WATTROI

Leasing vs Buying Solar – Complete Comparison 2025

Detailed comparison of leasing vs buying solar panels: costs, benefits, ownership, and which option saves you more money

Key Differences

Buying Solar

  • ✓ You own the system
  • ✓ Claim 30% federal tax credit
  • ✓ Higher upfront cost
  • ✓ Better long-term ROI
  • ✓ Full control over system
  • ✓ Can sell with home

Leasing Solar

  • ✗ Third party owns system
  • ✗ No tax credit for you
  • ✓ Low or zero upfront cost
  • ✗ Lower long-term savings
  • ✗ Limited control
  • ✗ May complicate home sale

Cost Comparison

Over 25 years, buying typically saves $5,000-$15,000 more than leasing, even after accounting for the upfront investment.

Example: $1,500 system purchased = $1,050 after tax credit. Over 25 years, saves ~$8,000 in electricity costs. Leasing the same system costs ~$3,000 in lease payments over 25 years, saving only ~$5,000.

When to Buy

  • You can claim the federal tax credit
  • You have cash or can get a low-interest loan
  • You plan to stay in your home long-term
  • You want maximum ROI and savings
  • You want full control over your system

When to Lease

  • You can't claim tax credits (low tax liability)
  • You don't have upfront capital
  • You're renting or may move soon
  • You want zero maintenance responsibility
  • You prefer predictable monthly payments

💡 Recommendation

For most homeowners, buying is the better financial choice if you can afford the upfront cost and claim the tax credit. Use our calculator to compare your specific situation.

Frequently Asked Questions

Q: Is buying or leasing solar better?

A: Buying typically saves $5,000-$15,000 more over 25 years, even after the upfront investment. Leasing is better only if you can't claim tax credits or need zero upfront cost.

Q: Can I buy out a solar lease?

A: Most leases allow buyout, but the cost is usually high (often close to buying new). Check your lease terms for buyout options and costs.

Q: Do I own the panels with a lease?

A: No, the leasing company owns the system. You're essentially renting the equipment and the electricity it produces.

Q: What happens if I move with a leased system?

A: The lease typically transfers to the new homeowner, who must qualify. If they don't qualify, you may need to buy out the lease or negotiate with the leasing company.

Q: Can I claim tax credits with a lease?

A: No, the leasing company claims the tax credit since they own the system. This is one reason buying usually provides better long-term value.

Q: How long are solar leases?

A: Most leases are 20-25 years, similar to the system's expected lifespan. You're committed for the full term unless you buy out or transfer the lease.

Q: What if the leased system breaks down?

A: The leasing company is responsible for maintenance and repairs, which is a benefit of leasing. However, response times and service quality vary by provider.

Q: Can I upgrade a leased system?

A: Usually not, since you don't own the equipment. Upgrades typically require buying out the lease first. With ownership, you can upgrade or expand anytime.

Q: Which option increases home value more?

A: Owned systems typically add $3-$4 per watt to home value. Leased systems may not add value and can complicate sales, as buyers must take over the lease.

Q: Should I buy if I'm planning to move soon?

A: If moving within 5-7 years, buying may not pay off before you move. However, owned systems can increase home value. Leasing might be better for short-term situations, but consider the long-term costs.