Buying vs Leasing Solar Panels

The decision on how to finance your solar panel system depends on your particular financial goals. The main practical distinction between buying and leasing a solar panel system is in ownership. If you buy a solar panel system, you own the system, either outright (if purchasing with cash) or after repaying your solar loan. If you lease the system or sign a power purchase agreement (PPA), a third party owns the solar panel system. This distinction impacts the cost, maintenance, terms, financial offsets, and savings/returns on investment of your solar panel system.


Buying solar panels is a great option if you're looking to:

 1. Be the owner of your solar panel system

 2. Maximize the financial benefits of solar

If you buy solar panels outright, you'll see more savings in the long run. That's because you won't pay monthly payments for years to your solar provider and, instead, will own the system from the beginning. That means you’ll achieve more overall savings sooner than you would by leasing your solar panel system. You'll reduce or eliminate your electric bill by using the power your solar panels produce.

Keep in mind that you can also finance your solar panels through a solar loan. A solar loan will still give you the home equity and tax incentive benefits that come with owning solar panels, without the large upfront cost of outright solar panel system ownership.

Another way to maximize the financial benefits of solar is to claim the 26% federal investment tax credit (ITC). Of course, you must be able to claim this tax credit, which depends on your tax liability. This can significantly reduce your cost for solar panels.

You also may be eligible for state or local incentives such as SREC credits which, depending on the state you live in, could pay you back for as much 50% of your system cost!

purchase solar panels

solar panels lease

The appeal of leasing is that you receive a new solar installation without the responsibility of a loan. Instead, a third-party lessor finances the entire project on your behalf – parts and labor included. This lessor also handles all maintenance and monitoring for you – again – 100% free of charge. In exchange, you agree to pay for the clean solar electricity that your “leased” panels generate. These monthly payments are less than what your utility company charges for its grid electricity. So you begin saving money on your energy bills starting day one. Moreover, you also receive all the environmental benefits that come with solar power. So even though you’re technically renting your installation, you end up with a much smaller carbon footprint.

Most solar leasing agreements last 25 years. Once the contract is up, you’ll own the system and keep the power they continue to produce for the remaining lifetime of the system.


Whether you buy or lease solar panels, you’re making a positive impact on the world and your wallet. If you have the financial ability to buy your solar panels outright, or secure financing for a solar loan, the payoff will be much greater than a solar lease. Buying allows you to take advantage of all applicable solar panel incentives, be the owner (and potential seller) of all the energy you produce, and achieve much greater savings in the long-run.

Not Sure Which Solar Financial Option is Right for You?

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