Paying for solar
Solar lease vs buy in 2026: how to choose
Cash, loan, lease or PPA. Each one moves cost, risk and paperwork to a different place. Here's how to pick the one that fits your money and your plans.
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By the Golden Hour Energy editorial team. How we research and check our guides
Buying solar usually costs the least over the life of the system. Leasing usually costs the least up front. The right pick depends on which of those matters more to you, and on the fine print. Three details in that fine print decide most deals: whether a lease payment rises every year, whether a loan hides a dealer fee, and what happens if you sell the house. One 2026 change also matters: buyers no longer get a federal credit, while lease and PPA providers still can. The details of that are in our 2026 tax credit guide.
The four ways to pay, in plain terms
Cash
You pay for the system up front and own it outright. Your only ongoing bill is the smaller utility bill.
Solar loan
You own the system and repay a lender over time. The interest rate and fees decide whether this beats a lease. Lender health matters too: a large solar lender, Mosaic, reportedly filed for Chapter 11 in June 2025 (Sacra).
Lease
A company owns the system and you pay a set monthly amount to use it. Many leases include an escalator, a yearly increase in the payment.
PPA (power purchase agreement)
A company owns the system and you pay for the power it makes, per kWh. Your payment rises and falls with production.
| Topic | Buy (cash) | Buy (loan) | Lease or PPA |
|---|---|---|---|
| Upfront | Full system price | Little to nothing, by lender | $0-down options may be available |
| Who owns it | You | You, while repaying | The provider |
| Federal credit in 2026 | None (25D ended) | None (25D ended) | Provider may claim 48E, which can lower price |
| Monthly bills | Smaller utility bill | Utility bill plus loan payment | Utility bill plus lease or PPA payment |
| Maintenance | Yours, with warranties | Yours, with warranties | Usually the provider's |
| Long-run cost | Usually lowest | Depends on rate and fees | Usually highest total paid |
| Credit check | None | Lender runs one | Provider runs one |
| Selling your home | Nothing to transfer | Pay off or transfer | Buyer takes over or you buy out |
| Watch for | Tying up savings | High rates, dealer fees | Escalators, long terms |
The case for buying
When you own the system, every dollar it saves is yours, for as long as it runs. There's no escalator and no contract to hand over when you sell. If you have savings you're comfortable using, or you qualify for a loan with a fair rate and no padded fees, buying usually comes out ahead over the long haul, even without the federal credit. It also keeps your options open on your utility plan, battery settings and future upgrades.
The case for leasing
A lease or PPA asks for little or nothing up front, and the provider usually handles monitoring and repairs. Because the provider can still claim a federal credit, it may price your payments below what an equivalent purchase would cost you per month. That matters most with a battery, which adds five figures to a cash price. If your priority is a lower bill now rather than the lowest lifetime cost, a lease can make sense.
Escalators, dealer fees and selling the house
Escalators. Many leases raise the payment a set percentage each year. Over a long term, a small yearly increase adds up, so ask for the payment in the final year, not just the first.
Dealer fees. Some solar loans carry a fee, built into the loan amount, that buys down the advertised interest rate. Ask whether there is one and how much it is, in writing.
Selling. An owned system goes with the house. A lease or PPA has to be taken over by the buyer or bought out, and the contract sets the terms. Ask for the buyout formula before you sign.
Providers check credit. Palmetto's LightReach, for example, starts with a soft inquiry, and installer financing guides list minimum scores of about 650 to 680 FICO (installer guide, April 2026). Some lenders also add a verification call for borrowers 65 and older (GoodLeap guide).
- Buy if you have cash or a low-rate loan and plan to stay put.
- Buy if you want full control of the system and no contract to transfer.
- Lease if you want little or nothing up front.
- Lease if you'd rather the provider handle repairs.
- Skip a lease with a steep escalator you don't fully understand.
- Skip any loan where the dealer fee isn't disclosed.
- Skip anyone who says buyers still get a federal credit in 2026.
- Skip any deal that depends on a rebate you haven't been approved for.
Questions to ask before you sign either one
- What is the total I'll pay over the full term, including any escalator or interest?
- Is there a dealer fee built into the loan or the system price?
- For a lease or PPA, are you claiming the federal credit, and how is it reflected in my price?
- What happens if I sell the house, and what does a buyout cost?
- Who handles repairs, and what does the production guarantee actually cover?
The CPUC's guide says the installer must give you a Solar Energy System Disclosure Document with total costs, and should explain how any interest or escalation rates change your payments (CPUC). It also reminds buyers that solar reduces but doesn't erase the utility bill, and that a loan, lease or PPA adds its own monthly bill. More on that in claims to walk away from.