Solar lease vs buy calculator
Since January 1, 2026, homeowners who buy solar get no federal tax credit, while the company behind a lease or PPA can still claim one. That makes leasing worth a real comparison for the first time. Enter your quote and see what each option leaves you with over the same number of years.
Fills in your electricity rate and solar production. You can still edit both.
From your quote. A typical US home system is 6-10 kW.
100% with full net metering. Lower where exports earn less (for example California's net billing).
0.5% per year is a common warranty assumption.
Buy: cash price
Buy: loan
Lease or PPA
Comparison
- Best over 25 years
- Cash
- Year-1 value of solar power
- $1,764
Estimates only. No federal tax credit is applied to buying. Your quote, contract and local net-metering rules decide the real outcome.
| Cash | Loan | Lease | |
|---|---|---|---|
| Paid up front | $24,500 | $0 | $0 |
| Total paid | $24,500 | $56,843 | $41,494 |
| Bill savings | $56,411 | $56,411 | $42,807 |
| Net gain | $31,911 | −$431 | $1,313 |
| Break-even year | 13 | Not reached | 1 |
| Year-1 monthly cash flow | $147/month | −$90/month | $17/month |
Owned system keeps producing after the comparison period; a lease system is assumed removed when the lease ends.
Defaults and sources
- Federal credit for buying solar or a battery (25D)
- None for systems installed after December 31, 2025IRS FAQs on Public Law 119-21 · checked Oct 27, 2026
- Leased or PPA systems (48E, claimed by the provider)
- Provider may claim it; for most new solar leases the system must be in service by December 31, 202726 U.S.C. §48E(e)(4) and §48E(i) · checked Oct 27, 2026
- Residential electricity price
- State average when you pick a state; US average 18.19 cents/kWhEIA Electric Power Monthly, Table 5.6.B (year-to-date through August 2026, preliminary) · checked Oct 27, 2026
- Solar production per kW
- Modelled for one major city per state when you pick a statePVWatts v8 (National Laboratory of the Rockies, formerly NREL): fixed roof mount, 20 degree tilt, south-facing, 14% system losses, NSRDB typical-year weather (2020; 2023 for Alaska) · checked Oct 27, 2026
- Median installed price, cash-purchase home solar
- $3.5 per watt (2024 installs, before incentives)Berkeley Lab, U.S. Distributed Solar and Storage 2025 Data Update · checked Oct 27, 2026
- Installed price range, all host-owned home solar
- $3.0/W (20th percentile) to $5.2/W (80th percentile); loan-financed median $4.7/WBerkeley Lab, U.S. Distributed Solar and Storage 2025 Data Update · checked Oct 27, 2026
- Solar loan dealer fees
- Typically 10-30% of the cash price, sometimes more than 50%CFPB, Issue Spotlight: Solar Financing (August 2024) · checked Oct 27, 2026
- Lease and PPA terms
- Leases typically 15-20 years; PPA escalators 1-5% per year; solar loans 8-25 yearsCFPB, Issue Spotlight: Solar Financing (August 2024) · checked Oct 27, 2026
How the comparison works
Each year, the system's output is your size times your state's production per kW, reduced by the panel output loss. That output is valued at your electricity rate, raised each year by the price increase you set, and multiplied by the bill-credit percentage.
Cash pays the full installed price in year 1. The loan adds the dealer fee to the cash price, then pays it off over the term at your APR. The lease pays your year-1 payment, raised each year by the escalator, and stops saving when the lease term ends.
Net gain is total bill savings minus total paid within the years you compare. Break-even is the first year your cumulative savings cover what you have paid.
Lease vs buy: common questions
Is there still a federal tax credit for buying solar in 2026?
No. The IRS says the 25D residential clean energy credit is not allowed for expenditures made after December 31, 2025, and an expenditure counts as made when installation is completed. A system installed in 2026 gets no federal credit even if you paid in 2025.
Why can a solar lease still get a tax credit?
With a lease or PPA, the solar company owns the system and can claim the commercial clean electricity credit under section 48E. You do not receive it directly; it only helps you if the company passes it through as a lower payment. For most new solar leases, the system must be in service by December 31, 2027.
What is a solar loan dealer fee?
It is a markup the lender charges the installer, which is built into your loan amount. The CFPB found these fees typically run 10-30% of the cash price and can exceed 50%. Berkeley Lab's data shows loan-financed systems had a median price of $4.7 per watt in 2024, against $3.5 for cash purchases.
What is a lease escalator?
A fixed yearly increase in your lease or PPA payment. The CFPB reports PPA escalators of 1-5% per year. With a 2.9% escalator, the year-20 payment is about 72% higher than the year-1 payment, so compare it with how fast you expect electricity prices to rise.
Is buying or leasing better in 2026?
Paying cash usually leaves the most money over 20-25 years if you stay in the home. A loan with a large dealer fee can fall behind a fair lease. A lease costs nothing up front but stops saving when it ends and can complicate selling the house. Run your own quote through the calculator above.
What happens when I sell a house with leased solar?
The buyer usually has to qualify for and take over the lease, or you buy it out. Check the transfer and buyout terms in the contract before signing.