Solar lease vs buying: which is better in 2026?
Buying, a loan, a lease and a PPA put the same panels on your roof with very different money behind them.
Buying, with cash or a loan, usually saves more over the life of the system because you keep all the savings and any tax benefit of owning the system. A lease or PPA costs little upfront, but the company owns the panels and the contract can raise your payment every year. It fits people who can't use the savings of ownership or don't want maintenance.
Four ways to pay, side by side
| Cash | Loan | Lease | PPA | |
|---|---|---|---|---|
| Who owns the panels | You | You | The company | The company |
| Upfront cost | Full price | Low or none | Low or none | Low or none |
| What you pay | Nothing after install | Monthly loan payment | Fixed monthly payment | Price per kWh produced |
| Tax benefits of ownership | You | You | The company, as owner | The company, as owner |
| Price increases | — | Watch for re-amortization | Possible escalator | Possible escalator |
| Selling the home | Panels stay with the home | Pay off or transfer the loan | Buyer takes over or you buy out | Buyer takes over or you buy out |
With a lease or PPA you don't own the system and are not entitled to its tax benefits (DOE; FTC). Exact terms are in each contract.
What an escalator does to a lease payment
Lease and PPA contracts often include escalators that raise the price by 1 to 5% a year over terms of 6 to 25 years (CFPB). A $100 monthly payment:
| Escalator | Year 1 | Year 10 | Year 20 | Paid over 20 years |
|---|---|---|---|---|
| 1% a year | $100 | $109 | $121 | $26,423 |
| 3% a year | $100 | $130 | $175 | $32,244 |
| 5% a year | $100 | $155 | $253 | $39,679 |
Compare that with the savings the system gives you: if the payment grows faster than your utility bill savings, the lease can end up costing more than it saves.
Loans have their own traps
- The CFPB found solar loans with dealer fees that often add 10–30% of the cash price, sometimes more than 50%, to the amount you borrow.
- Many loans assumed you'd prepay part of the balance with a federal tax credit; if you don't, the payment rises. That credit is not available for systems placed in service after December 31, 2025 (IRS).
- Ask for the cash price and the loan's total cost side by side.
How common leases are near you
Share of home solar systems in utility records that were leased or under a PPA:
| City | Leased or PPA | Years |
|---|---|---|
| Elizabeth, NJ | 56% | 2022–2023 |
| Toms River, NJ | 47% | 2022–2023 |
| New York, NY | 43% | 2022–2024 |
| Yonkers, NY | 38% | 2022–2024 |
| Chula Vista, CA | 31% | 2022–2023 |
| Fresno, CA | 29% | 2022–2023 |
| Surprise, AZ | 29% | 2022–2023 |
| Clovis, CA | 28% | 2022–2023 |
| Oceanside, CA | 26% | 2022–2023 |
| Bakersfield, CA | 24% | 2022–2023 |
| San Diego, CA | 18% | 2022–2023 |
| San Jose, CA | 18% | 2022–2023 |
| Carlsbad, CA | 13% | 2022–2023 |
| Phoenix, AZ | 11% | 2022–2023 |
| Peoria, AZ | 10% | 2022–2023 |
| Scottsdale, AZ | 8% | 2022–2023 |
| Glendale, AZ | 4% | 2022–2023 |
| Chandler, AZ | 4% | 2022–2023 |
| Gilbert, AZ | 2% | 2022–2023 |
| Tempe, AZ | 0% | 2022–2023 |
| Austin, TX | 0% | 2022–2024 |
Questions to ask before you sign a lease or PPA
- Does the payment or price per kWh increase, by how much and how often?
- Who maintains and insures the system, and what if it underperforms?
- Can the contract be transferred to a buyer when you sell, and what does a buyout cost?
- What happens at the end of the term: renewal, purchase or removal?
The FTC also recommends getting detailed bids from several companies before you lease or sign a PPA (FTC).
Run your own numbers
Estimate what the system would save you if you owned it, for your ZIP and bill.
Keep reading
- How much solar panels cost in 2026 — Average price per watt by state and city, and what a 5, 7 or 10 kW system costs before incentives.
- Is solar worth it in 2026? — Payback without the federal credit in the cities I cover, and when solar is a weak deal.
- Disadvantages of solar panels — Nine downsides to weigh before you sign, with numbers from real tariffs.
Installer records by city: solar companies in Phoenix, solar companies in Tucson, solar companies in San Antonio, solar companies in Austin, solar companies in San Diego, solar companies in Fresno, solar companies in Chandler, solar companies in Scottsdale, solar companies in Gilbert, solar companies in Glendale, solar companies in Tempe, solar companies in Peoria, solar companies in Surprise, solar companies in San Jose, solar companies in Bakersfield, solar companies in Clovis, solar companies in Chula Vista, solar companies in Oceanside, solar companies in Carlsbad, solar companies in Toms River, solar companies in New York, solar companies in Elizabeth, solar companies in Yonkers.
Updated 2026-09-26.