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Solar PPA vs solar lease vs solar loan — true cost

Solar + renewables

PPA = pay-per-kWh. Lease = fixed monthly. Loan = own + ITC. The 25-year ownership math by financing path, with the right call by household income.

Featured infographic

25-year cash-flow: PPA vs lease vs loan vs cash

Cash purchase wins on 25-year savings. Loan close behind with same ITC. Lease and PPA lowest savings but lowest upfront barrier.

Open graph image · /og/savings-stack.png

Solar PPA (Power Purchase Agreement) charges a per-kWh rate for the energy your roof generates. No upfront cost; you do not own the panels. Solar lease is a fixed monthly payment for use of the panels. Solar loan finances the system purchase. You own the panels and claim the 30 percent ITC. Highest 25-year savings but requires upfront credit qualification.

Who owns the panels matters

With a PPA or lease, the installer owns the panels. You pay for the energy or the use of the equipment. The 30 percent ITC goes to the installer, who passes some of the benefit through pricing.

With a loan or cash, you own the panels. You claim the ITC on your tax return. You own the asset and any future value.

What happens if you move

PPA: assign or transfer to the new homeowner. Cancellation often requires payoff of remaining contract value.

Lease: similar, transfer or payoff. The fixed monthly payment continues regardless of who occupies the home.

Loan: pay off remaining loan at sale or transfer to buyer. You own the system and capture its appraised value in the home sale.

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Common questions

Quick answers from the editorial desk

Who owns the panels on a PPA?
The PPA provider (typically a third party). You pay them for the energy generated. They handle maintenance.
Can I move with a solar PPA?
Yes via transfer to the new owner or payoff. Most PPA contracts allow transfer with credit approval of the new buyer.
Can I refinance a solar loan?
Yes. Many homeowners refinance solar loans when interest rates drop. The 30 percent ITC is claimed at first purchase.
What is an escalator clause?
Many leases and PPAs include a 1 to 3 percent annual price escalation. Confirm the clause before signing; it materially affects 25-year cost.

Further reading

Pillar guide, cluster siblings, and state pages cited above

Sources

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