buy or lease solar panels

Purchasing solar panels: tips for buying or leasing

Whether you buy a system or lease it, going solar is one of the best ways you as a homeowner can save on energy bills and use renewable energy to power your home. That said, the financing option you choose influences a number of factors, including  the costs, maintenance responsibilities, terms, savings, and the return on investment (ROI) of your solar panel system. Going solar can be an expensive proposition, with the average solar panel installation upfront cost ranging from $17,538 to $23,458 so financing may be the best option for you instead of paying in cash.

The main distinction between buying and leasing a solar photovoltaic system comes down to ownership: if you buy a solar panel system, you own it, either outright (if purchasing with cash) or after repaying your solar loan. On the other hand, if you lease the system or sign a power purchase agreement (PPA), a third party owns the equipment on your roof.

So, which is the right option for you? Unsurprisingly, it depends on your financial goals and preferences! Let’s break down the main differences between the two options.

A quick note about third-party ownership options

Interested in a solar lease or PPA? Keep in mind that not all companies offer these types of financing solutions–and in some cases, they can’t provide those options even if they want to. Solar leases and PPAs are not legally permitted in some areas of the country. Confirm that your chosen provider offers the financing option that you want most!

Key takeaways

  • Before you buy or lease solar panels, it’s important to make sure your property is a good fit for solar and that you have reviewed all available incentives.
  • Buying solar panels is the best option if you are eligible for many different incentives or if you plan on using solar panels as an asset.
  • Leasing solar panels are the best option if you don’t have the available cash upfront or don’t want to do the maintenance yourself.
  • By using the EnergySage Marketplace, you can receive quotes from multiple installers and work with Energy Advisors who will help you with the purchasing process.

What’s in this article?

Steps for buying solar panels

  1. Determine if you’re a good fit for solar

Before doing anything else, you should ensure that your home can accommodate solar panels. This involves doing research into the financial benefits of going solar, examining your property itself to see if it can fit solar panels, and looking into local taxes and incentives.

  1. Gather and compare quotes for solar

Using the EnergySage Marketplace, all you need to do is submit your zip code and some basic information, and you can receive multiple quotes from verified and qualified installers in your area.

  1. Choose an installer

After you have reviewed your options, it is time to choose an installer. Once you find an installer that meets your budget and price range, you can move forward with your solar installation.

  1. Decide how to pay for your installation

There are many different options on how to pay for your installation such as leases or buying the system outright. In the article below, we will explore more of what each option means and the steps you should consider before deciding on how to pay.

  1. Install your system

Once you have paid for the system, the time has come to install your solar panels and reap the benefits.

Purchasing a solar system

Purchasing a residential solar panel system with cash or financing with a solar loan is your best option if you…

  • Want to maximize the financial benefits of installing a solar panel system;
  • Want to bundle different solar options (including solar cells, inverters, battery storage, and panels)
  • Can take advantage of federal and state tax credits (i.e. have sufficient tax liability including the federal tax credit);
  • Plan to install on a business, and can realize tax benefits by treating the solar panel system as a depreciable asset
  • Want to increase the market value of your home by installing a rooftop solar panel system.

Types of solar panels

Whether you are buying or leasing solar panels, it is essential to know what kind of panels to buy. There are three types of solar panels primarily available today: monocrystalline, polycrystalline and thin-film. These solar panels vary in appearance, performance, costs, and how they’re made. Monocrystalline solar panels are high-efficiency. Polycrystalline solar panels can be the most cost-effective.

Leasing a solar panel system

A solar lease/PPA is your best option if you…

  • Want to avoid any responsibility for maintenance or repairs for a solar panel system; 
  • Are ineligible for federal or state solar tax credits; and/or
  • Want to go solar, but prefer not to take out a loan or outlay cash to do so.

Compare and contrast: buying and leasing solar

Between the two options, there are practical differences in cost, maintenance, terms, and overall savings.

Solar panel Installation cost

You can both own and lease with $0-money down. If you lease your system, you won’t be eligible for tax credits and other incentives.

Solar loan/cash purchase

  • You own the system and are responsible for maintaining it. Note that solar equipment is durable and carries warranties including power output and product warranties.Solar lease/PPA
  • Solar leases and PPAs are generally for either 20 or 25 years, at which point you can renew your agreement or purchase the system outright for at market value price. Payments can range from $50-$250 per month.
  • If you finance with a loan, you can often get a solar panel system for little to no money down.

Solar lease/PPA

  • You can get a solar energy system for little or no money down.
  • You don’t qualify for tax credits, rebates, or incentives – those belong to the third party owner of the system.
  • What you pay the third-party owner over the duration of your lease/PPA will likely be more than the cost of buying the equipment outright


Solar panel systems require minimal maintenance, but when maintenance is required, it is the responsibility of the system owner – either you (with a cash purchase/loan) or the third-party owner (with a lease/PPA).

Solar loan/cash purchase

  • You own the system and are responsible for maintaining it. Note that solar equipment is durable and carries warranties including power output and product warranties.

Solar lease/PPA

  • Solar leases and PPAs are generally for either 20 or 25 years, at which point you can renew your agreement or purchase the system outright for at market value price. Payments can range from $50-$250 per month.

Best solar panel brands

What manufacturer to buy your solar panels from is also another important consideration no matter how you eventually purchase them. According to our article, Panasonic, REC, and Sunpower are widely considered to be some of the top solar panel companies. Canadian Solar is another top manufacturer.

Financing terms

You can find solar loan options with terms as short as five years, and as long as 20 years. Leases and PPAs typically last a minimum of 20 years.

Solar loan

  • Typical solar loan terms range from 5 – 20 years. Once you finish paying off your loan, you own the solar panel system outright.
  • Interest rates typically range from 3 percent to 8 percent, depending upon a number of factors including your FICO credit score and term length.

Solar lease/PPA

  • Solar leases and PPAs are generally for either 20 or 25 years, at which point you can renew your agreement or purchase the system outright for at market value price.


People who own their solar panel systems typically save more money on their electricity bill, and overall, than those who finance with a solar lease/PPA.

Solar loan/cash purchase

  • By owning a solar panel system, you can save between 40 and 70 percent on electricity costs over the lifetime of your solar panel system. Whether you fall on the higher or lower end of that scale depends on your location and the incentives in your state.
  • After making back the cost of your solar panel system, you receive free electricity from your solar energy system throughout its life span (25+ years). Every bit of electricity you generate from your system helps decrease what you owe your utility company.

Solar lease/PPA

  • Solar leases can help you save between 10 and 30 percent off your utility’s electricity prices, depending on your property and the incentives available to the third-party owner of the system.
  • The solar electricity you generate isn’t “free” – you will pay the third-party owner of the system for these benefits throughout the duration of your lease/PPA.

Financing solar storage

It is important also to consider different types of solar systems when you are looking for what is best for your needs. This especially includes solar battery storage. In addition to preventing power outages, solar storage will help you save energy and can be bundled in solar panel kits with items like charge controllers.

Leasing or buying DIY solar panels

There are many product options available for those looking to install solar panels themselves or have an off-grid system. While this may seem like a strong option to reap the same benefits of home solar panels as those who use professionals, it has many drawbacks associated. Using a professional installer means that each installer is licensed and qualified. They will have a strong understanding of local financial incentives as well, giving you peace of mind that not only will you be saving the most money possible when going solar, and you will also be ensuring that your solar system is efficient and actually effective. 

Start your solar journey today with EnergySage

The EnergySage Marketplace is the nation’s leading online solar marketplace: when you sign up for a free account, we connect you with solar companies in your area, who compete for your business with custom solar quotes tailored to fit your needs. Over 10 million people come to EnergySage each year to learn about, shop for and invest in solar. Sign up today to see how much solar can save you.