Solar Lease vs Buying in 2026: Which Saves More Now?

Four ways to pay for solar

• Cash. You own the system and keep all the savings. Highest upfront cost, lowest total cost.
• Loan. You own the system and repay a lender. Savings start immediately, but interest and lender fees eat into them.
• Lease. A solar company owns the system on your roof; you pay a fixed monthly amount to use it.
• Power purchase agreement (PPA). The company owns the system and sells you the power it makes at a set price per kWh, usually below your utility's rate.

Why 2026 changed the comparison

Until the end of 2025, buyers got a 30% federal tax credit and leases mostly didn't make sense for anyone who could use it. That homeowner credit is gone for systems installed in 2026 or later.

Solar companies that own systems — the owner in a lease or PPA — can still claim a separate business energy credit, as long as the system is placed in service by the end of 2027 (or construction began before July 4, 2026). Battery storage isn't bound by the 2027 deadline. Companies don't have to pass that credit on to you, but competition means part of it usually shows up as lower lease payments or PPA rates. For 2026 and 2027, that makes leases and PPAs relatively more attractive than they were — and the advantage is set to shrink after 2027.

The real cost of a loan

Berkeley Lab's data for 2025 installations shows a striking gap: homeowner-owned systems bought with cash cost a median $3.00 per watt, while loan-financed systems cost $4.50 per watt. Much of the difference is lender "dealer fees" — often 15% to 30% of the loan — that are folded into the system price so the interest rate can be advertised as low. Always ask for the cash price alongside any loan offer, and compare the loan's total cost against a home-equity loan or credit union rate.

What to check in a lease or PPA

• The escalator. Many contracts raise the payment or per-kWh price every year, commonly 0% to about 3%. A 2.9% escalator nearly doubles the rate over 25 years. Compare it with how fast you expect utility prices to rise.
• The term. 20 to 25 years is typical. Make sure the system's expected life covers it and find out what happens at the end: renewal, removal, or a buyout.
• Production guarantees. A good PPA or lease guarantees a minimum output and pays you if the system falls short.
• Selling your home. The buyer usually has to qualify for and take over the contract, or you pay it off. Ask how transfers work and what they cost.
• Maintenance and roof work. The owner should cover repairs, monitoring and removal-and-reinstall if your roof needs replacing.
• How exports are credited. A PPA price below your utility rate saves money only on power you'd otherwise buy. In states that pay little for exports, a PPA can cost more than it saves on midday surplus — see net metering vs net billing.

A quick way to compare

1. Look up what a purchased system would cost and save on your city's page, then plug an installer's cash price per watt into the calculator.
2. For a lease or PPA, add up the total payments over the full term, including the escalator.
3. Compare that total with what the same power would cost from your utility over the same period, and with the cash purchase.

As a rule of thumb: if you can pay cash or borrow cheaply and expect to stay put, owning usually wins over the life of the system. If you can't, or you want someone else responsible for the equipment, a lease or PPA signed while the business credit lasts can still lower your bills from month one — provided the escalator is modest and the price beats your utility's.

Whatever you choose, get at least three quotes. Our guide to reading a solar quote covers what to compare.