solar financing guide
Leasing Solar Panels
Solar leases and Power Purchase Agreements (PPAs) let you go solar without the high upfront cost of buying a system outright — the solar company owns and maintains the equipment, and you simply pay for the power it produces.
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01 — how it works
How Solar Panel Leasing Works
With a lease, the solar company owns the panels and installs them on your property — you pay a fixed monthly fee for the electricity they produce, typically for a term of 20 to 30 years.
$0 down
Most leases require no upfront payment — your first bill is usually due after installation.
Capped increases
Monthly payments can rise slightly over time, typically capped at 1%–5% a year.
Maintenance included
The solar company covers upkeep and repairs — you may only be on the hook for faulty equipment replacement in some cases.
End of lease
Renew, upgrade to a new system, or have it removed. Leases don't include the option to buy — that's what a PPA is for.
Planning to move? You can typically transfer the lease to the new homeowner, pay to relocate the system, or have it removed — worth confirming before you sign.
02 — weight it out
Pros and Cons of Leasing Solar Panels
Pros
No upfront cost to install
Low to no maintenance — the solar company handles repairs and monitoring
Predictable, fixed monthly payments make budgeting easy
Some regions allow tax incentives on lease payments
Customizable installation — you often have a say in panel type or mounting style
Can extend to power add-ons like a heating system, pool, or water heater
Cons
No ownership — you don't keep the long-term savings, tax credits, or resale value bump
Payments can end up higher than your prior utility bill, depending on the terms
No net metering — you generally can't sell excess energy back to the grid
Long-term contract (20–30 years) that can complicate a future move or home sale
03 — before you sign
A Few More Things to Check
Availability: solar leases aren't offered everywhere — they're less common in states with less solar exposure, so confirm they're available where you live.
Your Solar Sun Number: worth checking before you commit — it reflects your home's solar potential based on location and roof conditions.
04 — the alternative
How Power Purchase Agreements (PPAs) Work
With a PPA, you're not paying for the panels themselves — you're paying for the electricity they generate, priced per kilowatt-hour (kWh) and usually below your utility's current rate.
Two rate models
A Fixed Escalator Plan rises 2%–5% a year (still usually below utility hikes), or a Fixed Price Plan holds the same rate for the full term.
Zero-risk installation
The solar company installs, maintains, and assumes the performance risk — you're not on the hook for repairs.
Option to buy
Many PPAs let you purchase the system during or at the end of the agreement — often unlocking rebates and tax incentives once you own it.
Contracts typically run 10 to 25 years — and PPAs aren't available everywhere. Only about half of U.S. states permit them, so confirm eligibility in your area before signing.
05 — weight it out
Pros and Cons of a PPA
Pros
Lower electricity rates than your utility, often from day one
No upfront costs — you only pay for power you actually use
System maintenance and monitoring included
Payments flex with your actual energy use
Option to purchase the system later, with savings that can grow as utility rates rise
Cons
No ownership while under the agreement — no tax incentives or property value increase
Rates can still climb annually on an escalator plan, chipping away at savings over time
More complex terms than a straightforward lease
Long commitment (10–25 years) that can complicate a move or sale
Only available in about half of U.S. states
06 — which fits you?
Solar Lease vs. PPA
Both are forms of third-party ownership — the solar company owns the system either way. The real difference comes down to how you pay.
Cost breakdown
Expect $2.50–$3.50 per watt, covering the panels, inverter, labor, permits, and any extra equipment the install needs.
What else moves the price
Local labor costs and regulations shift pricing by region — and the 30% federal credit plus any local rebates apply on top of every figure above.
~60%
of U.S. solar homeowners chose a lease or PPA
$0
Typical upfront cost, either way
10–30 yrs
Typical contract length
Home Improvement Resources
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