Solar Lease vs Buy: Which Actually Saves You More Money?
Leasing solar panels needs $0 down but saves far less over 25 years. Compare solar lease, PPA, cash, and loan options side by side — real costs, maintenance, home-sale risks, and when leasing actually makes sense.
Buying solar means you own the equipment. Leasing means you rent it from a company that installs it on your roof, keeps ownership for 20–25 years, and bills you monthly. For most homeowners who plan to stay put, buying saves 2–3x more money over the life of the system — but leasing is not always the wrong choice. Here is the complete comparison.
Buying (cash or loan) beats leasing for most homeowners: an owned 7 kW system typically nets $25,000–$45,000 in savings over 25 years and adds resale value, while a lease typically nets $5,000–$20,000 and can complicate selling your home. A lease makes sense if you cannot qualify for financing, want zero repair responsibility, or expect to move. One big historical disadvantage just changed: the federal 30% tax credit expired December 31, 2025, so lease customers no longer forfeit a credit that new buyers cannot get anyway — the decision now comes down to pure economics.
Lease, PPA, Loan, or Cash: The Four Ways to Go Solar
What a solar lease is
In a solar lease, you pay a flat monthly rate to use equipment a solar company owns. The company installs, monitors, insures, and maintains the system; you pay rent and use the electricity it produces. Terms run 20–25 years, and most contracts include an annual escalator of 1.5%–3.9% that raises your payment every year.
What a PPA is
A power purchase agreement (PPA) works the same way except you pay per kilowatt-hour instead of a flat rate — typically $0.10–$0.16/kWh, below most utility rates, with its own escalator. In both structures a third party owns the system on your roof, and that single fact drives most of the differences below.
The full comparison
| Lease | PPA | Solar Loan | Cash | |
|---|---|---|---|---|
| Who owns it | Solar company | Solar company | You | You |
| Upfront cost | $0 | $0 | $0–low down payment | Full price |
| Monthly payment | Flat rent + escalator | Per-kWh rate + escalator | Fixed loan payment | None |
| Maintenance | Company handles | Company handles | You | You |
| Incentives | Company claims them | Company claims them | You claim them | You claim them |
| Home value impact | Little or none | Little or none | Full gain | Full gain |
| 25-year total cost | Highest | High | Middle | Lowest |
The 25-Year Cost Comparison
Take a typical 7 kW system producing about 10,500 kWh per year for a home paying $0.18/kWh — roughly $1,900/year of electricity, rising about 2.5% per year as rates climb:
| Path | 25-year cost | 25-year bill savings | Net result |
|---|---|---|---|
| Cash purchase (~$19,600 installed) | ~$19,600 + one inverter replacement | ~$60,000–$65,000 | ~$35,000–$45,000 saved |
| Solar loan | Loan payments + interest on a lower financed price | Same utility savings | ~$20,000–$35,000 saved |
| Lease ($120/mo, 2.9% escalator) | ~$44,000 in payments | Offset bill shrinks your advantage | ~$10,000–$20,000 saved |
| PPA ($0.13/kWh, 2.9% escalator) | Payments track production | Narrow discount vs utility rate | ~$8,000–$18,000 saved |
Leases do save money — just far less. You pay nothing upfront and the lease payment is set below your current electric bill, so you pocket the difference. But the escalator compounds every year, the savings stay thin, and none of the system's equity is yours. Total lease payments across a 25-year term commonly reach $35,000–$50,000 for a system you could have bought outright for $17,500–$23,100.
These are planning estimates, not quotes. Your rates, sun exposure, and contract terms move every number — run your actual figures through our solar ROI calculator.
Pros and Cons Side by Side
- Maximum lifetime savings — typically 2–3x more than leasing
- System adds resale value (owned-solar homes sold for ~4% more in major studies)
- You claim every available incentive and keep all net metering credits
- No annual escalator — the payments end when the loan is paid
- Sell your home freely with no third-party approval
- Payments never end — 20–25 years of escalating bills
- Little to no home value added, since the system is not yours
- You forfeit ownership equity and incentive upside
- Selling requires a buyout, removal, or buyer credit approval
- Flat lease payments ignore that panel output degrades slightly each year
Lease quotes are designed to look small: $0 down and a monthly payment under your electric bill. Before signing, ask every installer for the cash price and a loan quote for the same system. A 25-year lease that totals $45,000 against a $19,600 purchase price is the comparison the sales page will not draw for you.
When Leasing Actually Makes Sense
Leasing is not a scam — it is a reasonable product for specific situations:
- You cannot qualify for financing at a reasonable rate, and $17,000–$23,000 in cash is not available.
- You want zero maintenance risk — the leasing company handles monitoring, repairs, and inverter replacement for the full term.
- You expect to move within a few years and would rather avoid owning a system you cannot take with you (though note: leases can still complicate the sale — see below).
- You are on a tight monthly budget and the lease payment still beats your utility bill from day one.
The Incentive Question Just Changed
For years, the strongest argument against leasing was that the third-party owner — not you — claimed the federal 30% Investment Tax Credit. That argument largely disappeared when Section 25D expired December 31, 2025. New 2026 installations get no federal credit whether you lease or buy, so the gap narrowed to pure economics: escalators, equity, and home value.
State-level incentives still favor ownership. In Florida, the 100% property tax exemption on renewable energy devices means the value an owned system adds to your home is not taxed — value a leased system mostly does not add. Net metering credits flow to the utility account holder in either structure.
Selling a Home With Leased Panels
This is the lease's biggest practical trap. Because the lease company files a UCC-1 fixture filing, the panels are legally their property even though they are bolted to your roof. When you sell, one of three things must happen:
The buyer must pass the lease company's credit check — which can shrink your buyer pool and slow the closing.
Typically the remaining contract value, often a five-figure sum folded into closing costs.
At your expense, leaving the buyer with roof holes that need patching.
None of this exists with an owned system. NREL and Zillow research consistently shows owned solar adds resale value; leased systems show mixed-to-neutral results, with realtor surveys repeatedly flagging leased panels as a deal complication.
The Florida Wrinkle
Florida offers strong net metering plus property tax and sales tax exemptions on solar equipment. One caveat if you are comparing leases: Florida has never clearly authorized third-party sale of electricity, so some providers offer leases while true PPAs occupy a legal gray area in the state. Ask any provider to state in writing whether the contract is a lease or a PPA, who owns the system, and how that interacts with your utility interconnection.
The Bottom Line
Buy if you plan to stay in the home 10+ years and can pay cash or qualify for a sensible loan — you keep the equity, the incentives, and the home value, and the numbers favor you heavily. Lease if you cannot finance, want the maintenance handled, and accept smaller lifetime savings as the price of $0 down.
Whichever way you lean, the leverage is in the quotes: compare at least three local installers and make each one price the same system as both a purchase and a lease. For more on paying for a system you own, see our solar panel financing guide, and for how exported power is credited, see how net metering works.
- NREL — research on solar ownership and home resale value
- Zillow — home value premium studies for owned solar
- EnergySage — lease vs buy marketplace pricing data
- U.S. Department of Energy — Homeowner's Guide to Going Solar
- DSIRE — net metering and state incentive database
Frequently Asked Questions
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