Buying vs. Leasing Solar Panels: Which Option Is The Right for You?

Switching to solar energy is a smart way to lower your electricity costs, but choosing between buying and leasing solar panels can be overwhelming. Each option comes with its own benefits and trade-offs, and the right choice depends on your financial goals and energy needs. In this guide, we’ll break down the differences, pros, and cons of buying vs. leasing solar panels so you can make an informed decision.

What’s the Difference Between Buying and Leasing Solar Panels?

The main difference comes down to ownership:

• Buying solar panels means you own the system, whether you pay upfront or finance it with a loan. You benefit from incentives and long-term savings.

• Leasing solar panels (or using a Power Purchase Agreement, PPA) means a solar provider owns the system on your roof, and you pay for the electricity it produces at a lower rate than your utility company. Many leases and power purchase agreements do allow homeowners to purchase the system at a reduced cost after 5 years.

Pros & Cons of Buying Solar Panels

Pros:
✔ Higher long-term savings – Once the system is paid off, your electricity is essentially free.
✔ Eligible for incentives – You can claim the 30% federal tax credit and any state/local incentives.
✔ Increases home value – Added equity from a solar system can boost your home’s resale value.
✔ More energy independence – You own your own power source.

Cons:
✘ Upfront costs – Even with financing, the initial cost can be higher than leasing, usually loan payments are higher than your current electric bill for a few years until you break even. Usually after around 5-8 years the cost of electricity surpasses what your loan payment is.
✘ Maintenance responsibility – While solar panels are low maintenance, any repairs or upkeep are on you (unless covered by a warranty).

Pros & Cons of Leasing Solar Panels (PPA)

Pros:
✔ No upfront costs – Most leases and PPAs require little to no money down.
✔ Immediate savings and predictable pricing – You pay a lower rate for solar energy than your utility's electricity and have a predictable transparent rate plan.
✔ No maintenance required – The solar provider owns the system and is responsible for repairs and upkeep.

Cons:
✘ No ownership incentives – You don’t qualify for the federal tax credit.

Which Option Is Right for You?

Buying is best if:
✔ You want to maximize long-term savings.
✔ You qualify for solar incentives like the federal tax credit.
✔ You plan to stay in your home long enough to see a return on investment or intend on selling the home with the added equity.

Leasing or a power purchase agreement is best if:
✔ You prefer no upfront costs and immediate savings.
✔ You don’t want to handle system maintenance.
✔ You want to go solar but don’t qualify for incentives or financing.

Both buying and leasing solar panels offer ways to reduce your electricity costs, but the right option depends on your financial goals. If you’re looking for maximum long-term savings and ownership benefits, buying is the way to go. If you want to avoid upfront costs, maintenance responsibilities and simply pay for affordable power, a lease or power purchase agreement could be a better fit.

Not sure which option is right for you? Contact Ohio Solar Initiative today for a free solar report. Our team will walk you through your options and help you find the best solar solution for your home and budget. Get started today!