When it comes to going solar, one of the first decisions you’ll make is how to pay for your system. There’s no single right answer for everyone. Each option—cash purchase, solar loan, or solar lease/PPA—has its own advantages, and the best choice depends on your financial goals, energy usage, and how long you plan to stay in your home.
After working with hundreds of homeowners, I’ve seen how the right financing plan can make a big difference in both short-term affordability and long-term return on investment. Let’s break down what each option really means.
Cash Purchase
Paying upfront is the simplest and most powerful way to go solar. When you buy your system outright, you become the full owner from day one. That means you qualify for the federal solar investment tax credit (ITC) and any local incentives or rebates. You also get the highest lifetime savings since there are no loan payments or interest.
Most of my clients who choose this route are homeowners looking for maximum return on investment and complete energy independence. Once installed, their only recurring cost is a small utility connection fee. Over time, they see the system pay for itself—often within 5 to 7 years—then enjoy decades of free electricity.
The only downside to a cash purchase is the upfront expense. However, with equipment prices lower than ever and financing readily available, more homeowners are finding ways to make this option work.
Solar Loan
For most homeowners, a solar loan is the perfect balance between affordability and ownership. With a loan, you still own the system, receive the tax credit, and benefit from lower electric bills—but you can spread the cost over time through manageable monthly payments.
In many cases, I’ve helped clients secure loans where the monthly payment is less than their old energy bill, meaning they start saving immediately. The best part is that once the loan is paid off, those savings increase even more.
Solar loans also offer flexible terms—often between 10 and 25 years—and many include zero-down or low-interest options. These loans can be financed through your installer, a solar lending partner, or your own bank. Since the loan is tied to ownership, you also build equity in your home as the system increases property value.
Solar Lease or PPA
A solar lease or Power Purchase Agreement (PPA) is a way to go solar without owning the system. Instead, a third-party company installs and maintains the panels on your roof, and you agree to purchase the power they produce—typically at a rate lower than what your utility charges.
This option is great for homeowners who want the benefits of solar but don’t want to deal with maintenance or upfront costs. The downside is that you don’t qualify for tax credits, and long-term savings are smaller since you’re essentially “renting” the energy rather than owning the system.
Still, leases and PPAs can be ideal for short-term homeowners or those with limited credit who want to start saving right away without a large investment.
Choosing What Works Best for You
Before signing any contract, it’s important to compare lifetime costs and total ownership benefits. Look beyond just the monthly payment—consider tax incentives, energy offset percentage, and resale value.
In my experience, the homeowners who take time to evaluate all three options usually end up saving the most. I always tell clients that solar isn’t just a home upgrade—it’s a financial decision that should fit their unique situation.
If you’re unsure which path makes the most sense, I offer free energy consultations to break down your potential savings, available incentives, and financing scenarios. With the right plan, you can start producing your own clean energy and keep more money in your pocket each month.