Solar Lease vs Buy in 2026: Which Wins?

The lease-versus-buy decision looks different in 2026 than it did a year ago. The reason is a single tax change: the 30% federal residential clean energy credit (Section 25D) was repealed for purchased systems installed after December 31, 2025. Buyers who pay cash or finance now get no federal credit. But the separate commercial credit that leasing companies claim remains available through 2027 — so third-party-owned leases and power purchase agreements (PPAs) can still tap a federal incentive that individual buyers can’t. That doesn’t automatically make leasing the better deal, but it does change the comparison.

Lease vs buy at a glance

Factor	Buy (cash or loan)	Lease / PPA
Up-front cost	$0 (loan) to ~$18k–$35k (cash)	$0 down
Who owns the system	You	The provider
Federal credit in 2026	None for buyers	Provider claims commercial credit (through 2027)
Monthly payment	Loan payment or none (cash)	Fixed lease payment or per-kWh PPA rate
Long-term savings	You keep all of it	Provider keeps most; you get a discount
Home value impact	Owned solar can add value	Lease may complicate home sale
Maintenance	Your responsibility	Provider’s responsibility
Escalator	None	Often 1%–3% annual payment increase

What buying actually means in 2026

When you buy, you own the panels outright. Every kWh they produce offsets power you’d otherwise buy from the utility, and after the system pays for itself, the electricity is effectively free for the rest of the panels’ 25-plus-year life. The trade-off is cost: with no federal credit for buyers, a cash purchase runs roughly $18,000 to $35,000 for a typical home (see our solar panel cost guide), and a loan spreads that out but often bakes in dealer fees of 10%–30%.

Ownership also captures the full upside of good net metering and rising utility rates. If your electricity prices climb 3%–5% a year, an owned system’s savings grow with them. And owned solar is generally treated as a home-value add rather than a liability at resale.

What leasing and PPAs actually mean

With a lease, you pay a fixed monthly amount to use panels the provider owns and installs on your roof. With a PPA, you instead pay a set price per kWh the system produces. Either way, you put nothing down and the provider handles maintenance, monitoring, and repairs.

The catch is that the provider — not you — owns the system and claims the federal commercial credit, so most of the long-term savings stay with them. You typically save something like 10%–30% versus your current utility bill, but you don’t build equity, and many contracts include an annual escalator that raises your payment 1%–3% a year. Over 20–25 years, that escalator can erode the early savings.

The 2026 tax-credit angle

This is the part that trips people up. It’s true that a leasing company can still claim a federal credit in 2026 while a buyer cannot. But that credit goes to the provider, and how much of it flows back to you depends entirely on how competitively they price the lease. A lease is not “the way to get the tax credit” — it’s a way for the provider to get it and maybe share some. Always compare the lease’s total 20–25 year cost against buying, not just the first-year discount. For the full rules, see our 2026 federal solar tax credit guide.

Also worth checking: some states still offer their own rebates or credits that can apply to purchased systems, partially offsetting the loss of the federal buyer credit. Those are separate from anything federal and vary widely.

What drives which option wins

Whether you can use the cash. If you have $20k–$35k sitting idle, buying with cash almost always produces the lowest lifetime cost — no interest, no dealer fee, no provider margin.

Your appetite for maintenance. Leases hand off all upkeep and monitoring. For hands-off owners, that convenience has real value.

How long you’ll stay in the home. Buying rewards long ownership. If you might sell in a few years, a lease can be simpler to walk away from — though it can also complicate a sale if the buyer must assume it.

Your state’s incentives and net metering. Strong net metering and state rebates favor buying, because you keep all the upside. Weak policies narrow the gap.

The escalator. A lease with a 2.9% annual escalator can cost far more over 25 years than one at 0%–1%. Read that clause carefully.

How to compare honestly

• Get the cash price, the loan terms (including any dealer fee), and the lease/PPA quote for the same system.
• Ask each installer to project 25-year total cost for all three paths.
• Confirm the lease’s escalator rate and what happens at end of term (buyout, removal, renewal).
• Check whether your state offers incentives that apply to a purchase.

FAQ

Is leasing better because I can’t get the tax credit as a buyer? Not necessarily. The provider gets the credit, not you, and may or may not pass much of it along. Compare total lifetime cost, not just who technically claims a credit.

Do I still get 30% off if I buy in 2026? No. The federal residential purchase credit ended for systems installed after December 31, 2025. Only third-party-owned leases and PPAs can tap a federal (commercial) credit, through 2027.

Which is cheaper over 25 years? For buyers who can afford cash, owning is almost always cheapest long term because you keep all the savings. Leasing wins mainly on convenience and zero up-front cost.

Can I buy out my lease later? Many leases include a buyout option after a set number of years, priced at fair market value. Terms vary, so confirm before signing.

Does a lease hurt my home sale? It can. A buyer must be willing to assume the lease or you must buy it out first. Owned solar is generally simpler at resale.

What about a solar loan instead of a lease? A loan keeps ownership with you (and the long-term savings) but watch for dealer fees baked into “$0 down” offers. Always compare the loan-quoted price to the cash price.

Run your own numbers

The right answer depends on your cash position, your state, and how long you’ll stay put. Start with our free solar cost calculator to see the out-of-pocket price and payback for buying, then request lease and PPA quotes and compare all three over the full contract term. For the broader question of whether solar pays off where you live, read is solar worth it in 2026 and our solar payback period guide.