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Lease Vs. Purchase Vs. PPA

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February 17, 2025
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You have a number of purchasing options for solar when you’re ready to make the switch. Whether you decide to purchase a system outright, acquire a loan to cover the cost, go in for partial benefit with a lease, or enter into a PPA, there’s no one size fits all path to a solar installation. With all these potential paths to choose from, it may feel intimidating to consider your options, and even harder to know which one is right for you. Luckily, in a solar consultation, your advisor will be able to help you navigate the many potential options for a solar system, and ultimately determine the one that will serve you best.

When you sit down with your consultant to review the options, you’ll start by discussing your needs. While all solar systems serve the same general purpose, expert designers can customize your system to cover the various needs of your life and home. Whether you’ve just added an EV charger or are considering installing a hot tub to your back yard, your usage and property will be taken into account and used to fine tune the operation of your solar installation.

There is also the type of operation you’re interested in, from covering your costs to whole home battery backup, there are a few key details to consider out of the gate. Once you’ve got a good idea of the system you’ll be installing, we can consider how to get that system on to your home.

A Breakdown of Purchasing Options

This is where your various purchasing options come into play. Depending on what kind and size of system you’ve designed, there may be certain state and federal incentives that come into play, and your choice of purchasing option will further compound that. Let’s look at the various options available to you.

Purchase

Purchasing your system outright is one of the defining purchasing options for solar, as this is the most common kind of transaction for most customers. You purchase your system outright and then you own it and all benefits that come with it. The pros of this path to solar acquisition are covered quite extensively on our article page, but the main one to highlight here is that in addition to the energy saving benefits of operating a system, you also gain a substantive property value increase and access to the 30% solar investment tax credit.

The main drawback of purchasing a solar system outright is that it can be expensive, and not everyone is prepared to purchase their system fully out of pocket. This is where some of the other purchasing options have a chance to shine.

Loan

With a solar loan, you’re achieving much of the same benefits as the purchasing option mentioned above, so much so that it really only appears on this list to bridge the gap between purchasing and leasing. The main difference with a loan is that you’d be choosing to leverage some of the excellent financing options available to you through our industry partners, who have designed loans specifically to benefit solar purchases.

Every kind of loan requires unique parameters, and solar is no different, so with this option you’d have all the benefits of purchasing with an added financial responsibility to manage until your system is paid off. The big highlight here is that you get to utilize that tax credit yourself.

Lease

Solar leases are an interesting purchasing option for solar, as you share the benefits and responsibilities of a solar system with another entity. With a solar lease, someone else owns the system on your home or property, and you benefit from the operation of the system by accruing some but not all of the traditional solar incentives. A big positive that makes this option stand out is that your system is maintained by the group you’re leasing the system from. This will be a familiar situation to anyone who has rented before – a good steward of a solar lease will ensure that your system is always up and running, providing you with savings on your energy bill.

Typically when it comes to leasing, there are financing options available which can mirror the kinds of payments you’d be making to a leasing company which would ultimately net you greater value through ownership, but some people prefer the hands off nature of leasing, and this is the reason we provide this as a purchasing option.

PPA

Solar PPAs are a comparably new purchasing option for solar, but they do represent a shift in thinking as to how a solar system could work for those who don’t have the means or desire to purchase one. A solar PPA mirrors the operation of a solar lease, but you purchase the power at a fixed rate, rather than paying a traditional lease for the “rental” of your solar system.

This kind of subscription model is newer to the industry, but it fits the popularity of purchasing partnerships, where a homeowner gains partial benefit for a system in exchange for peace of mind in terms of operating the system. It’s a more passive benefit, but if that is what you’re interested in, it’s a great option to have available.

Authentically, at the end of the day the best option for solar acquisition really is the one that best fits your needs and budget. Purchasing a solar system outright, whether through a full payment or with a loan, often provides the greatest possible value for your investment. This may be true in general, but it doesn’t mean that a different purchasing option wouldn’t be better for you and your family. The reason solar companies have developed these additional paths to solar access is because the benefits are so strong across the board that everyone should have a chance to experience them.

If a solar PPA fits your needs and budget better than a Loan or Lease, then you should definitely be considering that option, and this highlights perfectly the strength of a solar consultation. We know all this information about purchasing options because we work in the industry every day, but you shouldn’t have to become an industry expert yourself to get the best possible deal for your solar investment. Our consultants are ready to help simplify the process and provide you with straightforward purchasing options for solar that will help you make the most of your investment.



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