Is Leasing Solar Equipment Legal?

Proposed legislation would clarify using a lease, sometimes known as third-party financing, to aquire a solar array is legal in Wisconsin.

RENEW Wisconsin and the members of the Wisconsin Solar Coalition applaud the introduction of the bill by Sen. Rob Cowles, R-Green Bay, and Rep. Rachael Cabral-Guevara, R-Appleton. The entities are urging other legislators to support it.

According to RENEW Executive Director Heather Allen, the bill would expand access to solar energy in the state by allowing homeowners and businesses a basic financing option that is available in other states.

“Decades of Wisconsin case law and statutes allow for solar leasing or third-party financing,” she explains. “However, over the past several years, some utilities have challenged solar installations with third-party financing structures. Since the Public Service Commission of Wisconsin and courts have avoided clarifying the law, it is up to the legislature.”

Allen argues without clarity, Wisconsinites lack access to all of the financing options to meet their clean energy goals, create jobs and manage energy bills while improving the resiliency of the electric grid.

In a release, RENEW Wisconsin points out that across the country, leasing equipment is one of the most often used financing methods for distributed solar. The organization argues this bill is an opportunity to provide greater access to affordable, emission-free electricity for all Wisconsinites by clarifying this law.

Mike Barnett, a building design consultant at HGA Architects and Engineers, says he sees a “tremendous appetite” to utilize third-party financing to develop renewable energy projects, microgrids, and heat and power installations to drive down operational costs.

“Unfortunately, in Wisconsin, there is no legal clarity surrounding third-party financing,” Barnett explains. “If the legislature clarified the legality of third-party financing, these types of capital investment projects and associated jobs would dramatically increase.”

Niels Wolter of Madison Solar Consulting says not-for-profit and public clients looking to do solar projects don’t qualify for tax incentives. He notes third-party financing would be a solution for them to generate solar power, reduce their operating costs and teach their communities about renewables.