Most homeowners I talk to have already made up their minds before they ask me the question. They’ve seen the lease ads, they’ve heard the “go solar for $0 down” pitch, and they assume leasing must be some kind of scam if financial guys like me keep warning against it. Or they’ve talked to a neighbor who owns panels and won’t shut up about his electric bill, so buying must obviously be the move. I’ll be honest: neither camp is entirely right, and the honest answer is actually more interesting than the party line from either side.

I’ve worked through the numbers on hundreds of solar deals over the years, and what surprised me most early on was how often the “wrong” choice on paper worked out perfectly fine for the homeowner, while someone who made the “right” choice by the textbook still ended up frustrated. Context matters here more than almost any financial decision in home improvement. So let me walk you through what I actually found when I went deep on this.

The Basic Mechanics (and Why They Matter More Than People Think)

When you buy a solar system outright, or finance it with a solar loan, you own the equipment. You claim the 30% federal Investment Tax Credit (the ITC, currently sitting at 30% through 2032 under the Inflation Reduction Act), any applicable state incentives, and the full value of every kilowatt-hour those panels produce for the next 25 or 30 years. A typical 8-kilowatt residential system installed today costs somewhere between $20,000 and $28,000 before incentives, based on EnergySage’s market data, which puts average national pricing around $2.85 per watt as of 2026. After the 30% federal credit, you’re looking at $14,000 to $19,600 net cost depending on system size, roof complexity, and where you live.

A lease is completely different. A third-party company (SunPower, Sunrun, Tesla Energy, and others) owns the panels. They install them on your roof, and you pay a fixed monthly rate, typically somewhere between $80 and $150 per month, for the electricity they generate. Some agreements are structured as a Power Purchase Agreement, or PPA, where you pay per kilowatt-hour rather than a flat monthly fee. Either way, you don’t own the equipment, you don’t get the tax credit, and your contract usually runs 20 to 25 years with annual escalator clauses that bump your payment 1% to 3% per year.

That escalator is the part nobody reads carefully enough. I’ve sat with homeowners who were shocked to realize their “$100/month lease” would cost $122/month in year 10 and $134/month in year 15. It doesn’t sound catastrophic, but it quietly eats into the savings.

The Numbers Side by Side

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Let me put the comparison on the table, because I find most articles bury these figures in prose where they’re hard to compare:

FactorPurchase (cash or loan)Solar Lease / PPA
Upfront cost$0 (loan) or $14K-$20K (cash after ITC)$0
Federal tax credit (30% ITC)You keep it (~$6,000-$8,400 value)Goes to leasing company
Monthly cost$120-$180/mo (loan, 10-yr) or $0 (paid cash)$80-$150/mo fixed (escalating)
Electricity bill impactNear-zero (you own the production)Reduced but not eliminated
25-year net savings estimate$30,000-$60,000 (varies by market)$10,000-$20,000 (varies)
System ownershipYouThird-party company
Home sale complicationsMinimal to noneBuyer must assume lease or you buy out
Maintenance responsibilityYours (or warranty coverage)Leasing company’s
Equipment quality controlYou chooseCompany chooses

The 25-year savings gap is real. NREL research on long-term solar economics consistently shows that ownership outperforms lease arrangements in total value capture over a 20+ year horizon. The reason is simple: once a purchased system is paid off (usually 7 to 10 years on a loan), you’re essentially generating free electricity. Lease payments don’t stop.

Where Leasing Actually Makes Sense

Here’s where I’ll push back on the “leasing is always worse” crowd. A few scenarios where a lease genuinely makes sense:

You can’t use the tax credit. The 30% ITC is a tax credit, not a refund. If your federal tax liability is below $6,000 in a given year (retired homeowners with modest income, for example), you won’t capture the full value. Leasing company captures it instead, but they price that into the lower monthly rate. This is actually a legitimate use case.

You’re selling in 5 to 7 years. The payback period on a purchased system is typically 6 to 12 years depending on your electricity rate and system size. If you’re planning to move before you break even, you haven’t “lost” money on a purchase necessarily (your home value likely increased), but the math is less clean. A lease with no upfront cost might make more sense if your time horizon is short.

You genuinely don’t want to think about it. Maintenance, monitoring, inverter replacement around year 10 to 12 (typically $1,000 to $2,500 depending on whether you have string inverters or microinverters), dealing with roof repairs under owned panels. None of that is your problem with a lease. Some people value the peace of mind enough that it’s worth the financial tradeoff.

Scenario example: A retired couple in Phoenix, fixed income, tax liability around $2,000/year. They signed a Sunrun lease at $105/month with a 2% annual escalator. Their prior electric bill averaged $180/month with APS. Net savings in year one: $75/month. After 25 years accounting for escalators, they saved approximately $14,000 total. Had they purchased a comparable system outright with a loan at 6.99% (a common solar loan rate right now), they’d have spent more per month in the first 10 years but saved closer to $42,000 net over 25 years. The purchase wins on paper. But they couldn’t use the tax credit, didn’t want maintenance headaches, and had no loan appetite. For them specifically, the lease was defensible.

The Home Sale Problem Is Real, But Overblown

I’ve heard solar installers dismiss lease transfer concerns as a non-issue. I’ve heard real estate agents treat it like a deal-killer. The truth is somewhere in between, which is frustrating but honest.

Transferring a solar lease to a buyer requires the leasing company’s approval and the buyer’s willingness to assume the remaining contract (sometimes 15 to 18 years worth). Most buyers can and do assume leases without issues. But I’ve personally seen two deals slow down significantly because buyers’ lenders had concerns about the lease being a lien on the property. And in a competitive housing market where buyers can be picky, even a small friction point can cost you.

If you buy, this goes away entirely. The panels are a home improvement, similar to a new roof, and buyers simply inherit a house with low electricity costs.

Financing Options for Ownership (Because “Go Solar” Doesn’t Have to Mean “Pay Cash”)

This is the part that changes the calculation for most people. You don’t have to choose between a lease and writing a check for $20,000. Solar-specific loans from lenders like Mosaic, Goodleap, and Sunlight Financial are widely available, typically ranging from 4.99% to 8.99% APR as of this year depending on credit score and loan term. A 10-year loan on a $16,000 net system (after ITC) runs roughly $165/month at 6.99%. For a homeowner who was paying $200/month in electricity, that’s still cash-flow positive from day one, and they own the asset.

What surprised me when I started looking at the loan comparison more carefully: many solar installers push their preferred financing partner, which isn’t always the cheapest option. Getting a competing quote from your local credit union or using a HELOC (if you have equity and good rates) can save $1,500 to $4,000 over the loan term.

Scenario example: A homeowner in Austin, Texas, 2,000 sq ft house, $190/month average electric bill (Oncor service territory). Purchased a 9.5 kW system at $27,000 gross, received $8,100 in federal ITC, net cost $18,900. Financed with a 10-year Mosaic loan at 5.99%, payment $209/month. Electric bill dropped to roughly $15/month. Net monthly change: paying $29 more per month than before. After loan payoff in year 10, saves $190/month with a system expected to perform well into the mid-2040s. 25-year estimated net savings: roughly $48,000.

Monitoring and the Ownership Experience

One thing that doesn’t come up enough: owning panels means you’re responsible for knowing if something’s wrong. If a panel or microinverter fails silently, you could lose weeks of production without noticing unless you’re watching your monitoring app.

I use a Sense Home Energy Monitor (around $350 on Amazon) alongside my system’s built-in monitoring, and the combination catches anomalies I’d otherwise miss. Most installed systems come with manufacturer monitoring apps (Enphase’s Enlighten, SolarEdge’s app, etc.), but having a second layer doesn’t hurt. (The site may earn a commission on Amazon purchases.)

Sources

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