Solar Lease vs Buy Calculator
Compare cash purchase, solar loan, and lease/PPA over 25 years — and see exactly who claims the 30% federal tax credit under each option in the post-OBBBA market.
The Section 48E passthrough construction-start window has CLOSED for new projects.
The deadline to begin construction on a new 48E-eligible project was July 4, 2026 — that date has now passed. New lease/PPA deals entered after the deadline no longer qualify for the 30% Section 48E credit, so the passthrough discount should NOT be assumed for a brand-new deal today. Only projects that began construction before July 4, 2026 are grandfathered in (under the IRS continuity safe harbor, they must be placed in service by December 31, 2030 for projects that began construction in 2026).
The lease/PPA numbers below default to the grandfathered (pre-deadline) scenario so they stay consistent with the worked examples on this page. Use the “Apply 48E passthrough” toggle in Advanced assumptions to model a new, post-deadline deal.
Your Details
Enter a system size between 3 and 20 kW.
Advanced assumptions
Assumptions: 2.5%/yr utility escalation, 0.80 performance ratio, $200/yr maintenance (owned systems), 2.9%/yr PPA escalator, $0 federal credit for owned systems (25D expired December 31, 2025; the 30% Section 48E passthrough is toggle-controlled above and applies only to grandfathered lease/PPA deals that began construction before the July 4, 2026 deadline).
Who Gets the 30% Tax Credit?
Cash Purchase & Solar Loan
No federal credit for owned systems in 2026.Section 25D (the 30% Residential Clean Energy Credit) expired December 31, 2025 under OBBBA, so a cash purchase or solar loan for a system installed in 2026 receives $0 back.
Lease & PPA
The installer/lessor claims the 30% Section 48E investment credit because they own the system. You do NOT receive the credit directly. You may benefit indirectly through lower monthly payments, but you forfeit the direct tax benefit. Important: the 48E construction-start deadline (July 4, 2026) has closed — only lease/PPA deals that began construction before that date can still claim it.
Cash Purchase
Upfront (after credit)
$13,720
25-yr net savings
$0
Break-even
—
Tax credit
$0 — 25D expired 2025
Solar Loan
Monthly payment
$0/mo
Total interest
$0
25-yr net savings
$0
Break-even
—
Section 25D expired December 31, 2025 — no federal credit on a 2026 solar loan.
Lease / PPA
Upfront
$0
Year 1 payment
$0/mo
25-yr net savings
$0
Break-even
—
⚠️ 48E passthrough applied — grandfathered / pre-July 4, 2026 construction-start deals only. The installer/lessor claims the 30% Section 48E credit; you cannot.
25-Year Cumulative Net Position
Above the zero line = net savings. Below = net cost. Tap the legend to toggle a scenario.
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Get Free Solar QuotesSolar Lease vs Buy in 2026: What the OBBBA Tax Credit Changes Mean for You
The 30% Credit Shift — Why It Matters More Than Ever
Under OBBBA, the residential 25D credit (the one buyers used to claim) expired December 31, 2025 — a cash purchase or solar loan for a system installed in 2026 receives no federal tax credit at all. The business-side 48E Clean Electricity Investment Credit, however, remains at 30% for the entities that own the equipment — but only for leased and PPA systems that began construction before the July 4, 2026 deadline, which has now closed. New lease/PPA deals entered after that date no longer qualify for 48E, so the passthrough discount should not be assumed for a brand-new deal today. For grandfathered (pre-deadline) deals, the asymmetry still matters: installers who locked in 48E can claim it on the systems they own, giving them a financial incentive to steer homeowners toward leases and PPAs. This creates a persistent information gap: many homeowners sign a lease never realizing that, in 2026, buying outright no longer carries a federal credit to compare against. The calculator above attributes the credit explicitly under each model so there are no surprises at tax time.
When a Lease or PPA Actually Makes Sense
Leases and PPAs aren't inherently bad — they're just a different trade. They can be the right call when (1) you have minimal federal tax liability and couldn't use the 30% credit anyway, since a credit you can't absorb is worth $0; (2) you want genuinely zero upfront cost and zero maintenance responsibility, with the installer handling inverter swaps and repairs; or (3) you plan to move within roughly 10 years, though lease assumption by a buyer can be difficult and sometimes kills a home sale. The break-even figures above show your personal tipping point under each scenario. Use them, not a salesperson's pitch, to decide.
The Hidden Cost of Lease Escalators
Most PPAs carry an annual escalator around 2.9%, meaning your per-kWh payment climbs every single year. A payment that starts at $150/month grows past $300/month by the end of the term. Compare that to a cash purchase or a paid-off loan, where your ongoing energy cost is effectively fixed at $0 — just sunlight. This calculator models escalators accurately, so watch the lease line in the chart above: it often starts as the cheapest option and then flattens or dips over time as the escalator eats into your savings. That crossover is the single most important number in any lease-versus-buy decision.
How the 48E Passthrough Actually Works (in Plain English)
The single most confused part of the 2026 solar market is the 48E passthrough. Here is the plain-English version. Section 25D — the 30% credit you used to claim as a buyer — expired December 31, 2025. So a cash or loan purchase in 2026 gets 0% federal credit. But on a lease or PPA the lessor owns the system and claims the 30% Section 48E credit, then bakes part of that value into lower payments for you. You never file anything for 48E — the benefit is embedded in the contract, not handed over separately.
Illustrative worked example (not a quote)
Assume an ~8 kW system with a gross cost of ~$28,000. The lessor claims 48E worth ~$8,400 (30% of $28,000), keeps a margin, and passes part of the value through as:
- a lower monthly lease payment — e.g. a no-credit lease around ~$185/mo drops to about ~$150/mo with the passthrough (~$35/mo lower), or
- a lower per-kWh PPA rate — e.g. ~$0.17/kWh falls to ~$0.14/kWh.
Over a 20-year term that ~$35/mo is roughly ~$8,400 in lower payments — which exists only because the lessor captured 48E. A cash buyer in 2026 keeps the full $28,000 cost with $0federal credit. The 48E value is never a separate check or a line item labeled "48E credit" — it is simply reflected in the lower rate.
Want the full mechanics and deadlines? Read our Section 48E Pass-Through Guideand the Post-25D Financing Inversion analysis.
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Estimates use state-level EIA residential rates and NREL peak-sun-hour averages and are for planning purposes only. Actual savings vary with local rates, weather, shading, roof orientation, and installation factors. Tax credit rules continue to evolve under OBBBA — confirm your situation with a tax professional.