Leasing vs. buying solar panels: What’s best for you?
Last edited
Author
Andrew Blok
Electrification and Solar Writer and Editor
Editor
Ryan Barnett
SVP, Policy & New Market Development
Electricity prices keep climbing, and you're wondering whether solar could take some of the sting out of your bill. Buying and leasing may both be within reach, so the real question is which one fits you.
Both buying and leasing home solar panels can lower your electricity bill, and the better choice usually comes down to three things: how much cash you want to put in up front, how long you plan to stay in the home, and whether you want to own and maintain the system yourself. Buying tends to suit homeowners who can pay cash or finance and want to own the equipment. Leasing tends to suit homeowners who want solar for nothing up front, a predictable payment, and no maintenance to manage.
How do buying and leasing solar panels compare?
Buying means you own the system and take on its costs, while leasing means a company owns it and you pay monthly to use it. Here is how that plays out.
| Buy | Lease | |
|---|---|---|
| Who owns the system | You | The leasing company |
| Upfront cost | Cash, or a loan down payment | Can be zero |
| Monthly payment | None if you pay cash, loan payments if you finance | Fixed monthly lease payment |
| Maintenance | Your responsibility | Typically the leasing company's; confirm in the contract |
| Federal tax credit | None currently available | Goes to the system's owner, with any benefit to you indirect |
| Selling your home | Fewer steps | Extra steps, since you must buy it out or transfer your home’s buyer |
| Contract length | None if paid in cash, the loan term if financed | Often up to 25 years |
What do you get when you buy solar panels?
Buying gives you ownership of your solar panels and, once the system is paid off, any further savings are yours to keep. The tradeoff is a higher upfront cost and responsibility for repairs.
Buyers usually think about payback period, which is how long it takes for your savings to cover what you paid. Palmetto's estimates from real installations in the second half of 2025 shows payback periods ranging from about six years in California to about 17 years in Oklahoma. Your own number will vary with your utility rates, your electricity usage, and your system cost.
Owning also means fewer steps when you sell, because there is no lease to transfer. On the downside, you pay for any repairs, and adding panels to your home may change your insurance coverage. Ask your insurer before you commit.
Read more: Selling a house with solar panels
As for taxes, the federal credit that homeowners could claim for buying solar has ended for systems placed in service after December 31, 2025. Some state incentives may still go only to system owners. Always confirm your eligibility for yourself.
Pros and cons of buying
| Pros of Buying | Cons of Buying |
|---|---|
| You own the system and keep all further savings once paid off | Higher upfront cost (cash or loan down payment) |
| Fewer steps when selling your home (no lease to transfer) | You are responsible for paying for any repairs or maintenance |
| May qualify for state-level incentives reserved for system owners | Federal tax credit has ended for systems placed in service after Dec 31, 2025 |
| No monthly payments once any loan is paid off | Adding panels may increase home insurance coverage and premiums |
What do you get when you lease solar panels?
Leasing gets solar on your roof without a large upfront payment, and the company that owns the system handles upkeep. You give up ownership and take on a long contract.
Palmetto's version is the Palmetto Energy Plan, our solar lease. It has zero money down, no processing fees, and predictable monthly payments over a 25-year contract. Maintenance is included. When you get Palmetto Energy Plan directly from us, it’s designed so homeowners can see savings starting in year one, though your actual savings depend on your electricity use, your utility's rates, and your home.
When the 25 years end, you have four options:
- Walk away.
- Extend the lease at a reduced rate.
- Buy out the system.
- Start a new lease with a new system.
Read more: What happens at the end of a solar lease
A lease has its own tradeoffs. You will usually still get a utility bill, plus a lease payment on top of it. The system belongs to the leasing company, so you generally don't capture the value of owning it, and selling your home means a buyer has to take over the lease or you pay to end it.
Read more: Solar leasing guide
In some areas power purchase agreements, or PPAs, may be on offer. They work like leases, but you pay per kilowatt-hour (a unit of electricity) the panels produce instead of a fixed monthly amount (though some PPAs are structured like leases).
Read more: Solar leases vs. PPAs
| Pros of Leasing | Cons of Leasing |
|---|---|
| Zero or low upfront cost | You do not own the system |
| Predictable monthly payments and potential first-year savings | Requires a long-term contract (often up to 25 years with earlier buy out options) |
| System maintenance and upkeep are typically handled by the leasing company | Extra steps when selling your home (lease transfer or buyout required) |
| Multiple end-of-lease options (buyout, extend, remove, or upgrade) |
Which questions should you answer before you decide?
Five questions settle this for most homeowners.
- How long will you stay? Buying pays off over many years. If a move might come sooner, a purchase or a lease will both add steps to your sale, so find out what they are.
- Can you pay or finance comfortably? Buying costs more upfront. If it would strain your budget, a lease may fit better.
- Do you want to own the system? If you want full control, you have to buy. If you'd rather not deal with repairs, leasing removes that.
- How do the lifetime numbers compare? Ask for the total you would pay under each option over the full term, next to your current utility spend.
- What does the contract say? Ask about maintenance coverage, what happens if you sell your home, and what your options are at the end. Our list of 20 questions to ask your solar installer is a good starting point.
If you want to see how this plays out for your home, you can learn more about Palmetto's solar offerings or get a free solar estimate.
See how much you can save by going solar with Palmetto
Frequently asked questions
Do you really save money with solar panels?
Many homeowners can, whether they buy or lease. How much depends on how much electricity you use, how well your home suits solar, and how your utility's rates change over time.
Can you rent solar panels?
A solar lease is the closest thing. You pay a monthly amount to use panels that someone else owns.
How much does it cost to buy solar panels?
Palmetto's analysis of real 2025 installation data put the average cost at $2.36 to $3.24 per watt, depending on the area. A watt is a measure of system size, so a bigger system costs more. As a hypothetical example, not a Palmetto result, a 6,000-watt system at that range would cost roughly $14,160 to $19,440 before any state or local incentives. Our solar panel cost guide breaks down what moves the number.
Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
