Solar Loan vs. Lease vs. Cash: Which Is Best in 2026?
A complete comparison of the three main ways to go solar — cash purchase, solar loan, and solar lease/PPA. See which option saves you the most money.
The Three Ways to Go Solar
When you go solar, you have three main options: buy with cash, finance with a loan, or sign a lease or PPA. Each has very different financial implications over the 25-year life of your system.
| Option | Upfront Cost | Monthly Cost | Who Owns System | Tax Credit | 25-Yr Net Savings |
|---|---|---|---|---|---|
| Cash purchase | $17,500 (after ITC) | $0 | You | You | $40,000–$60,000 |
| Solar loan (10 yr) | $0 | $150–$200 | You | You | $25,000–$45,000 |
| Solar lease | $0 | $80–$150 | Installer | Installer | $5,000–$15,000 |
| PPA | $0 | Per kWh | Installer | Installer | $3,000–$12,000 |
Cash Purchase: Best Long-Term ROI
Paying cash for solar delivers the highest long-term return. You own the system outright, claim the full 30% tax credit, and pay nothing for electricity for 25+ years. The downside is the upfront cost — typically $15,000–$25,000 after the tax credit. For homeowners with the capital, cash is almost always the best financial choice.
Solar Loan: Best for Most Homeowners
Solar loans combine the financial benefits of ownership (tax credit, full savings) with $0 down. Monthly loan payments are typically offset by electricity savings, meaning many homeowners see positive cash flow from day one. The key is choosing a loan with a low dealer fee and competitive interest rate.
Lease/PPA: Lowest Risk, Lowest Reward
Leases and PPAs require no upfront cost and no maintenance responsibility. But you give up the tax credit, most of your savings, and flexibility. Leases are best for homeowners who cannot qualify for loans or have no federal tax liability to use the credit.
Frequently Asked Questions
Can I switch from a lease to ownership?
Yes — most leases include a buyout option. The buyout price varies by contract and year. After year 10, buyout prices are typically $10,000–$20,000. After year 20, they can be as low as $1,000–$5,000.
What happens to my solar loan if I sell my house?
If your solar loan is a personal loan (not tied to the property), you pay it off at closing. If it's a PACE loan (tied to the property), the buyer assumes it — which some buyers resist.
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