Solar Lease vs. Buy in 2026: What the Records Show

Every solar sales conversation eventually reaches the same question: do you buy the system, or let a company own it on your roof? In 2026 the answer changed, because the 30% federal credit for homeowners who buy ended on December 31, 2025, while companies that own leased systems can still claim a federal credit. This guide uses public installation records to show how homeowners have actually been choosing, and how to compare the two for your own home.

The three ways to pay

• Buy with cash. You own the system from day one and keep all the savings. No federal credit for purchases made in 2026.
• Buy with a loan. You own the system; the savings go first to the loan payments. A solar loan is a contract with the lender, not the installer.
• Lease or power purchase agreement (PPA). A company owns the panels on your roof. With a lease you pay a fixed monthly amount; with a PPA you pay for each kilowatt-hour the panels produce. Both usually run 20 to 25 years.

In the records, “leased” covers both leases and PPAs: the homeowner doesn’t own the system.

Leasing fell for a decade, then came back

Share of new home solar systems that were leased or on a PPA, in the public records compiled by Lawrence Berkeley National Laboratory (Tracking the Sun):

In the early 2010s, leasing was how most people went solar: systems were expensive and leasing companies could use tax benefits homeowners couldn’t. As prices fell and solar loans became common, buying took over. That reversed in 2024. The records don’t say why, but the timing matches two changes: California’s net billing tariff, which from 2023 made a battery close to standard there and raised the price of a system, and higher interest rates, which made solar loans costlier. With the homeowner credit gone in 2026, the shift is likely to continue. Fewer 2024 and 2025 systems are in the records so far, because some utilities report late.

It depends a lot on where you live

Share of home systems leased or on a PPA, in each state’s latest three years of records:

In some states the records show almost no leases (Wisconsin, New Mexico, New Hampshire, parts of Texas). In a few of those, state rules limit third-party ownership; in others the records simply don’t report whether a system is leased, so we leave them out.

Leased systems also tend to be smaller: a median of 6.6 kW against 7.0 kW for systems homeowners bought in 2023–2025.

Even more by city

Within the same state, leasing can be the norm in one city and rare in the next. Among cities with at least 1,500 home systems in our rankings:

The records don’t say why, but the pattern is consistent with how each option works: leasing needs no upfront money and no loan approval, while buying pays off most for homeowners who can pay cash or borrow cheaply. Which companies are selling locally matters too: where a leasing company leads the market, more homes end up leased. Each city page in our rankings shows the local leasing share and the share for every top installer.

Some installers mostly lease, others mostly sell

Among the companies that installed the most home systems in 2023–2025 (full list):

That matters because a salesperson from a leasing company will usually lead with the lease, and a company that doesn’t offer leases can’t sell you one. If you want to compare fairly, get quotes from both kinds. Each company in our city rankings shows its local leasing share.

What changed in 2026

Buying no longer comes with a federal credit. The Section 25D credit, 30% of the cost for homeowners who bought, ended on December 31, 2025. A $30,000 purchase that netted $21,000 after the credit in 2025 costs the full $30,000 in 2026.

Leases and PPAs still can. The company that owns a leased system can claim the Section 48E credit, which remains available through the end of 2027 under the 2025 law. In a competitive market, some of that value shows up as a lower lease payment or PPA rate. Our 2026 solar tax credit guide explains the rules.

The result: for the same system, the gap between buying and leasing narrowed. Buying still usually wins over 25 years if you can pay cash or borrow cheaply and plan to stay in the home, but the lease is now a more reasonable option than it was.

How to compare a lease with a purchase

Put both offers on the same basis: total cost over the full term.

1. Purchase: the cash price, or the sum of all loan payments if you finance. Add an inverter replacement (often around year 12 to 15) and any maintenance you expect to pay for.
2. Lease: the first-year payment times 12, increased each year by the escalator, summed over the contract. A $150 monthly payment with a 2.9% escalator reaches about $300 by year 25 and totals roughly $65,000 over 25 years. With no escalator, the same starting payment totals $45,000.
3. PPA: the rate per kWh times the system’s expected production, with the escalator, over the term.

Then compare each against what you’d pay the utility for the same electricity. Where rates are high, as in California, New York or New England, even a lease can save money; where they are low, as in much of the South and Midwest, a lease with a steep escalator can end up costing more than the power it replaces.

A worked example

Take a typical system in Fresno, California: about 6.8 kW, with a median price of $4.09 per watt for homeowners who bought in 2023–2025, so roughly $27,600 before incentives. One kilowatt of panels there produces about 1,640 kWh a year (PVWatts), so the system makes about 11,100 kWh a year. At California’s average residential rate of about 35 cents per kWh (EIA), that power is worth up to about $3,900 a year.

• Buying for cash: you pay $27,600 once, and in the best case the savings repay it in about 7 years. After that, the savings are yours, minus an inverter replacement at some point.
• Leasing at $150 a month with no escalator: you pay $1,800 a year for power worth up to $3,900, so you save up to $2,100 a year from day one, with no upfront cost, but you never own the system.
• Leasing at $150 a month with a 2.9% escalator: by year 25 you pay about $3,600 a year, close to what the power is worth today. Whether you still save depends on how fast utility rates rise.

“Up to” matters: under California’s net billing tariff, power you export is worth far less than the retail rate, so real savings depend on how much of your solar you use at home. Ask each company for a savings estimate based on your actual usage and your utility’s current tariff.

When the leasing company goes bankrupt

A lease or PPA is a long-term contract, and the company on the other side may not last. When SunPower and Sunnova went bankrupt, their lease and PPA contracts didn’t disappear: they were sold, and servicing moved to another company, SunStrong Management. For homeowners that meant a new company to call and to pay, but the contract terms stayed the same.

After signing, keep your contract and every notice about a change of servicer. Our list of solar companies that went out of business shows how common this has become.

Questions to ask before signing a lease or PPA

• What is the escalator, and is it fixed in the contract?
• What is the total I will pay over the term?
• Who maintains and repairs the system, and who pays for removing and reinstalling panels if I replace my roof?
• What happens if I sell the house? What does the buyer need to qualify, and what is the buyout price in each year?
• What production does the company guarantee, and how is a shortfall compensated?
• Who owns the contract and who services the system if the installer is sold or closes?

The bottom line

• Buy if you can pay cash or get a low-rate loan, plan to stay at least 10 years, and live where electricity is expensive.
• Consider a lease or PPA if you can’t or don’t want to pay upfront, want the maintenance handled, or the offer passes some of the federal credit on to you. Read the escalator and transfer terms carefully.
• Whatever you choose, compare the total cost over the contract, not the monthly payment, and get at least one quote from an installer that sells and one that leases.

For what systems cost to buy in your area, see our solar cost guide and your city’s ranking, which shows the local median price and each installer’s leasing share.

Sources

• Lawrence Berkeley National Laboratory, Tracking the Sun, 2026 edition (CC BY 4.0), with NYSERDA and New Jersey’s Clean Energy Program records: home systems on existing homes, 2015–2025. Shares by Solar Power Fix.
• Congressional Research Service, IN12611, on the end of the Section 25D credit; SEIA, clean energy provisions of the 2025 tax law.