Solar Loan vs Lease: Which Is Right for Your Home
Written by HyreSolar Research Desk Primary-source research and fact checking
Quick answer
Solar Loan vs Lease comes down to upfront cost, lifetime savings and how long you plan to stay in the home; here is each factor side by side.
Both offers usually start at $0 down and a monthly payment. A loan payment buys the system: when it is paid off, typically within the term, the payments stop and the savings are all yours.
A lease payment rents it: payments run for the whole 20 or 25 years and you never own it unless you buy it out. The traps differ too. Loans can hide a fee of 10 to 30 percent in the principal; leases can hide a yearly escalator.
Cost side by side
Installed prices as other publishers state them, gross of incentives. Each range is the median published low to the median published high across at least 12 dated sources, retrieved October 21–22, 2026; the source rows sit on the linked cost page.
| Option | Published range | Sources |
|---|---|---|
| What a loan finances: typical installed system | $22,100–$27,500 | 14 dated |
No 30% federal credit is subtracted: Section 25D ended for expenditures after December 31, 2025.
Solar loan vs lease, side by side
| Solar loan | Solar lease | |
|---|---|---|
| You own the system | Yes, from day one (with a lien until repaid) | No; the provider owns it |
| Payments end | When the loan is repaid; CFPB says 8 to 25 year terms, usually repaid in 7 to 9 | At the end of the 20 or 25 year term |
| Hidden cost to look for | Dealer fee in principal: typically 10 to 30% of cash price (CFPB) | Annual escalator in the payment |
| Stated rate | Typically 1 to 7% APR, often excluding the fee (CFPB) | Not a loan; no APR is disclosed |
| Maintenance | Yours after warranties | Included in the contract |
| Federal credit | None since Dec 31, 2025 | Provider may claim a business credit |
| On sale of the home | Pay off, or subordinate the fixture filing | Buyer qualifies and assumes, or you buy out |
Sources: CFPB Issue Spotlight (Aug 2024); Fannie Mae Selling Guide B2-3-04; Sunrun Form 10-K for fiscal 2025.
The number that decides a loan: the cash price
The CFPB found that solar lenders "include substantial markups and fees that can increase the loan principal," typically 10 to 30 percent of the cash price and sometimes over 50 percent.
Its own worked example turns a $30,000 system into a $39,000 loan. The low APR is real; the fee is simply in the principal instead of the rate.
So get the cash price in writing before comparing anything. If the loan principal is well above it, the gap is the fee. The dealer fee calculator works out its effective cost.
A lease has no principal to inflate, which is one reason some lease offers look better than they first appear against a fee-loaded loan.
Savings over 25 years
A panel produces for decades; a loan stops. Once a loan is repaid, every kWh the system produces is a saving with no payment against it.
On a lease, the payment is there every year of the term, and if it escalates, it is largest at the end, when panels have degraded slightly and produce a little less.
That structural difference is why ownership almost always wins over 25 years on the same system, unless the loan carries a heavy fee.
The CFPB adds a caution for loans written around the old tax credit: payments that "jump" after about 18 months if the borrower does not prepay an amount equal to the expected credit.
With Section 25D gone, a loan still structured that way expects a prepayment you have no refund to make. Ask whether the payment changes at any point.
Compare the two over the same term using the lease payment and escalator, and the loan’s true principal and rate, in the lease vs buy calculator.
Which to choose if…
- 1The loan principal equals the cash price
The loan usually wins over the life of the system.
- 2The loan carries a large dealer fee and you cannot find a cleaner lender
Price a lease, or see HELOC vs solar loan for a lender separate from the installer.
- 3You do not want to handle repairs or inverter replacement
A lease puts that on the provider.
- 4You may sell in a few years
A loan you can pay off at closing is usually simpler than a lease the buyer must assume.
When you are ready
Ready to explore solar for your home?
If you have done your research and want to speak with a solar professional, HyreSolar can help you explore available options.
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Keep learningQuestions
Is a solar loan better than a lease?
Does a solar loan put a lien on my house?
Can I pay a solar loan off early?
Sources & retrieval dates
- CFPB, Solar Financing Market Issue Spotlight (August 2024) , Hidden fees typically 10 to 30 percent of the cash price, can exceed 50 percent; stated APRs typically 1 to 7 percent; terms of 8 to 25 years against typical repayment in 7 to 9 years; PPA escalators of 1 to 5 percent; home equity financing usually keeps financing and installation contracts separate. Retrieved 22 October 2026.
- CFPB consumer advisory: Steer clear of costly and complex loans for solar energy installation (August 2024) , Monthly payment that jumps after 18 months unless a payment matching the projected tax credit is made; ask the salesperson for the cash price; consider bank or credit union financing. Retrieved 22 October 2026.
- Fannie Mae Selling Guide, B2-3-04 Properties with Solar Panels , Leased and PPA panel value excluded from appraised value; payments in the debt ratio; senior fixture filings must be subordinated. Retrieved 22 October 2026.
- Sunrun Inc., Form 10-K for fiscal 2025 , Agreements typically 20 or 25 years; rates fixed or escalated at a predetermined percentage; optional upfront prepayment, with prepaid customers refunded for underproduction yearly; maintenance included; end-of-term renewal, fair-market-value purchase or removal; transfer-on-sale terms. Retrieved 22 October 2026.
- Public Law 119-21 , Section 25D terminated for expenditures after December 31, 2025. Retrieved 22 October 2026.
HyreSolar does not install, finance or sell solar. This page is general information, not tax, legal or financial advice; terms, prices and rules vary by state, utility and contract.