Quick Answer
In 2026, buying solar still yields higher 25-year savings (~$24K vs ~$14K for lease) and adds $15-20K home value. But without the federal credit, payback extended to 10-13 years. Leasing offers $0 down, maintenance included, and indirect 30% federal benefit (company claims through 2027). The gap has narrowed—leasing is now more competitive for budget-conscious homeowners.
Lease vs. Buy: The Basics
This is one of the most important decisions you'll make in your solar journey, and I'll be honest—the answer isn't as clear-cut as it used to be. The 2026 tax credit changes have genuinely shifted the math.
From my experience:
Before 2026, I almost always recommended buying over leasing for homeowners who could afford it. The 30% federal credit made ownership a no-brainer. But now? I find myself recommending leases to people I never would have before—not because leasing got better, but because the advantage of buying got smaller.
The 2026 Shift
With the federal tax credit ended for purchased systems, leasing has become more competitive. Solar companies can still claim the 30% credit (Section 48E) on leased systems and pass savings to you.
Source: One Big Beautiful Bill (H.R.1, July 2025); IRS Publication 5797
Source: One Big Beautiful Bill (H.R.1, July 2025); IRS Publication 5797
Quick Comparison
| Factor | Buy (Cash/Loan) | Lease |
|---|---|---|
| You own the system | Yes | No |
| Upfront cost | $0 (loan) to full price | $0 |
| Federal credit (2026) | None | Company claims, you benefit |
| Maintenance responsibility | You | Solar company |
| 25-year savings | Higher | Lower but still positive |
Buying Solar (Cash or Loan)
How Buying Works
When you buy, you own the solar system on your roof. You pay for it either with cash upfront or through financing (solar loan, HELOC, etc.). All energy savings and any incentives go directly to you.
Pros of Buying
- Maximum long-term savings: Once paid off, electricity is essentially free
- Home value increase: Owned systems add more value than leased
- No monthly payments (cash): Or payments end when loan is paid
- Full control: Your system, your decisions
- State incentives: You keep all state tax credits and rebates
- SRECs: You own and sell any SRECs generated
Cons of Buying
- Higher upfront cost: Even with financing, you take on debt
- No federal credit (2026): Full price without 30% discount
- Maintenance is your responsibility: Though warranties help
- Longer payback period: Without federal credit, ~10-12 years vs. 7
- Performance risk: If panels underperform, that's your problem
The Math for Buying (2026)
| Item | Amount |
|---|---|
| System cost (8 kW) | $28,000 |
| Federal tax credit | $0 |
| State incentives (varies) | -$2,000 (example) |
| Net cost | $26,000 |
| Annual savings (estimated) | $2,000 |
| Simple payback | ~13 years |
| 25-year savings | ~$24,000 |
Leasing Solar
How Leasing Works
With a lease, a solar company owns the panels on your roof. You pay them a fixed monthly amount (usually $100-$200) for 20-25 years. They handle installation, maintenance, and monitoring. You use the electricity the panels produce.
The Federal Credit Advantage
Solar companies can claim the 30% federal credit (Section 48E) on leased systems through 2027. They use this to offer you lower lease payments—a benefit you can't get by buying in 2026.
Source: One Big Beautiful Bill (H.R.1, July 2025)
Source: One Big Beautiful Bill (H.R.1, July 2025)
Pros of Leasing
- $0 down: No upfront cost to go solar
- Federal credit benefit: Company passes savings to you
- Maintenance included: Company handles repairs and monitoring
- Predictable payments: Know exactly what you'll pay
- Performance guarantees: Many leases guarantee production
- Lower credit requirements: Often easier to qualify than loans
Cons of Leasing
- Don't own the system: Equipment belongs to the company
- Lower total savings: Company keeps profit margin
- Long-term commitment: 20-25 year contract
- Escalation clauses: Some leases increase payments 1-3% yearly
- Complicates home sale: Buyer must assume lease or you buy out
- No SRECs: Company keeps renewable energy certificates
- Less home value added: Leased systems add less to resale
The Math for Leasing (2026)
| Item | Amount |
|---|---|
| Upfront cost | $0 |
| Monthly lease payment | $120 |
| Annual lease cost | $1,440 |
| Annual electricity savings | $2,000 |
| Annual net savings | $560 |
| 25-year net savings | ~$14,000 |
Side-by-Side Comparison
| Factor | Buy (Loan) | Lease |
|---|---|---|
| Upfront cost | $0 | $0 |
| Monthly payment (years 1-15) | ~$200 (loan) | ~$120 (lease) |
| Monthly payment (years 16-25) | $0 (paid off) | ~$120-$150 |
| Total paid over 25 years | ~$36,000 | ~$36,000 |
| Total electricity savings | ~$50,000 | ~$50,000 |
| Net benefit (25 years) | ~$14,000 | ~$14,000 |
| Own system at end | Yes | No (unless purchased) |
| Home value impact | +$15,000-$20,000 | +$0-$5,000 |
Note: These are illustrative examples. Your actual numbers depend on system size, local electricity rates, and specific lease/loan terms.
The 2026 Factor
The end of the federal residential tax credit has changed the lease-vs-buy calculus:
Before 2026 (With Federal Credit)
- Buying was clearly better for most people
- 30% credit significantly reduced purchase price
- Payback period was 6-8 years for purchased systems
- Leasing made sense mainly for those with poor credit or no tax liability
In 2026 (No Federal Credit for Purchases)
- The gap between lease and buy has narrowed
- Leasing provides indirect access to federal benefits
- Purchase payback extended to 10-12+ years
- Leasing is now a legitimate choice for more situations
The New Calculation
In 2026, buying still yields higher total savings over 25 years, but the difference is smaller. Leasing now offers better cash flowand lower risk in exchange for giving up some long-term value.
Source: EnergySage Solar Loan Data; SEIA/Wood Mackenzie Market Insight
Source: EnergySage Solar Loan Data; SEIA/Wood Mackenzie Market Insight
When Leasing Makes Sense
Consider a lease if:
- You want $0 out of pocket: No loan, no upfront cost
- Cash flow matters more than total savings: Lower monthly expense
- You're risk-averse: Company handles everything
- Credit challenges: Can't qualify for good loan rates
- Might move in 5-10 years: Easier to transfer lease than sell with owned system
- Don't want to deal with maintenance: Company handles it
- No state incentives: Federal credit via lease may be your only benefit
When Buying Makes Sense
Consider buying if:
- You're a long-term homeowner: 15+ years in the home
- Maximizing total savings: Willing to wait for payback
- Strong state incentives: State credits offset federal loss
- Good credit: Can get favorable loan terms
- Have cash available: Cash purchase = best ROI
- Want to increase home value: Owned systems add more value
- In an SREC state: You keep the SREC income
- Want control: Your system, your decisions
Impact on Home Sale
[Editor's Note, Jan 2026]:Home sale complications are real, but often overstated. Most lease transfers go smoothly. Ask your solar company for their transfer success rate before signing.
Selling with a Purchased System
- Adds value: Studies show 3-4% home value increase
- Selling point: Buyers get free electricity
- Simple transaction: System transfers with home
- Warranty transfers: Most equipment warranties convey to buyer
Selling with a Leased System
- Lease transfer: Buyer assumes remaining lease payments
- Buyout option: You pay off lease before sale
- Credit requirements: Buyer must qualify with lease company
- Potential barrier: Some buyers won't want inherited lease
- Less value added: Leased systems add less to home price
Lease Transfer Reality
About 80% of lease transfers go smoothly, but 20% can be complicated. If the buyer doesn't want the lease, you may need to buy it out (typically $5,000-$15,000 remaining) or negotiate with the seller.
Source: EnergySage Solar Loan Data
Source: EnergySage Solar Loan Data
Questions to Ask Before Signing a Lease
- What happens if I sell my home?
- What's the buyout cost at various points in the lease?
- What are the buyer credit requirements for transfer?
- Is there a fee to transfer the lease?
- What happens if the buyer doesn't qualify?
Should You Lease or Buy?
Our AI can help you analyze your specific situation—timeline, budget, state incentives—to determine which option makes more sense for you.
Analyze My Options