Buy vs Lease Solar Panels in 2026: Cash, Loan, Lease or PPA?

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Two solar quotes are lying on the kitchen table. One says “$0 down, start saving next month.” The other has a price tag the size of a new car. Both promise lower bills for 25 years, and the salesperson wants an answer tonight. Here’s how buying and leasing really compare in 2026, the year the rules changed for homeowners.

The short answer: buying (with cash or a low-rate loan) usually saves the most over 25 years if you plan to stay in your home. But in 2026, homeowners who buy no longer get the 30% federal tax credit, while leasing and PPA companies can still claim a business credit on some systems through 2027. That can make a lease cheaper at the start. Get both quotes and compare the total cost.

Four ways to pay for solar panels

The FTC and the Department of Energy describe four options. With a cash purchase, you own the system from day one. With a solar loan, you also own it, but you pay it off over time with interest. With a lease, a company owns the panels on your roof and you pay a monthly fee to use the power they make. With a power purchase agreement (PPA), the company owns the panels and you pay for each kilowatt-hour (kWh) they produce, at a price set in the contract. Some companies also sell a prepaid lease: you pay the whole lease up front, but the company still owns the system.

	Cash	Loan	Lease	PPA
Who owns the panels	You	You	The company	The company
Money up front	Full price	Little or none	Little or none	Little or none
What you pay each month	Nothing	Fixed loan payment	Fixed fee (may rise each year)	A price per kWh produced (may rise each year)
Federal credit in 2026	None (25D ended)	None (25D ended)	The company may claim one (48E)	The company may claim one (48E)
State incentives and solar credits (SRECs)	Yours	Yours	Usually the company’s	Usually the company’s
Maintenance and repairs	You (warranties help)	You (warranties help)	Usually the company	Usually the company
Typical contract length	None	Loan term	About 20 years (FTC)	About 20 years (FTC)
Raises your home’s value?	Can	Can	Contract must be transferred at sale	Contract must be transferred at sale

What changed in 2026: the tax credit split

For years, the deciding factor was the 30% federal residential clean energy credit (Section 25D). The law known as the One Big Beautiful Bill, signed July 4, 2025, ended it early. The IRS says the credit “will not be allowed for any expenditures made after December 31, 2025,” and that an expenditure counts as made when the installation is completed. So if your system was finished in 2026, you can’t claim it, even if you paid a deposit in 2025. More on what’s left in our solar tax credit 2026 guide.

Leases and PPAs are different because the homeowner isn’t the owner. The company that owns the panels claims a business credit, the clean electricity investment credit (Section 48E). The final law kept that credit for leased rooftop solar panels; it only shut out leased solar water heaters and small wind turbines. But it added a deadline for solar: the project must have started construction by July 4, 2026 or be placed in service by December 31, 2027. Treasury’s August 2025 guidance (Notice 2025-42) tightened what “started construction” means, with a looser rule kept for small solar projects of 1.5 MW or less. New rules on parts from “prohibited foreign entities” also apply to projects that begin construction after 2025, and they can disqualify some systems.

What this means for you: a leasing company that installs your system by the end of 2027 may still collect a federal credit worth a large share of its cost. Some of that may reach you as a lower lease payment or PPA rate, but the law doesn’t require it. Ask each company directly: “Are you claiming a federal credit on my system, and how is it reflected in my price?” After 2027, unless a project started construction by July 4, 2026, that advantage ends for leases too.

Berkeley Lab found that leases and PPAs jumped from 26% of new home solar systems in 2023 to 43% in 2024, the highest share in nearly a decade.

What solar costs if you buy

Berkeley Lab’s data for systems installed in 2024 (before any incentives) put the median price at $3.50 per watt for cash purchases and $4.70 per watt for loan-financed systems. The gap is partly loan fees rolled into the price. The median home system was 7.2 kW. By our math, that’s about $25,200 for a 7.2 kW system paid in cash, or about $33,800 financed, before any state or utility incentive. Many installers charge less: the most common cash price was under $3 per watt. Prices vary a lot by state and installer, so treat these as rough guides. Our solar panel cost guide goes deeper.

A simple comparison (our estimate)

Here’s a worked example, with assumptions you can swap for your own numbers. It’s an estimate, not a quote.

• The system: 7.2 kW. NREL’s PVWatts calculator says 1 kW of roof panels makes about 1,090 kWh a year in Seattle and about 1,755 kWh in Phoenix. At a middle figure of about 1,300 kWh per kW, the system makes about 9,400 kWh a year.
• Electricity price: the U.S. average in 2024 was 16.5 cents per kWh (EIA). If every kWh replaces power you’d have bought at that price (which only happens with full net metering; see below), the panels are worth about $1,550 a year.
• Buying with cash: about $25,200 ÷ $1,550 ≈ 16 years to pay back at today’s prices, with no federal credit. If electricity prices rise, payback comes sooner. Many panels carry 25-year performance warranties (Qcells’ Q.TRON line, for example), so you could have several years of mostly free power after payback.
• Leasing: what you save each month is your bill drop minus the lease payment. If a lease costs $110 a month and cuts your bill by $130, you save $20 a month from day one. You’ll never get the free years after payback, but you also never paid $25,000.

The lease numbers are an example, not a market rate. Real savings depend heavily on how your utility credits exported power; under California’s net billing, exports usually earn less than retail. Read our net metering guide before you trust any savings estimate.

Pros and cons of buying

• Good: the largest long-term savings; you keep state credits, rebates and any solar renewable energy credits (SRECs); no payment escalators; the system can add to your home’s value; you can add a battery later on your own terms.
• Watch out: no federal credit for 2026 installs; a big up-front cost or a loan with fees; you handle repairs once the installer’s workmanship warranty runs out; a loan may put a lien or fixture filing on the panels.

Pros and cons of leasing or a PPA

• Good: little or nothing up front; the company usually handles monitoring and repairs; many contracts include a production guarantee; in 2026–2027 the company’s federal credit can make the price lower than it would be otherwise.
• Watch out: smaller lifetime savings; payments may go up every year; you don’t own the panels at the end (you may be able to buy them at “fair market value,” the FTC notes); the incentives go to the owner, not you; selling your home means transferring the contract to a buyer who must qualify, or paying it off.

What if the solar company goes out of business?

It happens. Sunnova, one of the largest leasing and PPA companies, filed for Chapter 11 bankruptcy in June 2025. It said it would keep honoring leases, PPAs, warranties and production guarantees, and its customer accounts later moved to a new servicer, SunStrong Management. Your contract and payments usually survive; what changes is who fixes things. Ask who services the system if the company is sold, and keep every warranty.

State incentives: check before you choose

With the federal homeowner credit gone, state programs matter more, and some treat leases differently from purchases. New York, for example, offers a state solar equipment credit of 25% up to $5,000 for systems at your main home. The state counts purchases and also leases and PPAs of at least ten years. Other states offer rebates, property-tax exemptions or SREC markets that only owners can use. Look up your state on DSIRE (dsireusa.org) and your utility’s website, and check our home energy rebates guide.

Who should buy, and who should lease

• Buy if you have the cash or can get a low-rate loan, plan to stay 10 years or more, have a good roof that won’t need replacing soon, and live where your utility still pays well for exported power.
• Lease or sign a PPA if you can’t or don’t want to pay up front, want someone else to handle repairs, and the contract saves you money from month one with a small or no escalator. In 2026 and 2027, also lease if the company passes its federal credit through to you as a clearly lower price.
• Wait if your roof needs replacing in the next few years. The Department of Energy suggests pairing solar with a roof replacement, since removing and reinstalling panels later costs extra.

Know your usage first

Every quote starts from your yearly kWh, so pull 12 months of bills. An in-panel monitor (installed by a licensed electrician) also lets you check whether a leased system makes what its production guarantee promises.

Prices change often. The prices below are what we saw at the maker or a major retailer in October 2026; check the current price before you buy. Home batteries are sold and installed through certified installers, so get two or three quotes.

The Emporia Vue 3 tracks your whole home, solar production and up to 16 circuits in one app; Emporia lists it at $199.99 with 16 sensors. The Kill A Watt P4400 is a $32.99 plug-in meter for single appliances up to 15 amps.

Check the Emporia Vue 3 price on Amazon

Questions to ask before you sign anything

1. What is the total I’ll pay over the full contract or loan, including every escalator and fee?
2. Does my payment go up each year, and by how much? (The FTC lists this as a key question.)
3. Is there a production guarantee, and what happens if the system falls short?
4. Who pays for repairs, roof leaks around the mounts, and removing and reinstalling panels if I replace my roof?
5. What happens if I sell my home: transfer, buyout or removal, and what are the fees?
6. Who claims the federal and state incentives, and how is that reflected in my price?
7. Is the installer licensed in my state, and does it hold NABCEP-certified staff? (The Department of Energy suggests checking.)

Walk away from anyone who pushes you to sign the same day or claims the government gives away free panels. The FTC flags pressure tactics, and the Department of Energy says the federal government has no free home solar program.

Keep exploring: start with our solar panels for home guide, then see are solar panels worth it, how many solar panels you need and net metering explained. Thinking about backup power too? Read home battery backup. For the science, see solar energy and clean energy, or browse everything in solar energy.

Buying vs leasing solar: questions

Can I still get the 30% solar tax credit in 2026?

Not as a homeowner who buys. The IRS says the residential clean energy credit (25D) is not allowed for expenditures made after December 31, 2025, and an expenditure is made when installation is completed. If your system was finished in 2025, you can still claim it on your 2025 return with Form 5695. Leasing companies may claim a separate business credit (48E) through 2027.

Is a solar lease a bad idea?

Not automatically. A lease with no escalator that lowers your total bill from the first month can be a fair deal, especially if you can’t pay up front. The risks are long contracts, rising payments, and complications when you sell. Compare the total 20- or 25-year cost against a purchase quote for the same system.

What’s the difference between a solar lease and a PPA?

With a lease, you pay a set monthly amount to use the system, however much power it makes. With a PPA, you pay for each kilowatt-hour the panels produce, at a contract price. In both, the company owns and usually maintains the system. A PPA bill goes up and down with the seasons; a lease payment doesn’t.

Can I sell my house with leased solar panels?

Yes, but the FTC advises checking the contract before you sign. Usually the buyer takes over the lease (and must pass a credit check), you buy out the remaining contract, or, in some contracts, the panels are removed. Ask for the transfer process and fees in writing, and tell your real estate agent early.

Can I buy my leased panels later?

Many contracts allow a buyout, often at “fair market value,” as the FTC notes. Ask for the buyout schedule up front and compare it with buying the system today.

Is a solar loan the same as owning?

Yes. With a loan you own the system, so you get any state incentives and keep the panels when the loan is paid off. But Berkeley Lab found loan-financed systems had a median price of $4.70 per watt in 2024, against $3.50 for cash, partly because fees are built into the price. Compare the cash price and the loan price for the same system.