Solar Financing: Cash, Loan, Lease & PPA (2026)
Last updated: February 1, 2026
Solar financing options compared. Cash purchase vs solar loans vs leases vs power purchase agreements. Find the best way to pay for solar.
There are four main ways to pay for solar: cash purchase, solar loan, lease, and power purchase agreement (PPA). Cash delivers the highest total savings and fastest ROI. Solar loans offer no upfront cost with positive monthly cash flow. Leases and PPAs require no upfront cost or maintenance responsibility but deliver smaller savings and no ownership benefits.
Key Takeaways
- • Cash: highest ROI (10-20%), you own the system and claim tax credits
- • Solar loan: no upfront cost, you own the system, typical 4-7% APR for 10-25 years
- • Lease: no upfront cost, fixed monthly payment, leasing company owns the system
- • PPA: no upfront cost, you buy the solar electricity at a fixed rate (typically $0.08-$0.15/kWh)
- • Only cash and loan purchases qualify for the 30% federal tax credit
- • Leases and PPAs can complicate home sales
Frequently Asked Questions
Which financing option is best?
Cash purchase delivers the best long-term returns (150-300% ROI over 25 years). If you don't have cash, a solar loan is the next best option — you still own the system, claim the tax credit, and typically pay less per month than your previous electricity bill. Leases and PPAs are best for homeowners who can't qualify for loans or don't want maintenance responsibility.
Can I sell my house with a solar lease?
Yes, but it adds complexity. The lease transfers to the new homeowner, who must qualify with the leasing company. Some buyers view leases negatively. With owned systems (cash or loan), solar increases home value by ~4% with no transfer complications.
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Last updated: February 2026