How a solar lease works
With a lease, the installer owns the system and you pay a fixed monthly amount for the power it produces, often with $0 upfront. Maintenance is typically covered by the provider. A prepaid lease lets you pay the full lease amount upfront in exchange for a lower total cost.
The trade-off: because you do not own the system, you generally cannot claim the federal tax credit or the SREC-II payments yourself, and long-term savings are lower than ownership. Leases can also affect a home sale, since the lease transfers to the buyer or must be bought out.
How a solar loan works
A loan lets you own the system while spreading the cost over time, often with $0 down. As the owner, you can claim the 30% federal tax credit (if eligible) and any SREC-II payments, and the system can add value to your home. Once the loan is paid off, the electricity your system produces is effectively free.
The trade-off: you are responsible for maintenance (most modern systems need little), and your monthly savings depend on your loan terms and production. Over the long run, ownership usually saves more than leasing.
Side by side
Lease: lowest upfront, predictable monthly, little maintenance responsibility, lower lifetime savings, no ownership incentives. Loan: little or no upfront, you own the system, you keep incentives and SRECs, higher lifetime savings, you handle maintenance. Cash purchase sits at the far end of ownership: highest upfront, highest lifetime savings, no monthly payments.
Which should you choose?
If your priority is the lowest upfront and the simplest experience, a lease may suit you. If you want the highest long-term savings and are comfortable owning the system, a loan or cash purchase usually wins. The right answer depends on your tax situation, how long you plan to stay in the home, and your goals, not a one-size-fits-all pitch.
Frequently asked questions
Do I get the tax credit with a solar lease?
No. The tax credit and SRECs generally go to the system owner. With a lease, the installer owns the system and claims those incentives, which is why lease payments are lower.
Is a solar loan hard to qualify for?
Qualification varies by lender and credit. Many homeowners qualify for $0-down options. We help you understand your options before you decide.
Which saves more over 20 years?
Ownership (loan or cash) typically saves more over the long run because you keep the incentives and eventually own the power outright. Leases offer lower lifetime savings but lower upfront risk.
Want a number for your home?
Guides are general. Your estimate is specific. Request a free estimate and we will use your roof, your usage, and real products to give you honest numbers.