Solar Lease vs. Buy in 2026: Which Wins Now?

This used to be a simpler decision. When the 30% federal residential credit (Section 25D) was available, buying almost always won — you got the credit and the asset. That credit expired December 31, 2025, and the answer is no longer automatic. In 2026, the choice between leasing and buying is a genuine trade-off, and it hinges on one fact: only a third-party owner can still claim a federal credit.

Let's break it down.

The three ways to pay

There are really three options, and people often blur the last two:

• Cash or loan (you own it). You pay upfront or finance the system. You get $0 federal credit in 2026, but you capture 100% of the electricity savings for 25+ years.
• Lease (you rent it). A provider owns the panels and charges you a fixed monthly payment, often with an annual escalator. You save versus your utility bill, but less than owning.
• PPA — power-purchase agreement (you buy the output). Same third-party ownership, but instead of a fixed rent you pay a per-kWh rate for the solar power you use, usually below your utility rate.

Leases and PPAs are both "third-party ownership." The economics are similar; the billing mechanism differs.

Why leasing got more attractive in 2026

The commercial clean-electricity credit (Section 48E) survived the law change that killed 25D. Homeowners can't claim 48E on a system they own — but the company that owns your leased panels can. They also claim accelerated depreciation. A well-run provider prices your payment to pass part of that value back to you.

In other words, leasing is now the only residential channel where the federal subsidy still flows. That's why $0-down lease and PPA offers are everywhere this year. (We cover the credit mechanics in the 2026 solar tax credit guide.)

The case for buying

Owning still produces the most lifetime savings. You're not sharing any of the value with a financing company, and once the system is paid off, your electricity is essentially free for the remaining life of the panels.

Buying wins when:

• You can pay cash, or finance at a reasonable rate.
• You'll stay in the home long enough to clear the (now longer) payback — typically 8–13 years.
• You want the home-value bump that owned solar can add. (Leased systems generally don't add appraised value, and can complicate a sale.)
• You value certainty: no escalator, no contract to assign to a buyer.

The downside is real, though: with no federal credit, your upfront cost is higher and your break-even is years further out than it was in 2025. Check exactly how far out with our solar payback calculator.

The case for leasing or a PPA

Leasing wins when the upfront cost or the long payback is the dealbreaker:

• $0 down. No five-figure check, no loan on your credit.
• Immediate savings. You typically save 10–25% versus your utility bill starting month one.
• No maintenance risk. The provider owns the hardware and handles repairs, inverter replacement, and monitoring.
• You indirectly benefit from 48E through a lower payment than the economics would otherwise allow.

The trade-offs:

• Smaller total savings — you're sharing the upside with the provider.
• Escalators. Many contracts raise your payment 1–3% a year. If your utility rate rises slower than that, your savings shrink over time. Read the escalator before signing.
• Home sale friction. A buyer has to qualify to assume the lease, or you buy it out.

A simple way to decide

Ask yourself, in order:

1. Can I comfortably pay cash or finance it? If no → lease/PPA is likely your path.
2. Will I stay 8–13+ years? If no → leasing's lower commitment fits better.
3. Is the lease escalator below my expected utility-rate increase? If no → the lease's savings will erode; lean toward buying or a different provider.
4. Do I care about owning the asset and the resale value? If yes → buy.

If you land on "buy," the question becomes cash vs. loan — a financing decision driven by your loan rate versus the return on keeping that cash invested.

Rough numbers

For a representative 7 kW system in an average market:

• Buy (cash): highest 25-year savings, payback around 10–13 years, full asset ownership.
• Loan: similar lifetime savings minus interest; near-zero upfront.
• Lease/PPA: lower lifetime savings, but $0 down and savings from day one.

The exact figures swing hard with your state's electricity rate, sun hours, and install cost. Don't decide on averages.

See your numbers side by side

Our calculator lets you switch ownership type — cash, loan, lease, or PPA — and shows how each changes your upfront cost, monthly payment, payback, and 25-year savings for your state. That's the only way to know which one actually wins for you.

Compare lease vs. buy in the calculator →