Solar Leasing vs Buying: What’s the Difference?

If you’ve started researching home solar—or had your door knocked on by a solar salesperson—you’ve likely come across two of the most common ways to go solar: buying solar panels or signing a solar lease.

Both options can help lower your electric bill and reduce your reliance on the utility company, but they work very differently. Understanding those differences is the key to choosing the best fit for your home, budget, and long-term goals.

Over the past year, we’ve seen an influx of solar companies in the New River Valley promoting solar leases. We love seeing more solar in the NRV—but we also want homeowners to understand the fine print in a solar lease and what to look for when evaluating a lease provider. Getting locked into a long-term contract with a company that delivers poor workmanship and unreliable service is the last thing we want for homeowners going solar.

What Is a Solar Lease?

With a solar lease, there are three parties involved: the homeowner, the solar installer, and the solar lease provider. While the solar company installs the system, the lease provider finances and owns it for the duration of the contract.

Homeowners typically enjoy little to no upfront cost and pay a monthly fee to use the power the system produces. This monthly fee often includes an annual increase known as an “escalator,” which increases the monthly payment each year. Because the lease provider owns the system, they also claim the 30% federal tax credit to go solar and can choose to pass the savings on to the homeowner in the form of a lower monthly payment. 

Most solar leases also include options to purchase the system at certain points throughout the contract or at the end of the term. However, these buyouts come with an additional cost, which means that even though you make monthly payments, you will still have to pay to fully own the system later if you choose that route.

Think of a solar lease like leasing a car: you get the benefits of using it, but you don’t own the asset.

What to Keep in Mind with Solar Leases

One important consideration is trust—you’re relying on a third-party company to act in your best interest for 15–25 years. It’s important to choose a company you can trust will use the best materials, install the system correctly, provide service quickly, and remain financially stable for the life of your lease.

Another important factor is home resale. A solar lease must be transferred to the new buyer—or paid off—before selling your home. Leased systems typically do not increase property value, and some buyers may be hesitant to assume a long-term contract.

Key Features of a Solar Lease

• Little to no upfront cost
• Fixed monthly payment (often with an annual escalator)
• Maintenance and repairs covered by the leasing company
• You are not eligible for solar tax credits or incentives (the lease provider may choose to pass along some benefits)
• Long-term contract, usually 15-25 years
• Possible buyout option depending on the agreement

A solar lease can be ideal for homeowners who want immediate savings with minimal responsibility, but it’s not always the most cost-effective long-term option. That’s where buying comes in.

Buying Solar Panels: How It Works

When you buy your solar system—either with cash or a solar loan—you become the full owner from day one. Ownership means you receive all the long-term financial benefits and incentives, including net metering savings, Solar Renewable Energy Certificates (SRECs), and any increase in home value.

Once your system is paid off, the electricity it produces is essentially free for the rest of the system’s lifespan, which is typically 25+ years.

Why Many Homeowners Prefer Buying

Owning your solar system gives you full control over equipment choices, upgrades, service decisions, and long-term planning. Because owned solar becomes a property asset, it often makes homes more attractive to buyers and can increase resale value.

Buying also provides the greatest lifetime savings—often tens of thousands of dollars more than leasing over a 25-year period.

Key Features of Buying Solar

• You own the system outright
• Eligibility for all available incentives (Net metering and SRECs)
• Highest lifetime savings compared to leasing
• Adds value to your home
• You’re responsible for maintenance (though most equipment has strong warranties)
• Requires upfront payment or a solar loan

Buying solar is typically the best choice for homeowners who want full control of their system and are looking to maximize financial returns.

Solar Lease vs. Buying: Which Is Better for You?

Both options can reduce your utility bill and move you toward clean energy, but the right choice depends on your goals, budget, and how long you plan to stay in your home.

A Solar Lease May Be Right If You:

• Want a $0-down option
• Prefer not to handle maintenance
• Need predictable monthly energy costs
• Want immediate savings without upfront expenses

In short:

• Leasing gives you lower upfront costs but long-term commitments and less control.
• Buying gives you ownership and maximum savings, but requires an upfront investment or loan.

Still Deciding? We’re Here to Help

Although we’re not currently offering solar leases at Baseline Solar, we may in the future—and we’d love to know if that’s something that interests you.

If you’re unsure whether a solar lease vs. buying solar panels is the best choice for your home, our team can walk you through your options based on your roof, energy usage, budget, and long-term savings goals.

Have questions? Reach out anytime—our experts are here to help you make a confident and informed solar decision.