Solar Lease vs Buy Calculator

Choose comparable solar offers

Start with proposals for comparable equipment and expected generation. An inexpensive lease covering a smaller system is not directly comparable with a cash quote for a larger array. If the designs differ, enter each design’s generation separately and review what causes the difference.

For a purchase, enter the cash price, immediate incentives, maintenance and replacement assumptions. If you finance the purchase, use the disclosed principal, down payment, fees, note rate and term. For a lease, enter the upfront charge, monthly payment, annual increase and contract length.

A power purchase agreement, or PPA, charges for generated energy rather than a fixed monthly rental amount. Enter its starting price per kilowatt-hour and price escalator. Solar United Neighbors’ contract guide explains why payment structure, production protections and ownership terms deserve separate review.

Continue with Solar Payback Calculator or Solar Battery Payback Calculator for the next calculation.

Put utility savings on the same basis

For each proposal, split expected generation between electricity used in your home and electricity exported. Value self-used electricity at the avoided purchase price. Value exports only at the compensation you expect to receive under that contract and utility arrangement.

Keep grid connection charges that continue after installation out of the savings figure. Add any new recurring charges. The Department of Energy’s homeowner guide notes that export arrangements depend on utility and local rules; do not assume every exported unit receives the full retail price.

Use the same assumptions about electricity-price changes and production decline where the designs justify them. A contract escalator is an agreed price change. A future utility-price increase is a scenario, and the calculator labels them differently.

How the comparison works

For cash ownership, the model subtracts the purchase cost at the start, then adds each year’s electricity benefit and subtracts maintenance, replacements and extra charges. Confirmed later incentives are added when expected.

For a lease, each year’s cost is the starting monthly payment multiplied by 12 and increased by the contractual annual escalator. For a PPA, annual cost is that year’s generation multiplied by the applicable PPA rate. Your agreement determines who receives export credits and pays for maintenance.

The comparison reports net savings relative to buying all the modeled electricity from the utility. Discounted results apply your selected discount rate to future cash flows. A zero discount rate makes the discounted result equal the undiscounted result.

Worked example: cash ownership versus a lease

Consider an illustrative 20-year comparison with $1,800 of annual electricity benefit, no generation decline or tariff change, and no incentives.

The purchase costs $18,000 and has $100 annual maintenance. Its modeled net savings are:

$36,000 electricity benefit − $18,000 purchase − $2,000 maintenance = $16,000.

The lease starts at $100 monthly and increases 2% each year. Total lease payments over 20 years are approximately $29,156.84. With the same $36,000 electricity benefit and no other lease charges, modeled net savings are $6,843.16.

Ownership is ahead by $9,156.84 in this scenario. This does not establish a universal winner: different prices, maintenance, loan terms or contract increases can change the result. No resale value or home-price increase is assumed.

Check the end of your comparison period

Choose a horizon that does not extend beyond an unmodeled contract end. If a financed purchase still has a loan balance, include that balance as a terminal liability so a short horizon does not hide unpaid debt. Include a documented lease buyout or exit payment when your chosen scenario requires it.

Keep any estimated system resale value separate and set it to zero unless you intentionally enter a supported scenario. A prospective buyer’s willingness to assume a lease cannot be calculated from monthly payment alone.

Do not subtract the former homeowner federal solar credit from a new 2026 purchase. The IRS instructions document its end after 2025. Any provider tax benefit must already be reflected in the offer you compare; it is not an additional homeowner cash receipt.

Model the financed purchase first

When the purchase offer is financed, first use the Solar Loan Calculator to reconcile cash price, down payment, financed fees, note rate, term, and any documented extra-payment scenario. Carry the resulting loan cash flows into this lease-versus-buy comparison instead of treating a low down payment as the purchase cost.

Inputs, outputs and result meaning

Calculates lease Payments, owner Net, lease Net, and owner Advantage from cash Price, annual Benefit, annual Owner Maintenance, and lease Month1 with visible method, validation, precision, sources, and limitations.

Inputs

Cash Price

Supported units include entered unit. The supported range is -1,000,000,000 through 1,000,000,000. This field is optional.

Annual Benefit

Supported units include entered unit. The supported range is -1,000,000,000 through 1,000,000,000. This field is optional.

Annual Owner Maintenance

Supported units include entered unit. The supported range is -1,000,000,000 through 1,000,000,000. This field is optional.

Lease Month1

Supported units include entered unit. The supported range is -1,000,000,000 through 1,000,000,000. This field is optional.

Lease Escalator

Supported units include entered unit. The supported range is -1,000,000,000 through 1,000,000,000. This field is optional.

Horizon

Supported units include entered unit. The supported range is -1,000,000,000 through 1,000,000,000. This field is optional.

Discount

Supported units include entered unit. The supported range is -1,000,000,000 through 1,000,000,000. This field is optional.

Outputs

Lease Payments

This is the primary result. It is formatted as currency using the calculator’s selected or declared currency context. The visible result uses up to 2 decimal places according to the output rule.

Owner Net

It is formatted as currency using the calculator’s selected or declared currency context. The visible result uses up to 2 decimal places according to the output rule.

Lease Net

It is formatted as currency using the calculator’s selected or declared currency context. The visible result uses up to 2 decimal places according to the output rule.

Owner Advantage

It is formatted as currency using the calculator’s selected or declared currency context. The visible result uses up to 2 decimal places according to the output rule.

The calculator validates and normalizes the labeled inputs before applying the documented calculation model. Keep the result label, unit, selected mode, cited-source date and stated limitations with the answer.

Frequently asked questions