Solar Lease vs Buy Calculator: Cash, Loan, Lease and PPA Compared

A solar lease vs buy calculator adds up 25 years of bill savings, then subtracts what each option costs: the cash price, loan payments, lease payments or PPA bills. With the defaults, a 7.7 kW system nets about $41,397 if you pay cash, $18,160 with a loan, $16,998 with a lease and $19,017 with a PPA.

How to use the solar lease vs buy calculator

The system and your utility

1. Your state. Fills a typical Electricity rate and Yearly output per kW.
2. System size (7.7 kW), Yearly output per kW (1,350) and Electricity rate (18.2¢).
3. Yearly utility price increase. Default 3%.
4. Value of solar kWh vs retail rate (advanced). 100% under full net metering; lower under net billing.

The offers

5. Cash price ($23,100) and Rebates if you buy (advanced, $0).
6. Loan APR (7.99%) and Loan term (20 years).
7. Lease payment, first year ($110 a month) and Lease escalator (2.9% a year).
8. PPA rate, first year (13¢ per kWh) and PPA escalator (2.9% a year).

You get each option's 25-year net savings and the loan's monthly payment. A line chart tracks each option's running total year by year, and a bar chart compares the four 25-year results. The schedule lists bill savings, loan payments, lease payments, PPA bills and each option's running total for all 25 years, with a CSV download. The scenario table compares your inputs, 0% lease and PPA escalators, and utility prices rising 2 points slower.

How the calculation works

Output, year n     = system kW × yearly output per kW × (1 − 0.5%)^(n−1)
Bill savings, n    = output × rate × value factor × (1 + escalation)^(n−1)
Cash net           = total bill savings − (cash price − rebates)
Loan net           = total bill savings − total loan payments (on cash price − rebates)
Lease net          = total bill savings − Σ lease monthly × 12 × (1 + lease escalator)^(n−1)
PPA net            = total bill savings − Σ output × PPA rate × (1 + PPA escalator)^(n−1)

Assumptions that match the code:

• 25 years, with 0.5% yearly panel degradation.
• No upkeep for owners and none for lease/PPA customers, so owning looks slightly better than it would with an inverter replacement.
• No discounting: a dollar in year 25 counts the same as today.
• No fixed charges, no home-sale effects and no end-of-term buyout or removal.

Worked example

Default inputs: 7.7 kW, 1,350 kWh per kW, 18.2¢, 3% escalation, 100% value, $23,100 cash price, 7.99% loan for 20 years, $110 lease and 13¢ PPA, both escalating 2.9%.

• Cash: 25-year net savings $41,397 (break-even in year 11).
• Loan: $18,160, with a $193.07 monthly payment.
• Lease: $16,998. PPA: $19,017.
• In year 1, bill savings are about $1,892, the lease costs $1,320 and the PPA $1,351.

Second example, a sunny net-billing market: 7.7 kW at 1,755 kWh per kW, 15.3¢, solar kWh valued at 70% of retail (an assumption for partial export credit), $27,720 cash price, $120 lease, 11¢ PPA, other inputs at default.

• Cash nets $21,620; the loan ($231.69 a month) ends at −$6,265.
• The lease ends at −$2,477 and the PPA at −$688.
• With 0% escalators, the lease and PPA would net $13,340 and $14,325.

What your result means

Cash wins when you have the money and no better use for it. A loan can still beat a lease if the rate is reasonable and there is no large dealer fee. A lease or PPA makes sense mainly when you cannot use ownership benefits or want no repair responsibility, and only if the escalator stays below likely utility price growth.

Read our guide to solar lease vs PPA vs loan and how solar loans work, and check the loan terms in the solar loan calculator.

Rules that change the answer

• Tax credits. For owners, as of October 2026 the 25D credit does not apply to installs completed after December 31, 2025 (IRS (opens in a new tab)). For leases and PPAs, the owner may claim §48E if the project began construction by July 4, 2026 or is placed in service by December 31, 2027, subject to foreign-entity sourcing rules (P.L. 119-21 (opens in a new tab)). See our federal solar tax credit guide.
• Export rules set the value factor. Net billing in California and Arizona lowers it; use the solar savings calculator to estimate yours.
• Contracts. Treasury's lease (opens in a new tab) and PPA (opens in a new tab) guides list terms to check, though they predate the 2025 tax law.
• Pressure sales. The FTC (opens in a new tab) warns against signing without review; see solar sales red flags.

Common mistakes

• Ignoring the escalator because the first-year payment looks low.
• Assuming a lease includes the tax credit for you.
• Comparing a financed price with dealer fees against a cash price.
• Valuing solar at 100% of retail under net billing.
• Forgetting what happens to a lease when you sell your home.

Limits of this calculator

This is an educational comparison, not financial or tax advice. It does not include upkeep, inverter replacement, insurance, home-sale transfers, buyouts, removal costs, production guarantees or discounting. Read each contract in full and compare total costs, not just monthly payments.