As more homeowners turn to clean energy, understanding the leasing vs buying solar panels debate becomes essential. Both options offer unique benefits depending on your financial goals, homeownership plans, and environmental values. To help you make an informed decision, let’s explore the pros and cons of leasing vs buying solar panels, how they work, and which one aligns best with your needs.

Leasing Solar Panels: How Does It Work?

Leasing solar panels is like renting a system. You sign a long-term contract—typically 20 to 25 years—with a third-party provider. You pay a fixed monthly rate or agree to a solar PPA vs buy model, where you pay per kWh produced. This setup eliminates upfront costs and often includes maintenance. But how do leased solar panels work exactly? The solar provider owns, installs, and maintains the system, while you simply enjoy lower energy bills.

Though attractive for budget-conscious homeowners, leased solar panels come with limitations. Since you don’t own the panels, you're not eligible for solar tax credits. Transferring the lease when selling your home can also be tricky.

Buying Solar Panels: A Long-Term Investment

Purchasing solar panels—either outright or through financing—means full ownership and access to incentives. Homeowners who buy can claim a 30% federal tax credit and may qualify for additional state or local rebates. Ownership increases home value and simplifies resale. In the residential solar lease vs purchase debate, buying is ideal for those seeking long-term savings and maximum returns.

You can even use tools like a solar lease vs buy calculator to compare monthly savings, ROI, and incentive eligibility to help you decide.

Costs Comparison: Lease vs Buy

When comparing leasing solar panels cost with purchase options, leasing may seem cheaper upfront. However, escalating monthly payments can add up over time. Typical solar lease cost ranges from $50–$250/month. With ownership, though, you might pay $15,000–$30,000 upfront, but those panels eventually pay for themselves.

For commercial applications, a commercial solar lease may help businesses benefit from solar without heavy capital investment, although ownership still brings the most control and incentives.

Tax Credit Considerations

An important question to ask is: Do leased solar panels get tax credit? The answer is no. Only system owners qualify for federal and state tax credits. This makes a strong case for those wondering is it better to own or lease solar panels, especially if reducing tax liability is a key goal.

Should You Buy or Lease?

There’s no one-size-fits-all answer to the solar panels buy or lease debate. Leasing might be better if you want a no-maintenance, low-entry solar solution. Buying, on the other hand, offers long-term savings, higher property value, and better financial incentives.

To get started with the most suitable solar plan—whether you choose to lease or buy—connect with trusted professionals like Solar SME for expert consultation and tailored solar solutions.