Solar lease vs buy · 2026
Solar lease vs buy: which saves you more?
Buying solar saves 2–3× more over 25 years than leasing. When you buy, you keep the 30% federal tax credit, all state incentives, and 100% of the electricity savings. When you lease, the leasing company keeps the credits and passes a small fraction (typically 10–20%) back as reduced monthly payments. Leasing only makes sense if you can't use the federal tax credit or absolutely can't take on debt — most homeowners should buy with a solar loan if cash isn't available.
25-year savings: lease vs buy, by state
Lease savings assume a typical 18% bill reduction; buy savings come from our calculator using NREL data, real state incentives, and 25-year rate inflation.
| City | Lease 25-yr | Buy 25-yr | Buy advantage |
|---|---|---|---|
| San Francisco, CA | $24,065 | $82,252 | +$58,187 |
| Phoenix, AZ | $16,826 | $63,681 | +$46,855 |
| Houston, TX | $15,750 | $50,817 | +$35,067 |
| Miami, FL | $15,750 | $63,890 | +$48,140 |
| New York, NY | $21,033 | $94,572 | +$73,539 |
Side-by-side: lease vs PPA vs buy
| Factor | Lease | PPA | Buy (cash or loan) |
|---|---|---|---|
| Upfront cost | $0 | $0 | $15k–$25k (cash) or $0 (loan) |
| Federal 30% tax credit | Leasing co. keeps it | Leasing co. keeps it | You keep it |
| State incentives | Leasing co. keeps them | Leasing co. keeps them | You keep them |
| Annual cost escalator | 2.9% typical | 2.9% typical | None — you own it |
| Maintenance | Leasing co. handles | Leasing co. handles | You handle (rarely needed) |
| Home value impact | Slightly negative (lease transfer hassle) | Slightly negative | +$4k–$15k typical |
| 25-yr savings (typical) | $15k–$30k | $15k–$30k | $50k–$130k |
| Selling the home | Buyer must qualify or lease bought out | Buyer must assume PPA | Increases sale price + speed |
When each option makes sense
Buy with cash — best for
- ·Adequate savings + tax liability to use the full 30% federal credit
- ·Plan to stay 7+ years (long enough for full payback)
- ·Want maximum lifetime savings and home value boost
Buy with a solar loan — best for
- ·Most homeowners — this is the default recommendation
- ·Good credit (loan rates of 5–7% typical)
- ·Cash flow positive from month 1 in most states (loan payment < bill savings)
Lease or PPA — best for
- ·Low taxable income (can't use the federal credit anyway)
- ·Can't or won't take on debt for any reason
- ·Don't mind giving up most of the long-term value for zero hassle
See your buy-side numbers
The calculator shows your specific 25-year savings if you bought today using NREL production data and 2026 incentives — the floor for what leasing would give up.
Open the solar calculator →Common questions
Is it better to lease or buy solar panels?▾
For most homeowners, buying delivers 2–3× more lifetime savings than leasing. The reason: when you buy, you keep the federal 30% tax credit, all state incentives, and 100% of the electricity savings. When you lease, the leasing company keeps the credits and pockets the difference between what they save and what they charge you. Leasing only makes sense if you can't use the federal tax credit (low taxable income) or want zero upfront cost with a fixed monthly payment.
What is a solar PPA and how is it different from a lease?▾
A Power Purchase Agreement (PPA) means you pay per kWh produced, like a utility bill from the solar company instead of from your power provider. A lease means you pay a fixed monthly amount regardless of how much your panels produce. Both arrangements mean the solar company owns the panels and keeps the tax credits. PPAs are slightly better than leases because you only pay for what's produced, but both are still significantly worse than buying.
Can I take the federal solar tax credit if I lease?▾
No. The Residential Clean Energy Credit only goes to the system owner. If you lease or use a PPA, the leasing company is the owner and they claim the 30% credit — typically passing along a small portion as 'savings' on your monthly payment. If you have enough tax liability to use the full federal credit (most middle-income homeowners do), buying is usually the better choice.
What happens to a solar lease when I sell my home?▾
Three options, all worse than owning: (1) The buyer assumes the lease, but only if their credit qualifies and they're willing — many buyers refuse, complicating sales. (2) You buy out the lease early, often at an inflated 'NPV' price set by the leasing company. (3) You pay to remove the panels. Studies show solar leases reduce home sale price or extend time-on-market by 4–10% on average. Owned solar systems do the opposite — they typically add $4,000–$15,000 to home value.
What if I can't afford to buy solar outright?▾
Solar loans bridge the gap. A 20-year solar loan at 5–7% interest typically costs less per month than the electricity it offsets, meaning you're cash-flow positive from month 1 while still owning the system and getting all the tax credits. Most buy-vs-lease decisions should actually be 'loan-buy vs lease' — and loan-buy almost always wins.
Are solar leases ever the right choice?▾
Yes, in three specific cases: (1) Your taxable income is too low to use the 30% federal credit — leasing lets you indirectly capture some of that value through reduced monthly payments. (2) You absolutely cannot take on debt or pay cash. (3) You're staying in your home for less than 5 years and want zero hassle (though this often means solar isn't worth it at all in this case).