Money, contracts and financing
Solar leasing
Also known as: solar finance lease, photovoltaic leasing.
Definition
Solar leasing is a finance lease in which an institution buys the system and leases it to you, with a purchase option at the end. It allows installation with no up-front outlay and has accounting advantages for companies.
Sources: Ley 1715 de 2014 (Renewable Energy Law) (opens in a new tab)
The difference from a PPA is fundamental. In a lease you pay instalments for the use of the asset, with a purchase option at the end that is normally exercised; in a PPA you pay for the energy the system delivers. In a lease the output risk is yours — the equipment works for you — whereas in a PPA the operator takes it on, and that difference is reflected in the cost and in how maintenance responsibilities are divided.
Against a conventional loan, leasing usually offers specific accounting and tax treatment and a lighter guarantee structure, because the asset itself backs the transaction. It is a well-established structure in the Colombian market for capital goods, and financial institutions apply it to generation equipment too.
Its natural fit is companies able to make use of the tax treatment and with consumption that makes the saving predictable. Before choosing, it is worth putting the total financing cost of leasing, a loan and an outright purchase in the same table, incorporating the incentives applicable to each structure; the answer changes depending on who owns the asset.
The essentials of Solar leasing
- A finance lease with a purchase option at the end of the contract.
- It allows installation with no significant up-front outlay.
- Unlike a PPA, you pay for the asset, not for the energy generated.
- Its tax and accounting advantage depends on the company's profile.
Go deeper on NodoSolar
Related terms
Definition reviewed on
Frequently asked questions about Solar leasing
Leasing or a loan for a solar project?
It depends on the accounting and tax treatment that suits the company and on the specific financial terms of each offer. The useful comparison puts total financing cost, tax effect and who ends up owning the asset in the same table, because access to the incentives depends on that too.
Can an individual access solar leasing?
The structure is aimed mainly at companies, which are the ones able to use its accounting treatment. For households, the usual route is a general-purpose loan or the specific energy-improvement lines some institutions offer.
Ready to take the next step?
Tell us about your project and receive comparable quotes from verified installers. Free and with no obligation.