or want us to help you crunch the numbers.

If you haven’t yet received your early buyout quote from SunPower, please reach out to them directly.

You can email leasebuyout@sunpower.com and homesale@sunpower.com to request your quote.

Advantages to buying out your lease

1. You can pay in cash or finance your buyout — either way, there’s the potential for savings.

Paying in cash will result in additional and more immediate savings. This is how the math worked for one customer with a current lease payment of $97/month. They have the option to either buy out their lease or continue monthly lease payments for 14 more years. If they continue with lease payments, the sum of the remaining payments would be $16,296. If they choose to buy out the lease with cash now, the total cost will be $7,000 — a savings of $9,296.

If you choose to finance your buyout through a VSECU loan, you’ll almost certainly lower the amount of your monthly payment. This is how the math worked for that same customer using a financing option. Taking out a 12-year loan for the $7,000 buyout, at 5.65%, their monthly loan payment would drop to $67.05 per month, a difference of about $30 per month as  compared to their lease payment of $97 per month. The sum of their loan payments over the 12-year term would be $9,655.20, a savings of $6,640 compared to the $16,296 sum of remaining lease payments.

To better understand the savings opportunities with your specific buyout offering, you can click here to use VSECU’s loan calculator. Enter the following:

• Purchase amount: Your Early Buyout Quote amount from SunPower
• Down payment amount: $0
• Loan term: 5 years (60 months), or 12 years (144 months)
• Interest rate: 5.15% for 5 years, or 5.65% for 12 years

Note: if you have prepaid for your lease, a buyout is not likely to be financially beneficial.

2. It may be easier to sell your home, and your home’s value will increase.

When you buy out your lease and own your panels, your solar system becomes part of the overall value of your home. So, when you put your house on the market, the value of your panels can be factored into the sale price of your home.  A leased system also increases home value, but studies show the increase is less than for a purchased system.

If you sell your home while leasing your panels, your lease will need to be transferred to the new homeowner. We can help you with this, but it will just be one more step to the home-selling process.

Click here to read more about how solar can increase your home’s value.

3. Your existing product warranties will still be valid.

Your inverter is warrantied for 10 years, and the panels have a product warranty of either 10 years or 25 years, depending on when your system was installed. This won’t change if you buy out your system. (You would also keep your monitoring system, though it is not warrantied.)

Advantages to continuing with lease payments

1. You’ll have more coverage if anything goes wrong.

Maintenance on your system is not always covered if you choose to buy out your system. If you continue your lease payments, SunPower will cover the cost of most maintenance.

2. You won’t be responsible for replacing equipment.

Even after your product warranties expire, you won’t have to replace equipment while you’re leasing. Inverters, as an example, are likely to fail after 10-15 years. Replacing an inverter currently costs $2,000-$3,000; however, under a lease, a failed inverter would be replaced at no cost to you.

3. You’ll still be eligible for the Power Production Guarantee.

If your solar system does not meet its estimated annual production as defined in your lease agreement, you’ll continue to receive a reimbursement check at the end of the year. If you choose to buy out your lease, however, this guarantee goes away.

In summary, buying out your lease is likely to save you money over the long run, while continuing with lease payments gives you more coverage.