Buying vs. Leasing Solar: The Ultimate Financial Showdown (2026)
Should you buy your panels with cash, take out a loan, or sign a PPA lease? We break down the 25-year savings of each option to find the best ROI.
The $30,000 Question
Once you decide to go solar, the next question is arguably more important than the panels themselves: How are you going to pay for it?
The financing method you choose dictates who owns the system, who gets the tax credits, and ultimately, how much money you save. In 2026, the market is split between three main models: Cash Purchase, Solar Loan, and Lease (PPA).
This guide strips away the sales pitch to parse the raw financial reality of each option.
Option 1: Cash Purchase (The ROI King) đź‘‘
Mechanism: You write a check for the full amount upfront. You own the system 100% from Day 1.
- Upfront Cost: High ($20,000 - $35,000).
- Tax Credit: You keep 100% of the 30% Federal ITC.
- Monthly Payment: $0.
- 25-Year Savings: Maximized. (You pay no interest fees).
Verdict: If you have the liquidity, Cash is King. It offers the highest Internal Rate of Return (IRR) because you avoid all dealer fees and interest payments.
Option 2: Solar Loan (The Middle Ground)
Mechanism: You take out a loan (HELOC, detailed solar loan, or personal loan) to pay for the system. You own the system, but the bank holds a lien on the hardware until paid off.
- Upfront Cost: $0 down usually.
- Tax Credit: You still keep the 30% Federal ITC. (Most loans require you to pay this amount back into the loan within 18 months to keep payments low).
- Dealer Fees: This is the hidden trap. Low-interest solar loans (e.g., 2.99%) often come with massive “Dealer Fees” (points) added to the principal, sometimes increasing the cost by 20-30%.
Verdict: A good option if you want ownership benefits but lack cash. Beware of dealer fees. Often, a higher interest rate from your local credit union (with zero fees) is cheaper than a “low interest” solar loan with a 25% markup.
Option 3: Lease / PPA (The “Hands-Off” Trap) ⚠️
Mechanism: A third-party company (like Sunrun or Sunnova) installs the panels on your roof for free. They own the system. You agree to buy the power generated by the panels at a set rate (e.g., $0.12/kWh) for 25 years.
- Upfront Cost: $0.
- Tax Credit: The Leasing Company takes the 30% credit, not you.
- Maintenance: The leasing company handles all repairs.
- Home Sale: Selling a home with a solar lease can be a nightmare. The buyer must qualify for and agree to take over your lease.
Power Purchase Agreement (PPA): Similar to a lease, but you pay for the power produced ($/kWh) rather than a flat monthly fee for the equipment.
Verdict: Generally the worst financial option. While easy, you give away thousands in tax incentives and equity. Only choose this if you have zero tax liability or simply cannot qualify for a loan.
Comparison Table: 25-Year Savings Outlook
Scenario: A standard 8 kW System in a state with high electricity rates.
| Metric | Cash | Loan (7% APR) | Lease / PPA |
|---|---|---|---|
| System Cost | $24,000 | $24,000 (+ Interest) | $0 |
| Federal Tax Credit | +$7,200 (You keep) | +$7,200 (You keep) | $0 (They keep) |
| Total Payments | $16,800 | ~$32,000 | ~$45,000 |
| Asset Value | High (Home Equity) | Medium | None |
| 25-Year Net Savings | $80,000+ | $65,000 | $35,000 |
Conclusion
Ownership matters. In almost every scenario, owning the system (Cash or Loan) vastly outperforms renting your roof (Lease). The 30% Federal Tax Credit is too valuable to give away to a corporation. Unless you are fully leveraged and cash-poor, steer clear of the PPA salesman and find a way to buy the asset.