There have always been three ways to put solar on a roof: pay for it, borrow for it, or let someone else own it. The relative appeal of those options shifted when the residential federal credit stopped applying to systems placed in service after the end of 2025.
The Three Structures
Cash purchase. You own the system, you keep all the production value, and there is no financing cost. The tradeoff is the largest upfront outlay and full responsibility for maintenance once any workmanship coverage ends.
Loan. You own the system and pay for it over time. Solar loans are frequently marketed with a monthly payment compared against your current utility bill, which is a useful framing only if the comparison is honest about term length, fees, and what happens to the payment if a promised prepayment does not happen.
Lease or power purchase agreement. A third party owns the equipment on your roof. Under a lease you pay for the system's use, and under a power purchase agreement you pay for the power it produces, usually at a rate below the utility's. You do not own the asset and you are not claiming tax benefits on it, because the owner is.
Why the Comparison Moved
Under the old rules, a homeowner buying a system could claim a substantial federal credit, which frequently made ownership the stronger option on paper for anyone with the tax liability to use it. With the residential credit gone for 2026 projects, that advantage disappeared for owners.
Third party owned systems sit under a different part of the tax code, and the company owning the system may still be able to claim a commercial credit, subject to its own deadlines and construction timing rules. In principle, some of that benefit can be passed through to the homeowner as a lower rate or payment. Whether it actually is depends entirely on the terms you are offered, which is why the two structures should be compared on their numbers rather than on the theory.
What to Compare, Line by Line
For loans:
- The interest rate, the term, and the total interest paid over the term
- Any dealer fee built into the system price, which is often the difference between a low advertised rate and a higher cash price
- Whether the payment schedule assumes a lump sum prepayment, and what the payment becomes if you do not make it
- Whether the loan is secured against your home
For leases and power purchase agreements:
- The rate you pay and the annual escalator, which compounds over a twenty year term
- What happens at the end of the term: renewal, removal, or purchase, and at what price
- Who is responsible for maintenance, monitoring, inverter replacement, and roof penetrations
- What happens if you sell the house, including whether the buyer must qualify to assume the agreement
- Whether the system must be removed and reinstalled for roof work, and who pays
That last point is worth planning around. If your roof is within a few years of replacement, doing the roof first is usually cheaper than paying to detach and reset an array later. We covered that kind of ordering in sequencing multiple home projects in one year.
The Escalator Deserves a Second Look
A power purchase agreement that starts below your current utility rate but rises a set percentage every year may or may not stay below it, depending on how utility rates move over the same period. Ask for the schedule of payments across the full term in dollars, not percentages, and compare the total against a purchase scenario. Sales presentations tend to show year one. The term is where the decision actually lives.
Home Sale Considerations
Owned systems generally transfer with the property. Third party owned systems require the agreement to be assigned to the buyer, which adds a step to a sale and occasionally a complication if the buyer does not qualify or does not want it. Neither is a reason to avoid a lease, but both belong in the decision if you are not certain you are staying for the full term.
Getting a Fair Comparison
Ask each installer to quote the same system size under each structure they offer, and to show the twenty five year total cost of each. Then compare across companies rather than only within one company's own options. Differences in equipment, production estimates, and warranty terms make like for like harder than it looks, and the largest differences are often in assumptions rather than price.
Confirm licensing and insurance before signing anything, and read the cancellation terms. Agreements signed at your home may carry a cancellation right, a subject covered in the three day cancellation rule and in home remodel sales.
If you want to compare options for home solar, tell us about your property and we will connect you with installers who serve your area. It is free to use and there is no obligation to hire.