Cash Purchase: Highest Long-Term Return, Highest Barrier
Paying cash for a solar system still gives you the best 25-year economics among ownership options, but the math changed in 2026: the 30% federal Residential Clean Energy Credit expired for anything placed in service after December 31, 2025, so buyers no longer capture it. On a 6 kW system at $3/watt, that's the full $18,000 installed — not the $12,600 effective cost it would have been in 2025. Most homeowners in mid-sun states now recover that in 9–13 years and still earn meaningful net savings over 25 years, just on a longer timeline than before.
Check dsireusa.org for state and utility incentives, which are unaffected by the federal change and can still meaningfully reduce your net cost.
Solar Loans: Zero Down, You Still Own the System
Solar-specific loans remain a popular financing vehicle. Without the federal credit to apply to the principal, loan amounts are now higher than they were in 2025. With a 6% solar loan over 20 years on the full $18,000 system cost, monthly payments run higher than before — often $130–150 instead of $90–100. Net 25-year savings are typically lower than cash purchase (the interest paid), but you deploy zero capital upfront.
Watch for dealer fees buried in solar loans. Many "0% APR" or "low-rate" solar loans charge the installer a 15–30% dealer fee, which installers recoup by quoting higher system prices. Always get a separate cash quote and compare.
Leases and PPAs: Savings Without Ownership
Under a lease or Power Purchase Agreement (PPA), a third party owns your system. You pay a fixed monthly fee (lease) or a per-kWh rate slightly below retail (PPA). Neither you nor the installer can claim the residential 30% credit anymore since it's expired — but some lease/PPA providers, as commercial system owners, may still access a separate commercial clean electricity credit (Section 48E), which can affect how competitively they price the lease. This has narrowed, though not eliminated, the historical gap between buying and leasing.
Leases make sense in specific cases: you can't afford or qualify for a cash purchase or loan, or you want production-performance guarantees with no maintenance responsibility. Some homeowners genuinely value the simplicity of a fixed monthly payment with the installer responsible for all repairs.
The Home Sale Complication: What Nobody Tells You
A leased system creates an obligation that must transfer to the buyer at home sale. Some buyers refuse to assume lease payments; others face credit qualification requirements set by the leasing company. This doesn't block sales, but it can slow them and narrow your buyer pool. Owned systems (cash or loan-paid-off) add documented value: studies show owned solar adds roughly $4/watt to home sale price in most markets. Leased systems add less — or are treated as a liability by cautious buyers.