If you have met with a solar sales representative, they have likely presented you with multiple options for getting solar panels on your roof: buying with cash, financing with a solar loan, or leasing the system through a Power Purchase Agreement (PPA) or solar lease.
While they may pitch leasing as "free solar panels," the reality is that how you pay for solar determines your long-term savings and home equity. Here is a comparison of buying vs. leasing in 2026.
1. Buying Solar Panels (Cash or Loan)
When you purchase a solar system, you own the equipment from day one (or after your loan is paid off).
Pros:
- Maximum Lifetime Savings: Because you don't pay ongoing lease fees, buying yields the highest return on investment. You keep 100% of the utility savings.
- You Keep Any Incentive You Qualify For: When the federal 30% residential credit was active (through 2025), only the owner could claim it — leasing companies took it instead. That specific credit no longer applies to 2026 installs, but the same principle holds for any current state, provincial, or utility incentive: only an owner can claim it.
- Adds Home Resale Value: Research summarized in our home value roundup shows owned solar panels tend to increase home values. Buyers appreciate a home with no electric bill and no monthly lease transfer hassles.
Cons:
- High Upfront Cost (Cash): Requires an initial outlay of $15,000 to $25,000.
- Maintenance Responsibility: While panels have 25-year warranties, you are responsible for coordination and labor costs if components break.
2. Leasing Solar Panels / Power Purchase Agreements (PPAs)
With a solar lease or PPA, a third-party solar company owns the panels on your roof. You either pay a fixed monthly rent (solar lease) or buy the electricity generated by the panels at a locked-in rate per kWh (PPA).
Pros:
- $0 Upfront Cost: The leasing company covers all installation and equipment costs.
- Maintenance Included: Since the company owns the system, they are responsible for monitoring and repairing it if anything breaks.
- Immediate, Small Savings: Your monthly lease payment or PPA rate is typically set slightly lower than your current utility bill.
Cons:
- Minimal Long-Term Savings: The third-party owner takes the majority of your savings. Most leases include an annual escalator clause (often 2% to 3.5%), meaning your lease price increases every year.
- You Don't Get Ownership Incentives: Since the leasing company owns the panels, it claims any owner-only incentive — historically the federal tax credit, and today any current owner-only state or utility program — not you.
- Selling Your Home Becomes Difficult: Home buyers are often wary of taking over a 20- or 25-year lease contract. Many home sales fall through because buyers reject the lease transfer, forcing the seller to buy out the contract for thousands of dollars.
Side-by-Side Comparison
| Feature | Cash Purchase | Solar Loan | Solar Lease / PPA |
|---|---|---|---|
| Ownership | You own the system | You own the system | Third-party company owns it |
| Upfront Cost | Full system price ($15k–$25k) | $0 down options common | $0 down |
| Who gets an owner-only incentive? | You | You | The leasing company |
| 25-Year Net Savings (gross cost, no incentive assumed) | Highest — you keep 100% of the savings | High — reduced by loan interest | Lowest — third party keeps most of the value |
| Impact on Home Sale | Positive (increases value) | Neutral (must pay off loan) | Negative (lease transfer hassle) |
The Verdict: Buy If You Can
If you can afford cash or secure a reasonable-rate solar loan, buying is generally the stronger financial decision even on gross cost alone. It maximizes your savings, adds home equity, keeps you eligible for any incentive you do qualify for, and avoids home-transfer headaches.
Leasing or PPAs are worth considering mainly for the peace of mind of third-party maintenance and a $0 upfront cost — not as a way to access an incentive, since the leasing company keeps any owner-only program for itself.
Frequently Asked Questions
What is a PPA escalator?
An escalator is a clause in a solar lease or PPA that increases the price you pay for power by a fixed percentage (typically 2.9% per year). While your initial rate is cheaper than the utility, after 10-15 years, the lease price may end up higher than current utility rates.
Can I buy out my solar lease early?
Most lease agreements allow a buyout, but only after a certain period (e.g., 5 or 7 years). The buyout price is determined by a "Fair Market Value" assessment, which is often significantly higher than what a new system would cost.