You’ve seen the ads. Maybe a guy in a polo shirt knocked on your door while you were trying to cook dinner, promising a "zero-down" way to stick it to the utility company. It sounds like a dream. Free panels, lower bills, and you get to feel good about the planet. But is leasing solar panels worth it for the average homeowner, or is it just a clever way for multi-billion dollar finance companies to rent out your roof?
Honestly, it’s complicated.
Solar leases and Power Purchase Agreements (PPAs) have dominated the residential market for over a decade. Companies like Sunrun and Vivint built empires on this model. They make it easy. You don't pay $20,000 upfront. You don't worry about maintenance. You just sign a 20-year contract and watch your monthly payment drop. Or so they say. The reality is often a tangled mess of escalating payments, property lien concerns, and lost tax credits that can make a lease feel more like a weight around your neck than a ticket to energy independence.
The basic math of the solar lease
Let's talk about how this actually works. When you lease, you don't own the hardware. The leasing company—the "provider"—buys the panels, hires the installers, and maintains the system. In exchange, you pay them a fixed monthly rent. A PPA is slightly different; you pay for the actual kilowatt-hours the panels produce, usually at a rate lower than what your local utility charges.
The catch? Most leases include a "price escalator."
This is a tiny clause that says your payment will go up by 2.9% or 3.5% every single year. It doesn't sound like much. But over a 20-year or 25-year term, that compounding interest adds up. If your utility company doesn't raise its rates as fast as your lease escalator, you could eventually end up paying more for solar power than you would have paid for standard grid electricity. It’s a gamble on the future of energy prices.
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Who gets the $7,500 check? (Hint: Not you)
One of the biggest reasons people find themselves asking if leasing solar panels worth it is the Federal Investment Tax Credit (ITC). Thanks to the Inflation Reduction Act, homeowners can currently deduct 30% of the cost of a solar system from their federal taxes. On a $25,000 system, that’s $7,500 straight back into your pocket.
When you lease, you get zero.
The leasing company owns the system, so they keep the tax credit. They also keep any state-level rebates or Solar Renewable Energy Certificates (SRECs). They argue that they pass these savings on to you via lower monthly payments, but let’s be real: they are a business. They are capturing the richest incentives to pad their own margins while you’re left with the convenience of no down payment.
If you have the tax liability to use that 30% credit, leasing is almost always a losing financial move compared to a low-interest solar loan. Loans allow you to own the asset, take the credit, and eventually pay the system off. With a lease, the payments never stop until the contract ends.
The "selling your house" nightmare
This is where things get sticky. Life happens. You get a job offer in another state, or you decide you need a bigger backyard. You put your house on the market, but there’s a 20-year lease attached to the roof.
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Many buyers are terrified of solar leases.
They don’t want to take over your 2.9% annual escalator. They don’t want a credit check from a solar company just to buy a house. According to real estate experts and studies from Lawrence Berkeley National Laboratory, owned solar systems typically add about $15,000 to $20,000 to a home's resale value. Leased systems? They can actually make a home harder to sell.
I’ve seen dozens of cases where sellers had to pay $15,000 out of their own pocket just to "buy out" the remainder of the lease so the new buyers wouldn't have to deal with it. If you plan on living in your home for the next 25 years, this isn't an issue. If you're a "five-year-and-out" kind of person, leasing is a massive risk.
Maintenance and the "peace of mind" myth
One of the biggest selling points for leasing is that the company handles maintenance. "If a panel breaks, we fix it!" they scream from the rooftops.
Technically true. But solar panels are incredibly durable. They have no moving parts. Most modern panels (like those from Qcells or REC) come with 25-year manufacturer warranties anyway. Inverters—the part that actually converts the power—might fail after 12 or 15 years, but even those usually have long warranties.
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The "peace of mind" you're buying with a lease is often coverage for things that rarely break. You're paying a premium for a service you might never actually use.
When is leasing actually the right move?
I’m not saying leasing is always a scam. It isn't. There are specific scenarios where it makes sense.
If you are a retiree on a fixed income with no federal tax liability, you can't use the 30% ITC anyway. In that case, letting a company take the credit and giving you a lower bill might be a fair trade. Or maybe you simply don't qualify for a solar loan and have no cash, but your local utility rates are skyrocketing at 10% a year. In those specific niches, a lease provides immediate relief.
But for the average working professional with a decent credit score? The math just doesn't favor the lease.
Is leasing solar panels worth it? The final verdict
If you care about the long-term Return on Investment (ROI), the answer is usually no. You are essentially trading the long-term equity of your home's energy production for short-term convenience.
Solar is an investment. Like any investment, you get the best results when you own the asset. Leasing turns a power plant on your roof into a utility company you can't escape. It's just a different bill with a different logo.
Actionable steps for your solar journey
- Check your tax liability. Look at last year's tax return. If you owe at least $7,000 to the IRS, you are a prime candidate for owning your panels rather than leasing them.
- Get three quotes. Never sign with the first door-knocker. Use a platform like EnergySage to compare local installers who offer both financing and cash options.
- Read the "Escalator" clause. If you must lease, negotiate for a 0% escalator. If they won't budge, walk away.
- Ask about "UCC-1" filings. Many leasing companies place a fixture filing on your property. Make sure you understand how this affects your ability to refinance your mortgage later.
- Compare the "Total Cost of Ownership." Ask the solar rep for a side-by-side comparison of the total cost of the lease over 20 years versus a 10-year loan. The difference will usually shock you.
Focus on ownership if you want to actually build wealth. If you just want a lower bill today and don't care about 2035, then maybe—just maybe—a lease is for you. But read the fine print twice. Then read it again.