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.

By ETW Energy · June 5, 2026 · Updated July 20, 2026

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.

See the ways to pay side by side

Enter your electric bill and compare the four paths — cash, loan, prepaid lease, and lease/PPA — against what you’d otherwise pay the utility over the next 25 years.

Compare the ways to pay

Your current monthly electric bill$180

What you’re on track to spend on electricity over 25 years (at ~3%/yr increases)

~$78,800

Solar offsets a large share of this — not all of it. You stay grid-connected, and exactly how much you offset depends on your system and utility (that’s a Build Your System number). What’s below is how to pay for the system that takes the bite out.

	Cash	Loan	Prepaid lease	Lease / PPA
Upfront cost	Full system cost	Little to none	Lower (pay via cash or a loan)	$0
Monthly payment	$0	Loan payment	None	A below-utility rate that escalates
You own it	Yes	Yes	Option to buy from yr 6	No
Payments end	Right away	When it’s paid off	—	Ongoing
25-year value	Highest	High	Lower upfront	Modest

Owning (cash or loan) keeps the most of your solar savings for the long run — you pay for the system once, then your power is largely free. A lease or PPA lowers your bill modestly, but the payment keeps going and you don’t own the system.

Illustrative — the 25-year figure is your total electricity spend at ~3%/yr rate increases, not a savings figure; your real numbers (how much solar offsets, system size, price, incentives) come from Build Your System. A prepaid lease isn’t a loan, cash purchase, or lease-to-own, and has an option to buy starting at year 6; the financing partner — not you — captures the federal commercial incentive and prices it in.

Get your real numbers → Build Your System

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.

Get straight answers for your home.

Reading up is smart. When you’re ready, tell us about your home and we’ll give you honest, local numbers — no pressure.

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