Financing
Enter your loan terms and a lease or PPA quote. See the total cost of owning versus third-party ownership over the same time period, and what each path actually gives you.
How it works
Step 1
Use your system cash price, quoted APR, and the term you're considering. The loan payment calculator can help if you want just the ownership side on its own.
Step 2
Use the starting payment, escalator, and contract length from a real proposal, whichever structure you're comparing against. The PPA cost calculator can help build that quote if you're working from usage data instead.
Step 3
Ownership usually wins on pure cost, but also consider home resale value and long-term control over the equipment, both of which favor owning.
The federal residential solar tax credit (Section 25D), which let homeowners who bought or financed a system claim 30% of the cost back, expired for any system installed after December 31, 2025. If you cash-purchase or finance a system today, there's no federal credit to net against the cost, unlike in prior years. See the financing cost with ITC applied tool for more on how this credit used to factor into a loan's total cost. A separate credit for third-party owned systems, discussed below, still applies on the lease and PPA side, so the comparison between owning and TPO looks meaningfully different than it did before this change. The IRS Form 5695 instructions confirm the current eligibility rules directly.
On a $28,000 system financed over 20 years at 6.99% APR, owning costs about $52,060 total with no credit to offset it, compared to roughly $64,772 for a 25-year third-party owned lease, a gap of about $12,712 in favor of owning. That's a real advantage, but it's about $8,400 smaller than it would have been under the old rules, since owning no longer gets any federal credit while the lease still indirectly benefits from one. The cash vs loan savings comparison can help you see how this compares to a straight cash purchase too.
A separate commercial credit (Section 48E) remains available through 2027 to whoever owns the solar equipment, which in a lease or PPA is the financing company, not you. Many providers pass some of that value through as a lower quoted monthly payment or per-kWh rate, so a real lease or PPA quote today may already reflect a lower price than it would without that credit. This is why the gap between owning and TPO has narrowed rather than staying the same or reversing outright, since it depends on how much of the 48E value a specific provider actually passes through in their pricing. The homeowner's guide to solar financing covers lease and PPA structures in more general terms.
A lease or PPA shifts maintenance responsibility to the provider and requires no upfront cost or loan approval, which matters for some homeowners regardless of the tax credit picture. In exchange, you don't build equity in the system and typically add little to no resale value to your home compared to an owned system, a tradeoff that hasn't changed.
Studies from groups like the Lawrence Berkeley National Laboratory have found that owned solar systems tend to add measurable resale value to a home, while third-party owned systems generally show little to no such effect and can occasionally complicate a sale due to the lease transfer or buyout process involved. This finding is unrelated to the tax credit and hasn't changed with the 2026 rules. Rebates and tax credits change what you actually borrow. The rebate stacking tool in our Rebates & Incentives section estimates what you can claim before you sign a loan.
If you don't want to take on a loan, want maintenance handled by someone else, or expect to move within just a few years, a lease or PPA removes those specific frictions, and the cost gap for accepting that tradeoff is now smaller than it used to be. The PPA vs lease comparison can help you pick between the two third-party structures if you land on that path.
Some homeowners start with a lease or PPA and later buy out the system to convert to ownership, which the system buyout value over time calculator estimates the cost of at different points in the contract. Buying out a TPO system doesn't retroactively make you eligible for the expired 25D credit, since that credit no longer exists for any new owned-system expenditure.
Questions
Third-party owned means a leasing or PPA company owns the solar equipment on your roof, and you pay them either a flat monthly fee or a per-kWh rate for the electricity produced. You don't own the panels and typically aren't responsible for maintenance, and the company, not you, is the one that can claim any available federal tax credit.
Financially, owning is often still cheaper, but the gap has narrowed since the homeowner tax credit expired. On a $28,000 system financed over 20 years at 6.99% APR, owning costs about $52,060 with no federal credit to offset it, compared to roughly $64,772 for a 25-year third-party owned lease, a difference of about $12,712, smaller than it would have been under the old rules.
Research from groups like the Lawrence Berkeley National Laboratory has found owned solar systems tend to add resale value, while third-party owned systems generally add little to no measurable value and can sometimes complicate a sale due to the lease transfer process. This finding is unrelated to the tax credit and hasn't changed.
Third-party ownership requires no upfront cost or loan qualification and shifts all maintenance responsibility to the provider, which can be a reasonable fit for someone who doesn't want to take on a loan or plans to move within a few years. The cost gap between the two paths is smaller now than it used to be, which makes this tradeoff more worth considering than before.
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