Solar Leases vs. Buying: Legal Implications and Payback Differences

When going solar, you have two main options: buying the system (with cash or a loan) or entering into a third-party ownership agreement (a lease or Power Purchase Agreement - PPA).

The Legal Differences

When you buy, you own the equipment. You are legally entitled to all tax credits, rebates, and the increased property value. When you lease, the solar company owns the equipment. You are simply signing a contract to rent the equipment or buy the power it produces.

Payback and ROI

Buying: Has a defined payback period. Once the system is paid off, the electricity is free. This offers the highest long-term financial return.

Leasing/PPA: Does not have a traditional "payback period" because you don't own the asset. You typically see immediate savings on your monthly bill, but the long-term savings are significantly lower than buying. Furthermore, leases can complicate the sale of your home, as the new buyer must agree to take over the contract.