Lease, PPA, loan or cash: which is cheaper in 2026?
Since buyers lost the federal tax credit, leases and PPAs often cost less per kWh than buying. But they're long contracts, and the details decide whether you save.
Checked November 12, 2026
| Cash | Loan | Lease | PPA | Prepaid lease or PPA | |
|---|---|---|---|---|---|
| You own it | Yes | Yes | No | No | No |
| You pay | All up front | Monthly, with interest | A monthly amount | For each kWh it makes | A lump sum up front |
| Federal credit in 2026 | None | None | The owner's, may lower your price | The owner's, may lower your price | The owner's, may lower your price |
| Price goes up each year | No | No | Often, by the escalator | Often, by the escalator | No |
| Repairs | Yours, after warranties | Yours, after warranties | Usually the owner's | Usually the owner's | Usually the owner's |
| Selling the house | Adds value | Pay it off or transfer | Buyer takes it over, or buy it out | Buyer takes it over, or buy it out | Usually transfers |
What the 2026 numbers show
On EnergySage's marketplace in the first half of 2026, a prepaid lease cost about 39% less per kWh than a cash purchase, and a prepaid PPA about 57% less. Traditional PPAs were cheaper per kWh than solar loans, but buying with cash still beat a traditional monthly PPA by about a third. The median cash quote was $2.57 per watt.
The reason is the tax credit: the company that owns a leased system can still claim 30% of its cost (for systems in service by the end of 2027), and buyers can't. Whether you see that saving depends on the price you're quoted.
How to compare any two offers
Turn each one into a cost per kWh: everything you'll pay, divided by everything the system will make over the contract. Then compare it with what that power saves on your bill. Check a quote
When each makes sense
- Cash: you have the money, plan to stay 10 years or more, and want the most savings over 25 years.
- Loan: the same as cash, if the interest rate is fair and there's no big dealer fee hidden in the price.
- Lease or PPA: you can't use or don't want to pay up front, the escalator is low (0% to 2%), and the starting price is well below your utility's rate.
- Prepaid lease or PPA: you can pay up front but want the leasing company's tax credit reflected in a lower price, plus their maintenance.
Sources: EnergySage: six months after the tax credit ended; pv magazine USA: residential solar prices rise as third-party ownership gains ground; Solar.com: the 30% tax credit for leases and PPAs.