Free Solar Tool
Solar Lease vs. Buy Calculator
Compare 25-year net savings for cash purchase, solar loan, and solar lease — including the 30% federal ITC and lease escalator. See which path actually puts more money in your pocket.
See Solar Proposal SoftwareCompare Solar Lease vs. Buy Over 25 Years
Enter your system details, lease terms, and loan terms to see a side-by-side 25-year financial comparison.
Avg US utility rate increase ~3%/yr
Cash Purchase
Solar Loan (20 yr)
Solar Lease
Total 25-year utility savings (all owned options): $49,585 — based on 8,500 kWh/yr at $0.16/kWh escalating 3%/yr
Estimates over 25 years. Actual results vary by system degradation (~0.5%/yr), local utility rates, financing terms, and individual tax situation. Consult a tax advisor to confirm ITC eligibility.
What you give up with a lease
The 30% federal tax credit
The ITC belongs to the system owner — not you. On a $25,000 system, that's $7,500 you hand to the leasing company. Every solar lease or PPA means the leasing company captures this credit while you get none of it.
Ownership and home value
Owned solar adds $15,000–$25,000 to home value on average. Leased solar complicates your sale — buyers must assume the lease or you pay the buyout. Many buyers won't touch a leased-solar home.
Escalating payments
Most leases escalate 2–3% annually. A $120/month payment becomes $163/month after 10 years and $222/month after 20 years. If utility rates don't rise faster than your escalator, you lose the arbitrage the lease promised.
Control over your roof
The leasing company has a lien on your roof equipment and can enforce access rights for maintenance. Refinancing your mortgage becomes more complicated with a solar lien on the property.
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SubcontractorHub helps solar contractors present lease vs. loan vs. cash comparisons in every proposal — with ITC savings, financing options from GoodLeap and Sungage, and digital signature on the spot.
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Lease vs. loan vs. cash side by side
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Solar Lease vs. Buy FAQ
Is it better to lease or buy solar panels?
Buying almost always wins long-term. When you own the system you capture the 30% ITC, receive all utility savings, and own an asset that adds home value. A lease hands the ITC to the leasing company and your payments escalate 2–3%/yr. The 25-year net savings difference can easily exceed $20,000–$40,000.
Do you get the solar tax credit if you lease?
No. The 30% federal ITC goes to the system owner. If you lease, the leasing company owns the panels and claims the credit — not you. On a $25,000 system, that's $7,500 you give up by leasing.
Can you sell your house with leased solar panels?
Yes, but it complicates the sale. The buyer must assume the lease or you pay the buyout to transfer clean title. Many buyers are reluctant, and some lenders restrict mortgages on leased-solar homes. Owned solar adds $15,000–$25,000 in value with no complications.
What happens at the end of a solar lease?
Typically 3 options at end of 20–25 yr term: renew the lease, purchase the system at fair market value ($5,000–$15,000), or have panels removed at no charge. Review your agreement carefully — end-of-term options are often buried in the contract.
Is a solar PPA the same as a lease?
Similar but not identical. A lease charges a fixed monthly payment. A PPA charges per kWh produced — payment varies with production. Both keep the company as system owner, meaning you get no ITC in either case.
What is a solar loan vs. a solar lease?
A solar loan lets you own the system while financing the purchase. You claim the 30% ITC, all savings go to you, and you own an asset. A lease means you never own the system. Solar loans consistently outperform leases in 20+ year financial models for homeowners with sufficient tax liability.
How much do you save with owned vs. leased solar?
On a $25,000 system: cash purchase nets ~$45,000–$60,000 over 25 years. A solar loan nets ~$30,000–$45,000. A lease nets ~$8,000–$20,000 (savings minus escalating payments). Use the calculator above for your specific numbers.
What is a solar lease escalator?
The annual % increase in your lease payment. Most leases escalate 2–3%/yr. A $120/month lease at 2.9% escalator becomes $140/month after 5 years, $164/month after 10 years, $227/month after 20 years. If utility rates don't rise faster than your escalator, the promised arbitrage disappears.
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Book a Free DemoEstimates over 25 years. Actual results vary by system degradation, utility rate changes, financing terms, and individual tax situation. Consult a qualified tax advisor to confirm ITC eligibility.