Paying cash usually costs the least over the life of a home solar system, as long as you stay long enough to earn the price back. A lease or power purchase agreement (PPA) costs nothing up front and can still save money, but you never own the panels, payments often rise every year, and selling the house takes extra steps. A solar loan with fees and interest can cost more than a lease. In our 25-year example for a 7.7 kW system near Denver, cash comes out about $35,400 ahead, a PPA about $20,000, a lease about $12,400 and a loan about $9,400. If electricity prices stay flat, the same loan and lease lose money. The guides below show where those numbers come from and what happens when you sell or want out.
Leaf & Watt sells, finances and installs nothing, and takes no fees from installers, lenders or lease companies. Every worked example uses dated public data and assumptions we label as ours, using the method on our how we estimate page.
What changed after 2025
Until the end of 2025, owners could claim a 30% federal credit. Public Law 119-21 ended it: 26 U.S.C. 25D(h) says the credit “shall not apply with respect to any expenditures made after December 31, 2025”, and an expenditure counts as made when installation is completed. So a cash or loan purchase installed in 2026 gets no federal credit. Our guide to what’s left of the solar tax credit covers the details.
Leases and PPAs sit under a different section. The company that owns the panels may claim the business credit in 26 U.S.C. 48E, at 30% for a system under 1 MW. That credit has limits of its own: solar placed in service after 31 December 2027 gets none if its construction began after 4 July 2026, while batteries are exempt from that cut-off. It is the provider’s credit, not yours. No law requires a provider to pass any of its value on, so only the price in your contract tells you whether it did.
The four options in one table
| Cash | Solar loan | Lease | PPA | |
|---|---|---|---|---|
| Who owns the panels | You | You (the lender may file a lien on the panels) | The provider | The provider |
| What you pay | The full price up front | Monthly payments, often with fees built in | A set monthly amount, often rising each year | A price for each kWh the panels make, often rising each year |
| Federal credit in 2026 | None | None | The provider may claim 48E | The provider may claim 48E |
| Repairs | Yours, after warranties | Yours | Usually the provider | Usually the provider |
| Selling the house | Panels convey with the house | Pay off the loan or deal with the lien | Buyer takes over, or you prepay or buy out | Same as a lease |
The difference between a lease and a PPA is who carries the production risk. With a lease you pay the same each month whatever the panels make, so it should come with a production guarantee. With a PPA you pay per kWh, so a cloudy year costs you less.
What the math shows
Start with solar lease vs buy, which works one house through all four options over 25 years. The system makes about 282,400 kWh, worth $64,243 in bill savings if each kWh earns Colorado’s 2026 average rate of $0.168 (EIA) and rates rise 2.5% a year. The cash price is $23,100, at LBNL’s 2025 median of $3.00 per watt for cash purchases (LBNL, August 2026). The lease and PPA prices in that example are example quotes, because no government agency or independent study we found publishes current lease or PPA prices.
Three lessons hold up across the examples on these pages:
- Cash wins on cost per kWh, but you wait. About 10.2¢ per solar kWh in the example, and the running total turns positive in year 12.
- The escalator is a bet on your utility’s rates. A lease rising 2.9% a year reaches $238 a month by year 25, almost double where it started. Against flat electricity prices, that lease ends about $4,400 behind.
- Export value moved the result most in our calculator tests. Where your utility credits exported power at less than your rate, lease and loan payments stay the same while savings shrink, so their margin goes first. Our guide to net metering and net billing explains how to find your utility’s export terms.
Then put your own quote into the lease, loan or cash calculator. It compares the three year by year, with present values at a discount rate you choose, and shows the provider’s possible credit separately. Two published estimates it cites put a lease at $75 to $200 a month (SolarReviews) and $150 to $250 (ConsumerAffairs), but the number that matters is the whole payment schedule on your quote, not the first month. The calculator covers panels only, not PPAs or batteries; its article shows how to turn a PPA price into a monthly figure.
Before you sign
The California Public Utilities Commission says lease and PPA escalators are typically 1% to 3% a year and advises caution above that. On loans, the CFPB’s 2024 report found hidden fees that “typically range from between 10 to 30 percent of the cash price but can exceed 50 percent”, and stated APRs that often leave them out. It also described loans that jump to a higher payment around month 19 unless the borrower prepays about 30% of the principal, the size of the old credit. In 2026 no homeowner credit pays for that.
Get these in writing, whichever option you choose:
- The cash price, even if you plan to borrow, and the amount financed
- The first payment or price per kWh, the escalator, the final-year payment and the total over the term
- Expected first-year output in kWh, and for a lease a production guarantee
- Buyout prices or the buyout formula by year, and transfer terms if you sell
- Who claims any tax credit, and whether it shows up in your price
The Treasury advisory Before You Sign a Solar Lease Agreement says of anyone who claims you can use tax credits on a leased system: “that claim is a lie”. For a sale or lease agreed at your home, the FTC’s Cooling-Off Rule lets you cancel “at any time prior to midnight of the third business day” (16 CFR 429.1), and some states give longer.
Selling or buying a house with a lease
A lease doesn’t pass with the deed. Either the buyer takes it over, usually after the provider’s credit check, or the seller prepays it or buys the system before closing. Under Fannie Mae’s Selling Guide and Freddie Mac’s Guide, leased panels add nothing to the appraised value, and a monthly lease payment usually counts as the buyer’s debt unless the lease meets their energy-delivery conditions.
The buyer also takes over the expensive end of the contract. In our worked example of an eight-year-old lease, the buyer inherits about $39,000 of remaining payments, and with rates rising 2.5% a year the power over those 17 years is worth about $745 less than the payments. Buying or selling a house with leased solar panels covers both sides step by step, including the buyer’s checklist, the title filing and Texas’s fixture lease addendum.
Getting out of a lease
Once the cancellation window has closed, there is usually no penalty-free exit. You can change who pays, by transferring the lease to your buyer, or end it by paying: prepaying what’s left or buying the system. Some providers will move the panels to a new home. Stopping payments is not an exit: it is a default, and the contract still binds you.
Buyouts in the first years may be limited or priced high. A provider that claimed an investment credit has to repay part of it if it disposes of the system within five years, under the recapture rule in 26 U.S.C. 50(a). The link to buyout terms is our reading of the statute. A provider’s bankruptcy doesn’t end a lease either. In the two large cases we read, Sunnova and SunPower, servicing passed to SunStrong Management and customers were told to keep paying. How to get out of a solar lease goes through each exit, the cancellation rules we read for federal law, California, Texas and Arizona, and a worked check of a buyout quote against the remaining payments.
Where to start
- Comparing quotes: read the lease vs buy comparison first, then run your own figures in the calculator.
- Already in a lease and moving: start with the house-sale guide, then the guide to getting out for prepayment and buyout math.
- Buying a house that has leased panels: the house-sale guide, especially its buyer’s checklist and worked example.
- Unhappy with a lease you signed: the guide to getting out, which also lists where to complain if you were misled.
This page is general information, not professional, tax, legal or financial advice. Your contract sets your payments and exit options, your utility decides how solar power is credited, and a tax professional can say what applies to your return. Worked examples are estimates, not quotes.
Sources checked on 4 November 2026.
