What is a capital lease?
A capital lease allows you to own the system benefits while spreading costs over time.
In a capital lease, the lessee (the party leasing the solar system) becomes entitled to valuable benefits including tax deductions, Solar Renewable Energy Certificates (SRECs), and electricity savings. Because the lessor (owner) does not receive these tax benefits, the monthly payment for a capital lease is typically higher than an operating lease.
Capital leases are attractive for organizations that can utilize tax credits and environmental attributes, as they provide both immediate operational savings and long-term incentive value. However, the higher monthly cost means it's important to evaluate whether your tax situation supports capturing these benefits before choosing this financing structure.