The short answer
- Buying (cash or loan) costs the most upfront but usually saves the most over 20+ years, and the system adds to your home. Since 2026 there's no federal credit for buyers.
- Leasing or a PPA costs little or nothing upfront: a company owns the system, claims the federal credit that's still available to it, and charges you a monthly fee (lease) or a price per kWh (PPA).
- Read the escalator (yearly price increase), the term (often 20–25 years), what happens when you sell, and who pays for repairs.
The options
| Cash | Loan | Lease | PPA | |
|---|---|---|---|---|
| Upfront cost | Full price | Little or none | Little or none | Little or none |
| Who owns it | You | You | The company | The company |
| Federal credit (2026) | None | None | Company claims it | Company claims it |
| Monthly cost | None | Loan payment | Fixed fee, may rise | Price per kWh, may rise |
| Repairs | You (warranties) | You (warranties) | Usually the company | Usually the company |
| Selling the home | Adds to the sale | Pay off or transfer | Buyer takes it over | Buyer takes it over |
Why leases came back in 2026
When the homeowner credit (25D) ended on Dec 31, 2025, the business credit (48E) stayed for systems a company owns, for solar placed in service by Dec 31, 2027 (or later if construction began by Jul 4, 2026) and for batteries (One Big Beautiful Bill Act). That gives lease and PPA companies a cost advantage they can pass on.
Questions to ask before you sign a lease or PPA
- What's the yearly escalator? 0% to 3% is common; over 20 years, 2.9% adds about 77% to the payment.
- What happens when I sell? How does the buyer qualify, and what if they won't take it over?
- Can I buy the system out early, and at what price?
- Who removes and reinstalls panels if the roof needs work, and who pays?
- Is production guaranteed? What's paid if the system underperforms?
- How is the federal credit reflected in my price?
Loans: watch the fees
Some solar loans carry a "dealer fee" built into the price to buy down the interest rate. Ask for the cash price and the loan price side by side. California requires a disclosure document showing the total cost before you sign; see your rights.
Checked against official sources on Oct 1, 2026. Sources are linked in the text. Not legal, tax or financial advice.