See the true 25-year cost of leasing versus owning your solar panels — including the 30% tax credit and home-value difference most sales reps skip over.
SCReviewed by Sarah Chen, Energy AnalystUpdated May 28, 2026Sources: DSIRE, NREL, IRS
Owned solar captures the 30% credit and a ~4.1% home-value increase — both forfeited under a lease or PPA. Photo: American Public Power Association / Unsplash
Quick answerOwning solar beats leasing for most homeowners. A $21,000 system costs about $14,700 net to buy after the 30% credit, while a $105/month lease escalating 2.9% a year can exceed $45,000 over 25 years — plus owners capture a ~$15,000 home-value increase that leasers forfeit.
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Compare lease vs buy
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Most leases raise your payment 2.5–3.5% every year.
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Zillow: owned solar adds ~4.1% to home value; leases add little.
Owning saves you
$47k
over 25 years vs leasing
Buy (net)
$14,700
Lease (25 yr)
$45,000
+ Home value
$15,000
Buy (net) applies the 30% federal credit. Leasing forfeits the credit and most of the home-value gain. Savings = lease total + home-value gap − net buy cost.
How this calculator works
1
Enter the cash price
What the system costs to buy outright.
2
Enter the lease payment
Starting monthly lease/PPA payment and its annual escalator.
3
Add the home-value gain
Owned solar adds ~4.1% to home value; leases add little.
4
See the 25-year gap
We total both paths and show how much owning saves.
Lease vs buy: the honest comparison
A solar lease (or PPA) sounds great in the sales pitch: $0 down, instant savings, someone else maintains the panels. The catch shows up over 25 years. Because the leasing company keeps the 30% federal tax credit, keeps any state incentives, and charges you an escalating monthly payment, the lifetime cost of leasing is usually far higher than owning — often $30,000–$50,000 versus a $14,000–$15,000 net purchase.
Ownership also captures the home-value increase. Zillow research found homes with owned solar sell for about 4.1% more, while leased systems add little and can actually slow a sale because buyers must qualify to assume the lease.
When does a lease make sense?
You have no federal tax liability to absorb the 30% credit and can't carry it forward usefully.
You can't or don't want to finance a purchase, even at a low rate.
You value zero maintenance responsibility over lifetime savings.
For nearly everyone else, owning — with cash or a solar loan — wins clearly. Run the full four-way comparison in the Financing Calculator.
Questions
Frequently asked questions
Is it better to lease or buy solar panels?
For most homeowners, buying is far better. Owning lets you claim the 30% federal tax credit, capture the ~4.1% home-value increase, and avoid an escalating monthly payment. Over 25 years, owning typically costs $14,000–$15,000 net while leasing can exceed $40,000. Leasing only makes sense if you have no tax liability and can't finance a purchase.
Why do solar leases cost more over time?
Three reasons: the leasing company keeps your 30% federal tax credit, they keep state incentives, and your payment escalates 2.5–3.5% every year for 20–25 years. Those escalating payments compound into a much larger lifetime cost than a one-time purchase.
Does a leased solar system hurt home resale?
It can. A buyer must qualify to assume the remaining lease, which narrows your pool of buyers and can delay closing. Owned solar does the opposite — it transfers cleanly and adds measurable resale value, so it's reflected in a higher sale price.
Can I buy out my solar lease later?
Usually yes, but the buyout price is set by the leasing company and is often higher than the system's depreciated value. Read your contract's buyout schedule before signing. Many homeowners who lease later regret not financing a purchase instead.
Do I get the tax credit with a lease?
No. With a lease or PPA the third-party owner claims the 30% Residential Clean Energy Credit, not you. That forfeited credit — worth around $6,000 on a typical system — is a major reason leasing costs more overall.
Sarah has spent 12 years modeling US residential solar economics, including 4 years contributing to NREL's Distributed Generation Market Demand model. She holds a BS in Mechanical Engineering from UC Berkeley and reviews every calculator and state guide on GreenCalcs against current IRS, DSIRE and EIA data. Read our methodology →
