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Solar loan vs lease vs cash calculator

25-year net gain of cash, a loan and a lease, side by side.

USD
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%
USD
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years
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USD/month
%
years
Bill savings over 25 years (same for all three)
$85,228.70
Monthly loan payment
$216.92
Total lease payments
$64,771.81
Net gain with a loan
$33,168.94
Net gain with a lease
$20,456.89
Net gain paying cash
$57,228.70

Use the numbers in your quotes. The defaults are only an example.

How the three options are compared

All three start from the same bill savings: the first-year savings grow each year with the electricity price increase and shrink with the panels' output loss, for 25 years. Then:

  1. Cash: savings minus the cash price.
  2. Loan: savings minus all loan payments. If the loan includes a dealer fee, it is added to the amount you borrow.
  3. Lease: savings minus all lease payments, which rise each year by the lease's escalator.

To estimate your first-year savings, use the solar payback calculator, or the NEM 3.0 calculator in California.

What the comparison leaves out

  • Who owns the system: with cash or a loan you own the panels; with a lease, the company does, and usually handles maintenance.
  • The value of your money: cash spent on solar can not earn interest elsewhere.
  • Selling your home: a lease may have to be transferred to the buyer or bought out.
  • Tax credit: the federal Residential Clean Energy Credit does not apply to systems placed in service after December 31, 2025.

For a loan with a hidden fee, check the real APR with the solar loan payment calculator.

Frequently asked questions

Is it better to lease or buy solar panels?

With the example values, paying cash gives the largest 25-year net gain, then the loan, then the lease. A lease needs no upfront money, but its payments, especially with an escalator, take a large part of the savings.

What is a solar lease escalator?

A yearly increase in the lease payment written into the contract. A 2.9% escalator raises a $150 payment to about $300 after 25 years.