What buying solar looks like in 2026
Buying means you pay for the system, with cash or a solar loan, and you keep every dollar it saves for its 25-plus-year life. That is still the highest-savings option. The change is that the 30% federal residential tax credit (Section 25D) expired for systems placed in service after December 31, 2025, so a homeowner who buys in 2026 no longer gets that credit. Payback periods are longer as a result, often in the low-to-mid teens of years rather than 8 to 12.
Buying makes the most sense if you can pay cash or get a low-interest loan, you plan to stay in the home long enough to pass payback, and your electricity is expensive. Size the system to your actual usage with the solar panel calculator so you do not overpay for capacity you will not use. State, local, and utility incentives may still apply, so check those before assuming there is nothing.
How leases and PPAs work now
With a lease or a power purchase agreement (PPA), a solar company owns the panels on your roof. In a lease you pay a fixed monthly amount; in a PPA you pay per kilowatt-hour the system produces. Both are usually little or nothing down. Because the company owns the system as a business, it can still claim the commercial clean-energy credit, which runs through 2027, and competition can push some of that benefit into the rate it offers you.
The trade is that you save less than owning, because you are paying the owner for the power instead of generating it for free. Watch two things closely: the annual escalator, a clause that raises your payment a few percent every year, and the transfer terms, since a buyer of your home will have to assume the agreement or you will have to buy it out.
The catch with each
Buying ties up capital or adds a loan payment, you are on the hook for any maintenance, and in 2026 you do it without the federal credit. Leasing avoids the upfront cost and the maintenance worry, but it delivers the smallest lifetime savings, can complicate a home sale, and an aggressive escalator can erode the savings over time.
If you cannot use a tax credit anyway, for example because you have little tax liability, that old advantage of owning matters less, which narrows the gap. Run your own numbers with the solar panel calculator, then compare a real lease quote against a real purchase quote over the full term.
Buy wins on
- +Highest lifetime savings by a wide margin.
- +You own the system; no monthly payment after payback.
- +Adds clean resale value and transfers simply.
Lease / PPA wins on
- +Little or no upfront cost.
- +Maintenance and repairs are the owner's problem.
- +Still a path to a federal credit through the system's owner.
The verdict
If you can pay cash or get a low-rate solar loan and you will stay in the home, buying still wins on lifetime savings, even without the federal credit it now lacks. Choose a lease or PPA if you want solar with no upfront cost and less responsibility, or if you could not use a tax credit anyway, but read the escalator and home-sale transfer terms carefully before signing. Either way, size it to your usage first with the solar panel calculator and compare real quotes over the full term.
Related: Solar panel calculator, Best solar generators.
Frequently asked questions
Did the solar tax credit go away?
The federal residential clean energy credit (Section 25D), worth 30% of the cost of an owned system, expired for systems placed in service after December 31, 2025. Homeowners who buy a system in 2026 no longer receive it. The commercial credit that solar companies use for leased and PPA systems continues through 2027, which is why third-party-owned solar is now the main route to a federal credit.
Is it better to lease or buy solar panels?
Buying gives the highest lifetime savings and is the better choice if you can finance it and plan to stay in the home, even though owners no longer get the federal tax credit in 2026. A lease or PPA is better if you want solar with no upfront cost and no maintenance responsibility, or if you have too little tax liability to have used a credit anyway. Compare real quotes over the full term.
Can you still get a solar tax credit in 2026?
Not as a homeowner who buys your own system; the 30% residential credit ended for systems placed in service after December 31, 2025. You can still benefit indirectly through a lease or PPA, where the company that owns the panels claims the commercial credit (available through 2027) and may pass some of it into your rate. State, local, and utility incentives may also still be available.
What happens to a solar lease when you sell your home?
The lease or PPA does not automatically go away. Your buyer typically must qualify and agree to assume the agreement for the rest of its term, or you must buy out the remaining balance before closing. This can complicate or slow a sale, so factor it in if you might move, and keep the transfer terms handy.
How long does it take to pay off solar in 2026?
For an owned system without the federal credit, payback is commonly in the low-to-mid teens of years, depending on your install cost, electricity rate, and sun. With the old 30% credit it was often 8 to 12 years. Higher electricity rates and stronger sun shorten it; cheap power and weak sun lengthen it. Use the calculator to estimate yours.