Financing
Solar financing in 2026: prepaid lease vs. cash vs. lease/PPA
With the residential credit gone for owned systems, how you pay for solar matters more than ever. Here’s how the three paths compare.
Why financing got more interesting in 2026
Before 2026, most homeowners defaulted to buying solar to claim the 30% residential credit. With that credit gone for owned systems, the choice of how to pay is no longer obvious — and the path where remaining credit value still reaches you is not the one most people expect.
Cash or loan: own it
Buying with cash or a loan means you own the system. Cash has the lowest lifetime cost; a loan lets you own with little down at the cost of interest. The value is long-term bill elimination and a home asset — but there is no federal credit on an owned system in 2026.
Best for: homeowners who plan to stay, want maximum long-term savings, and value owning the equipment.
Prepaid lease: a lower upfront cost
A prepaid lease lowers your upfront cost. The system is owned by a financing partner, which lets them capture the federal commercial incentive and apply that value as a reduction to your upfront payment. You are not claiming a tax credit yourself; the savings are built into a lower price. There is no credit check, no lien on your home, and you have the option to buy the system starting at year 6.
Best for: homeowners who want a lower upfront cost and a simpler path — no monthly lease payment and no credit check. Availability varies by market.
Lease or PPA: $0 down, save monthly
A lease or power purchase agreement requires no money up front. A financing partner owns the system; you pay a fixed monthly amount (lease) or a per-kilowatt-hour rate (PPA), typically below your utility. The credit value is reflected in your lower rate rather than paid to you.
Best for: homeowners who want to start saving now with no upfront cost and are comfortable not owning the system.
The one question that sorts it out
You rarely need a spreadsheet to find your starting point — just your goal:
- Own it and maximize long-term savings → cash or loan.
- Lower upfront cost, no credit check → prepaid lease (select markets).
- $0 down with immediate monthly savings → lease or PPA.
Frequently asked questions
Which solar financing option is best in 2026?
It depends on your goal. Cash or loan to own and maximize savings; a prepaid lease for a lower upfront cost with the federal commercial incentive applied (no credit check, select markets); lease/PPA for $0-down monthly savings.
How does a prepaid lease lower my cost?
The financing partner owns the system and captures the federal commercial incentive, applying that value as an upfront reduction to your payment. You don’t claim a tax credit yourself — the savings are built into a lower price.
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