The four options at a glance
| Option | Upfront | You own it? | 2026 federal credit | Lifetime savings |
|---|---|---|---|---|
| Cash purchase | Full cost | Yes | $0 (expired) | Highest |
| Solar loan | $0–low | Yes (once repaid) | $0 (expired) | High (minus interest) |
| Lease | $0 | No | Claimed by owner (installer) | Low–moderate |
| PPA | $0 | No | Claimed by owner (installer) | Low–moderate |
Cash purchase — most savings, biggest cheque
You pay the full cost (a national average around $2.85/watt, so roughly $17k–$25k for a typical home), own the system outright, and keep every dollar of electricity it offsets for 25+ years. The catch in 2026: there's no 30% federal credit anymore for purchases (it expired at the end of 2025), so your payback period is longer than buyers enjoyed in prior years. Still usually the best lifetime value if you can float the upfront cost and won't move soon.
Solar loan — own it without the upfront hit
A loan lets you own the system with little or nothing down, but interest eats into your savings, so the effective payback stretches out. It makes the most sense where your electricity rate is high (so savings are large) and the loan rate is low. Like a cash purchase, you get $0 federal credit in 2026 — the loan just spreads the now-uncredited cost over time.
Lease — $0 down, someone else owns the panels
With a lease you pay a fixed monthly fee to use panels the solar company owns. Because they own the system, they can claim the business clean-energy credit (Section 48/48E) that homeowners lost — and competitive installers pass some of that value back as a lower payment. You get immediate, modest savings and zero maintenance responsibility, but you don't own the asset and capture far less of its lifetime value.
PPA — pay per kWh, not a fixed fee
A Power Purchase Agreement is like a lease, except instead of a flat monthly fee you pay for the electricity the panels actually produce, at an agreed per-kWh rate that's usually below your utility's — often with a small annual escalator. Same ownership picture as a lease (the installer owns it and claims the credit), same trade-off: easy savings now, less value long-term.
So which should you choose in 2026?
- Buy (cash) if you can afford the upfront cost, will stay in the home, and your state's payback is reasonable — see payback by state.
- Loan if you want ownership without the lump sum and your rate/sun make the savings outrun the interest.
- Lease or PPA if you want $0 down and no hassle, or if buying's payback is simply too long where you live — the business-side credit keeps these viable in 2026.
The honest rule of thumb: ownership wins on lifetime dollars; lease/PPA wins on convenience and zero upfront cost. Whichever you lean toward, model the purchase math first so you know what you're giving up.
Calculate your solar payback by option →
FAQ
Is it better to buy or lease solar panels in 2026?
Cash buying gives the most lifetime savings (you own everything it produces), but with no federal credit for buyers in 2026 the payback is longer. Lease/PPA means $0 down and the installer claims a business credit — easier, but smaller long-term savings. Buy if you can and will stay; lease/PPA for convenience or where buying's payback is too long.
Do solar leases still get the tax credit in 2026?
Not you directly — but the company that owns the leased panels can claim the business clean-energy credit (Section 48/48E) and may pass some value to you via a lower payment. That's why $0-down offers still work in 2026 even though purchases lost the credit.
Can I buy out a solar lease later?
Many leases/PPAs include a buyout option after a set number of years. Read the contract: buyout pricing, escalator rates, and transfer terms (important if you sell your home) vary widely between providers.