Solar companies promote leases as an easy, $0-down way to go solar. But the financial reality is that purchasing delivers 2–3x better long-term return for most homeowners. Here's the complete comparison.
How Solar Leases and PPAs Work
Under a solar lease, you pay a fixed monthly fee to the solar company, which owns and maintains the panels on your roof. Your electricity savings offset the lease payment. Under a Power Purchase Agreement (PPA), you pay per kWh for the electricity the panels produce, typically at a rate below your utility rate.
Both structures have $0 upfront cost — but both have important downsides.
How the Credit Change Affects Leases
Buyers no longer get a federal credit for systems installed after December 31, 2025. Leasing companies that own the system may still claim a commercial credit, and for projects starting after July 4, 2026 the system must be in service by December 31, 2027 to qualify. Some pass part of that value on through lower payments, which narrows the gap between leasing and buying.
20-Year Financial Comparison
Purchase (cash or loan): Cost with no federal credit: ~$28,000. Annual savings: $1,800. Over 20 years: ~$36,000 savings. Net benefit: ~$8,000.
Lease (typical terms): $100/month escalating at 2.9%/year. Over 20 years: ~$32,000 in lease payments. Savings offset: ~$36,000. Net benefit: ~$4,000.
The difference: about $4,000 over 20 years in favor of purchasing, and less if the lease price reflects a commercial credit.
When Leasing Makes Sense
Leasing makes sense if: you're unable to qualify for a solar loan, you prioritize simplicity and maintenance coverage over long-term return, the lease price reflects a commercial credit that buying can't match, or you plan to move within 5 years (though lease transfers to buyers can be complicated).
The Loan Alternative
Solar loans offer $0 down like a lease, and you own the system, but there's no longer a federal credit to pay down the principal. Compare the total cost of a loan against lease and PPA quotes before you choose.