Lease vs Buy vs PPA: How to Pay for Solar in 2026
How you pay for solar matters as much as what you pay. And in 2026, after the federal purchase credit expired, the choice changed: buying lost its 30% boost, while leases and PPAs kept a federal benefit. Here’s how the four options compare and who each one fits.
The four ways to pay
| Option | You own the system? | Upfront cost | Who claims the tax credit |
|---|---|---|---|
| Cash purchase | Yes | High (full price) | You — but 25D expired for 2026 purchases |
| Solar loan | Yes | Low/none | You — same expired-credit issue |
| Lease | No (provider owns) | $0 down typical | The provider (via 48E) |
| PPA | No (provider owns) | $0 down typical | The provider (via 48E) |
The key 2026 fact: the 30% Residential Clean Energy Credit (Section 25D) for systems you buy expired December 31, 2025. The commercial credit (Section 48E) that funds leases and PPAs still applies — so the provider keeps it and passes savings to you. Full background: the federal solar tax credit ending.
Buying (cash or loan)
You own the system outright.
Pros
- Lowest lifetime cost and the highest savings over 25 years.
- Adds the most home value.
- You keep all incentives (state/local) and net-metering credits.
Cons
- No more 30% federal credit on 2026 purchases — payback is longer than it was.
- High upfront cost (cash), or interest cost (loan).
- You’re responsible for maintenance (though panels are low-maintenance and warrantied ~25 years).
Best for: homeowners who can pay cash or get a low-rate loan, plan to stay long term, and want maximum lifetime savings.
Leasing
A provider owns the panels on your roof; you pay a fixed monthly fee to use the system, regardless of how much it produces.
Pros
- $0 or low money down.
- The provider claims the federal 48E credit and prices your payment accordingly.
- Maintenance and repairs are the provider’s responsibility.
Cons
- Lower lifetime savings than owning — you’re renting the equipment.
- Doesn’t add home value (and a lease can complicate a home sale; it must be transferred or bought out).
- Watch for annual “escalators” that raise your payment over time.
Best for: homeowners who want immediate bill savings with no upfront cost and no interest in ownership or maintenance.
PPA (Power Purchase Agreement)
Similar to a lease, but instead of a fixed monthly fee you pay per kilowatt-hour the system produces, usually at a rate below your utility’s.
Pros
- $0 down, and you only pay for power actually generated.
- Provider handles the credit, maintenance, and performance risk.
Cons
- Same ownership and resale caveats as a lease.
- Per-kWh rate may escalate annually; over 20+ years it can add up.
- Savings depend on the contracted rate vs. your utility rate.
Best for: homeowners who want $0 down and prefer paying only for what the system produces.
A 2026 middle ground: prepaid lease/PPA
Because owned systems lost their credit, prepaid TPO products are growing. You pay for 20–25 years of solar up front — often around 70% of the cost of buying outright — while the provider keeps the tax credit. You get close to ownership economics without needing to qualify for 25D yourself.
How to choose
Ask yourself, in order:
- Can I pay cash or get a cheap loan, and will I stay 10+ years? → Buying usually wins on lifetime savings, even without the federal credit. Check your payback period.
- Want savings with $0 down and no hassle? → Compare a lease and a PPA.
- Want ownership-like savings but less cash? → Look at a prepaid lease/PPA.
Whatever the structure, get multiple quotes, read the escalator terms, and confirm what happens if the provider is acquired or goes out of business — installer bankruptcies have hit the industry recently.
Bottom line
In 2026, buying still delivers the most lifetime savings but no longer comes with the 30% federal credit, so payback is longer. Leases and PPAs offer $0 down and still carry a federal benefit (claimed by the provider), at the cost of lower lifetime savings and ownership trade-offs. The right answer comes down to your cash, your time horizon, and how much you value owning the system. Start by checking whether solar is worth it for you in 2026.
Figures current as of June 2026. Educational information only — not financial or tax advice. Read every contract carefully and compare multiple offers.