Solar services
Solar financing
The four ways to pay for solar, what each one means for ownership and selling the house, and where the costs hide.
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Written by HyreSolar Research Desk Primary-source research and fact checking
The short answer
There are four ways to pay for home solar: cash, a loan, a lease or a power purchase agreement. With cash or a loan you own the system.
With a lease or PPA a third party owns it and you pay for the equipment or the power. The choice changes the total cost, who claims any incentive, and what happens when you sell.
Before choosing how to pay
Loan prices can include a 10 to 30% fee, per the CFPB.
A buyer must take over a lease or PPA, or you buy it out.
Section 25D ended for expenditures after 2025.
Who owns it, who pays for what
The four options differ mainly in ownership.
You own it, pay once, and keep all the savings.
You own it; the lender holds a lien or security interest until it is paid. See UCC-1 liens.
A company owns it; you pay a monthly fee, often with an annual escalator.
A company owns it; you pay per kilowatt-hour it produces. See lease vs PPA.
Where financing costs hide
The CFPB’s 2024 spotlight found that some solar loans carry a dealer fee of 10 to 30% built into the price, which can make a low APR loan more expensive than it looks. Compare the financed amount with the cash price for the same system.
On a lease or PPA the cost lives in the escalator. A small yearly increase compounds over a 20 or 25 year term; the escalator calculator shows the total.
Choosing how to pay, in order
Every financing option is measured against it.
APR, term, dealer fee, prepayment terms.
Starting rate, escalator, term, buyout.
Over the same period, against your expected bill.
Transfer or payoff requirements if you move.
What raises the total cost of financing
Financing turns one price into many. These factors move the total.
| Factor | Effect on a solar Financing quote |
|---|---|
| Dealer fee | Paid by the installer to the lender, passed into your price. |
| APR and term | Longer terms mean more interest. |
| Escalator | Annual increase on lease and PPA payments. |
| Re-amortization clauses | Some loans assume a lump-sum paydown; missing it raises the payment. |
| Buyout terms | What it costs to exit a lease early. |
Run the numbers with the loan calculator and lease vs buy calculator.
Questions about any solar financing offer
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Questions
Is it better to lease or buy solar?
Can I get a 30% tax credit on home solar in 2026?
Does solar financing affect selling my house?
Written and audited by
HyreSolar Research
Primary-source research, data analysis and fact checking
We are a research desk, not a sales floor. We read the statute, the tariff, the code section, the federal filing or the manufacturer data sheet ourselves, and we publish the figure with the document it came from and the date we retrieved it.
Where a number cannot be traced to a primary source, we publish the shorter page and say what we could not verify. That rule has cost us whole sections, and it is why the rest can be checked.
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Sources & retrieval dates
This page on solar Financing is general and varies by location, utility tariff, building code, roof and your own circumstances. It is not tax, legal or engineering advice. HyreSolar is an independent information site: we do not install, finance, service or inspect solar systems, and we do not supervise or warrant anyone who does.