Is a lease or PPA better now that only they get the tax credit?

Not automatically. The credit improves lease pricing, but ownership still wins on lifetime savings because you keep all the production after payback instead of paying for 25 years. The credit narrowed the gap; it did not close it. Where leasing genuinely wins is when you cannot fund a purchase or have no tax appetite to speak of.

Can I buy out a lease or PPA early?

Usually yes, but the terms matter enormously and early buyouts are often expensive relative to the system's remaining value. Ask for the buyout schedule in writing before signing, and check whether the price is fixed, formula-based, or set at the provider's discretion — the last of those is a red flag.

What happens to a leased system if the provider goes out of business?

The contract is normally an asset that gets sold to another company, which then takes over billing and maintenance obligations. In practice, service quality after a transfer varies, and the maintenance promises that justified leasing can become harder to enforce. It is a real risk, and one reason provider track record deserves weight beyond the headline rate.

Solar Lease vs PPA vs Buying Outright: Which Makes Sense Now?

Since the federal credit ended for owners but survived for third-party ownership, this comparison changed completely. Here is the honest trade-off in 2026.

For fifteen years the standard advice was simple: buy outright if you can, because the 30% tax credit made ownership the clear winner. That advice is now out of date. Since January 2026, owners get nothing and third-party owners still get 30% — which does not automatically make leasing the better deal, but does mean the comparison has to be run again from scratch.

Home solar and battery equipment owned outright by the homeowner — Buying outright means you own the hardware and the savings — and, since 2026, absorb the full cost with no federal credit.

What each option actually is

	Buy outright	Lease	PPA
Who owns the system	You	The provider	The provider
What you pay	Full cost upfront or financed	Fixed monthly payment	Per kWh the system produces
Who claims the 30% credit	Nobody — 25D ended	The provider, via 48E	The provider, via 48E
Who maintains it	You	The provider	The provider
Typical term	—	20 – 25 years	20 – 25 years
Long-term savings	Highest	Moderate	Moderate
Upfront cost	Highest	Often $0	Often $0

The difference between a lease and a PPA is smaller than the marketing suggests. A lease is a fixed monthly rent for the equipment regardless of output; a PPA charges you per kilowatt-hour the array actually produces. A PPA shifts weather risk to the provider; a lease keeps your payment predictable. Both are third-party ownership, both claim 48E, and both are long contracts attached to your house.

How the credit reaches you in a lease or PPA

You never see it. The provider owns the system, claims the 30% investment credit as a business, and prices your contract accordingly — the benefit shows up as a lower monthly payment or a lower per-kWh rate than would otherwise be possible. That is real value, but it is passed through at whatever share the provider chooses, not credited to you directly.

There are deadlines on the provider's side. Third-party residential projects generally needed to begin construction under the safe-harbor window that closed in July 2026, or be placed in service by the end of 2027. Ask any salesperson which basis their pricing assumes and get the answer in writing, because a provider that loses eligibility mid-project has every incentive to reprice.

The escalator clause is where lease deals go wrong

Most leases and PPAs include an annual price escalator, commonly around 2.9%. Over a 25-year contract that compounds substantially — a payment starting at $120 a month ends near $240. The pitch usually compares year-one payment against your current bill, which flatters the deal considerably.

The comparison to insist on is total cost over the full contract term against total cost of ownership over the same period. Ask for the payment schedule for all 25 years, not the first-year figure. If the escalator is above roughly 3%, you are betting that utility rates rise faster than that — historically plausible, but it is a bet, and the provider has structured it in their favour.

The resale problem nobody mentions upfront

A leased or PPA system is a contract encumbering your home. When you sell, the buyer must either qualify to assume the contract or you must buy it out — and buyouts in the early years are frequently expensive. Owned solar generally adds to home value; leased solar has a mixed record and can narrow your buyer pool, since some buyers simply will not take on a 20-year obligation.

If there is any realistic chance you move within ten years, weight this heavily. It is the single most common source of regret with third-party ownership.

Where each option genuinely wins in 2026

Buy outright — you have the capital or access to cheap financing, you plan to stay put, and you want maximum lifetime savings. Still the best long-term economics despite losing the credit, because you keep 100% of the production forever.
Lease or PPA — you cannot deploy $20,000+ upfront, you have little or no tax appetite anyway, and you want someone else responsible for maintenance and performance. It is also the only remaining path to any share of the 30% credit.
DIY purchase — the cheapest route by a wide margin if you have the skills and a suitable roof, and the option the credit's removal hurt least. See is DIY solar still worth it without the federal tax credit.
None of the above — a genuine outcome where export rates are poor and your consumption is low. Run the numbers before assuming solar is right for your house.

Whichever you choose, price it against your own consumption rather than a salesperson's estimate: start with your actual daily kWh, and check the payback in how long until solar breaks even.

This is a description of how these contracts generally work, not financial or tax advice. Have any 25-year agreement reviewed by someone representing your interests rather than the provider's before you sign.