Solar leases are a vehicle that can cover 100% of the cost of a solar system with no money down. Most solar leases have a term of 20 years, and the property owner does not own the solar system, the leasing company (lessor) owns it. The lessor then sells the solar power that the solar system generates, to the property owner, in the form of a lease payment. Because the lessor is the owner of the solar system, they receive all of the government incentives, and as a result, most solar lease payments are based on the “net” cost of the solar system to the lessor; the cost of the solar system after all government incentives are deducted from the cost of the system. Therefore, a solar lease may be preferable to some property owners for several reasons. Those reasons sometimes include the inability to personally utilize the 30% Federal Tax Credit, debt ratio (DTI) or income documentation challenges, or simply the appeal of the 20 year bumper to bumper warranty that most leasing companies offer. For those property owners there are two primary types of solar leases; monthly and prepaid.