Solar Lease vs. Buying vs. Loan (and PPAs)
| Cash purchase | Loan | Lease | PPA | |
|---|---|---|---|---|
| Who owns it | You | You | Company | Company |
| Incentives/RECs | You | You | Company | Company |
| Maintenance | You (unless contracted) | You | Usually company | Usually company |
| Payment | Upfront | Monthly loan | Monthly lease | Per kWh produced |
(Based on FTC and DOE descriptions.)
Buying with cash
DOE: a purchased system can generally be installed at a lower total cost than one using a loan, lease, or PPA. LBNL's 2024 median for cash purchases was $3.5/W vs. $4.7/W for loan-financed systems, partly due to loan fees rolled into the price (Oct 2025).
Loans
Home equity loans, bank/credit union loans, or PACE. FTC questions to ask: APR, payment changes, balloon payments, term, liens, and cancellation rights. PACE places a property tax lien that may take priority over your mortgage — ask whether your mortgage allows it and how it affects refinancing or selling.
Leases
Long-term (some 20 years). Payments may increase over time; ending early can be "difficult and expensive" (FTC).
PPAs
You buy the power produced at a price the provider sets; also often ~20 years (FTC).
Tax credit
Federal tax credit status: The federal residential clean energy credit (25D) doesn't apply to expenditures made after December 31, 2025, and the IRS treats an expenditure as made when installation is completed. Systems whose installation is completed in 2026 do not qualify for it.
Before you sign any option
Confirm term length, payments and escalators, production guarantees, maintenance responsibility, who gets incentives, early termination fees, and what happens when you sell (FTC).
Sources
- FTC Consumer Advice, "Solar Power for Your Home" — https://consumer.ftc.gov/articles/solar-power-your-home (accessed Oct 20, 2026)
- U.S. Department of Energy, "Homeowner's Guide to Solar" — https://www.energy.gov/eere/solar/homeowners-guide-going-solar (accessed Oct 20, 2026)
- Barbose et al., Lawrence Berkeley National Laboratory, "U.S. Distributed Solar and Storage: 2025 Data Update" (October 2025) — https://emp.lbl.gov/sites/default/files/2025-10/Distributed%20Solar%20%26%20Storage-2025%20Data%20Update.pdf (accessed Oct 20, 2026); data viewer: https://emp.lbl.gov/tracking-the-sun
- IRS, "FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21 (OBBB)" — https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb (accessed Oct 20, 2026)
SolarMatchup is a free service: you submit one request and we match you with one installer. Their proposal is an estimate, not a guarantee — use this guide to read it carefully and ask questions before you sign. Savings, if any, depend on your usage, utility rates, and local rules.
Last reviewed 2026-10-20.
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