Leasing vs Buying Solar Panels - The Complete Pros and Cons Overview

Solar power is one of the fastest-growing ways of generating electricity. There are two popular ways of getting access to this power. You can either lease or buy it. 

Both of these options have advantages and drawbacks. But which one will be best for you? Keep reading to take a closer look at each option and find the right one for you. 


Leasing solar panels involve paying a monthly fee. Then, you will be able to access the benefits of having solar panels on your roof. However, you will not own these panels. In this model, the installing company will be responsible for the maintenance and installation of these panels. 


Not Responsible for Maintaining the System

In this scenario, the solar leasing company is responsible for maintaining the solar system. If hail damage were to occur to the solar panels, the solar leasing company would come repair your system. If an inverter failed or if any wire connections needed to be addressed, the leasing company would bear the burden of getting your system back in working order. In reality, solar panels are designed to be extremely durable, they can withstand golf ball sized hail and 180 mph winds; you can even stand or jump on them. And because they have no moving parts they are not prone to many issues if installed correctly. If you own the panels, then the installer/manufacturer warranties and your homeowners insurance are responsible for protecting your investment. 

Set Monthly Fee

You will be required to pay a fixed amount each month. This makes a solar lease easy to budget for. Often, this will be substantially lower than your typical monthly electricity bill. As a result, you will be able to immediately see the financial benefits of going solar.

Easier to Qualify For

If you want to buy a solar system, you will often need to take out a loan. This can be a major problem if you don’t have a good credit score. The leasing company might still check your credit score, using it to determine how much you should pay each month. But you will still be able to qualify for this system with a low credit score. 


To make this system even more affordable, it’s common for residential households to get a lease without needing to put down a deposit. You go straight into paying the monthly fees. 

Potential to Offset Electricity Bill

You will be able to sell unused solar power back to the grid, for a fee. This is a process called net metering. This article explains how it works. How much money you will be making will depend on a few factors. These are: 

  • The number of panels you have
  • How much sunlight you receive in your area
  • The amount of power you are using
  • How much your state pays for electricity

In some cases, you will be able to earn enough money to offset the electricity bill. In effect, this means that you will have free electricity that month. 

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While there is plenty of upside to purchasing one of these systems, there are a few downsides to consider too. 

Not Eligible for Government Incentives

The state and federal governments have a range of solar incentives, like the Federal Solar Tax Credit, which can end up saving you a lot of money at tax time. However, these will only apply to those who are buying the systems. If you are leasing the solar, you won’t be able to claim these incentives. They will go to the company leasing you the panels. As a result, you could end up missing out on a lot of savings. 

Lower Long-Term Savings

Leasing a system will lock you into a monthly payment system for years to come. When compared to buying the panels, this is the more expensive option. Plus, the monthly cost will often increase over time as the cost of electricity rises, between one to five percent per year. Having ownership of the panels locks in your cost for 25 years. 

Makes Selling the House More Difficult

A solar lease will last a long time, often spanning 20 to 30 years. This can cause some problems if you ever need to sell the house. You will need to talk to the new owners about the lease and get them to take on the obligation. Plus, because you don’t own the panels, the lease won’t be adding any additional value to the home. 

Leasing Vs Buying Solar Panels


The other option that you can explore is buying solar panels. Often, you will need to take out a loan to do this. However, once you finish paying it off, you will have full ownership of the panels. 


Free Electricity

One of the biggest benefits is that you only need to pay for the system for a relatively short period. It’s estimated that the payback period is between eight to 12 years. Once you’ve finished paying off the loan, you own the system. Depending on its size, this could be enough to eliminate your electricity bills. This can end up saving you thousands of dollars each year, especially when you consider that most modern panels will last for 25 years. 

Plus, you will be making money through net metering, as you sell some of your excess electricity back to the grid. 

Increasing the Value of Your Home

Unlike leasing, you own the panels. These are a huge incentive for a future buyer. They want the ability to lock in low or no electricity bills for years to come. How much value this will provide can vary from state to state. On average, though, buyers will be willing to pay an additional $15,000. 

Access to Government Grants and Tax Benefits

As we mentioned, there is a range of government incentives to encourage people to take up solar. These include: 

  • Federal Income Tax Credit (FITC)
  • Grants 
  • Rebates
  • State-level tax incentives

To find out what is available in your area, check out this interactive map

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High Purchase Price

One of the biggest downsides is the amount of money you will need to spend to purchase one of these systems. While the cost has been going down, thanks to new technology, it is still very high. On average you will need to pay around $13,000 to $15,000 but can vary greatly depending on your energy consumption. 

Because of this, most people will need to take out a loan. Usually, this will attract an interest rate of one to five percent, depending on your credit score. This makes purchasing the panels a very expensive option for many households on the frontend. 

Responsible for Maintenance Yourself

In addition to paying for the panels, you will be responsible for taking care of any maintenance yourself. In most cases, this will be fairly easy and covered by either warranty or home insurance. For example, you will need to clean the dust off the panels occasionally, although rainfall in Arkansas is so common there likely won’t be a need to do so. 

Solar installers typically offer a labor warranty for 2-3 years, meaning any workmanship issues that may arrive are covered at no cost. Because there are no moving parts, if no issues arise in this period your system should last for many years to come.

At other times, damage will be more substantial. For example, the panels might be damaged as the result of a severe storm. Most rooftop solar energy systems are covered by standard homeowners policies, which doesn’t change your insurance plan. However, you may need to increase the amount of coverage on your home to account for the cost of the system which can then raise your premium.

Which One is Best For You?

Here is a brief recap of some of the most important pros and cons of each approach: 





Set monthly fee

Not eligible for government incentives


Maintenance is paid for

Lower savings over the long term


No need to qualify for a loan

Poses challenges when selling the house


Increase the value of your home

Higher purchase price


Access to government incentives

Required to pay for maintenance

Which one is best for you will often depend on your finances. If you can afford it, buying the panels will be the better option. You will be able to save more money, as the system will eventually pay for itself and you will have free electricity. Plus, you can get generous government rebates and tax credits. 

However, if you prefer to take a hands-off approach, leasing is the best choice. All the maintenance and upkeep are taken care of for you. All you need to do is pay the monthly fee and you can enjoy the benefits.

Final Thoughts

Both of these options are a good choice and both will save you money. The right choice for you will often be a combination of your finances and how involved you want to be in the process. But, if you can afford it, it’s usually best to purchase your solar panels.