Solar Lease vs Buy: How the Math Changed in 2026
Published August 15, 2026 · Collective Solar, Northridge, CA
In 2026, a lease or PPA is the only way a new home solar system captures a federal incentive — the purchase credit ended December 31, 2025 — so the solar lease vs buy question has a different answer than it did two years ago. The short version: buying still wins on lifetime value if you have the cash and plan to stay in the home; leasing usually wins on day-one savings and zero responsibility. The rest of this guide is the long version, with the trade-offs both ways.
What's the difference between leasing and buying solar?
Buying means you pay for the system — cash or a loan — and own it outright. The production is yours, the maintenance is yours, and the equipment becomes part of the house.
Leasing means a solar company installs and owns the system on your roof, and you pay a fixed monthly amount for it. A close cousin is the PPA (power purchase agreement), where you instead pay per kilowatt-hour for the power the system produces. Contracts typically run 20–25 years. We break down the per-kWh version in how a solar PPA works.
How do lease and buy compare side by side?
| Buy (cash or loan) | Lease / PPA | |
|---|---|---|
| Who owns the system | You do, from day one | The solar provider, for the contract term |
| Upfront cost | Full price in cash, or a down payment with a loan | Typically $0 down |
| Maintenance & repairs | Your responsibility once workmanship warranties lapse | Provider's responsibility — monitoring, repairs, inverter swaps |
| Federal incentives after 2025 | None — the 25D purchase credit ended Dec 31, 2025 | The owner claims the 48E commercial credit and can price it into your payment |
| Monthly cost | Loan payment (or nothing, if cash), plus a smaller utility bill | Lease/PPA payment, usually with an annual escalator, plus a smaller utility bill |
| When you sell the home | System transfers with the house as an owned asset | Buyer assumes the contract (and must qualify), or you buy it out |
| Long-term value | Highest — after payoff, the power is essentially free | Lower — you save monthly but never stop paying during the term |
What changed when the tax credit ended?
Through 2025, buying carried a built-in 30% discount: the federal 25D credit came back to you at tax time. That credit is gone for 2026 purchases, while the commercial credit (Section 48E) behind leases and PPAs survived. So the incentive gap now points the other way — the leased system on your roof still has a 30% federal credit behind it; the purchased one doesn't. We cover the full picture, including California-level programs, in the solar tax credit in 2026.
Two honest counterweights before you conclude leasing always wins. First, equipment prices are a fraction of what they were a decade ago, so a purchased system can still pay for itself on bill savings alone — especially on LADWP, where exported power is still credited near the retail rate. Second, California's property tax exclusion for solar is scheduled to sunset January 1, 2027, which mildly favors completing a purchase sooner rather than later under current law.
Who is buying right for?
- You can pay cash, or borrow cheaply. Without the credit, the return depends almost entirely on avoided utility bills versus what the money costs you.
- You plan to stay 10+ years. Ownership rewards patience: once the system is paid off, decades of production cost you nothing but upkeep.
- You want the asset. An owned system transfers cleanly in a home sale, and nobody else has a claim on your roof.
- You're comfortable owning maintenance. Inverters typically need replacing during a system's life, and repairs are on you — that's a real cost to budget, not a reason to panic.
Who is a lease or PPA right for?
- You want savings without writing a check. Zero-down structures are built so the monthly payment plus your remaining utility bill lands below what you pay today.
- You want the federal incentive working for you. In 2026 the lease/PPA structure is the only route that still monetizes a federal credit on a new home system.
- You don't want to think about the system. Monitoring, repairs, and replacements are the provider's problem for the whole term.
- Your tax situation was never going to use a credit anyway. Even before 2026, homeowners with little tax liability got less from buying than the brochures implied. Leasing never depended on your tax bill.
What happens when you sell your house?
This is where the two paths feel most different, so here is the unvarnished version. An owned system is simply part of the house — it transfers with the deed and is generally a selling point, since the buyer inherits lower bills with no contract attached.
A leased or PPA system adds a step: the buyer needs to assume the contract (which usually involves a credit check), or you buy out the remaining term before closing. Most transfers go through fine, but it's one more thing in escrow, and a hesitant buyer can use it as a negotiating chip. If you're likely to sell within a few years, weigh that friction honestly — or ask us to model the buyout numbers before you sign anything.
Our honest take
We sell both, so we have no reason to push you either way. If you have the cash and a long horizon — especially on LADWP — buying is usually the bigger number over 25 years, even without the credit. If you want zero down, zero maintenance, and day-one savings, a lease or PPA is the practical winner in 2026, because it's the structure that still captures the federal incentive.
What we won't do is keep pitching a lease after you've said you're paying cash — a complaint we hear constantly about this industry. Bring us your bill, and we'll put both options side by side with real numbers: system size, payment, escalator, and the break-even year. Start with our solar savings calculator, see how solar installation in Los Angeles works end to end, or request a free estimate and we'll run your address.