A Lease or PPA Sold as a "Purchase" or "Program"
You're going solar with no money down. The system is yours, you just make monthly payments like any other home improvement.
What's actually true
In a lease or power purchase agreement (PPA), the company owns the panels. You rent the equipment or buy its power for 20 to 25 years. That affects who gets tax credits, what happens when you sell your house, and who fixes the system.
Some homeowners believe they bought their solar system, then find out years later, often when selling their home, that they signed a lease or a power purchase agreement. In both, a company owns the panels on your roof. Leases and PPAs can be reasonable choices, especially in 2026. But you need to know which one you’re signing, because ownership changes almost everything else.
Lease, PPA, loan, cash: who owns what
| Who owns the panels | What you pay | Federal tax credit in 2026 | |
|---|---|---|---|
| Cash | You | Full price up front | $0 (25D ended after 2025) |
| Loan | You (lender may hold a lien) | Loan payments | $0 |
| Lease | The company | Fixed monthly rent, often with a yearly escalator | Company may claim 48E |
| PPA | The company | A price per kWh produced, often with an escalator | Company may claim 48E |
Why this is happening more now
With the homeowner credit gone, companies that can still claim the business credit (Section 48E) have shifted toward leases and PPAs. EnergySage reported that the share of its installers quoting third-party ownership jumped from about 14% to about 41% in six months in 2026. LBNL found third-party ownership reached 40% of home systems in 2025.
That shift can benefit you. EnergySage found prepaid leases about 39% cheaper per kWh than cash in H1 2026, partly because the company’s credit is passed through in price. But it also means more people are being sold a lease with words like “purchase,” “program” or “your system.”
Why salespeople blur it
“Own your power” sells better than “rent equipment for 25 years.” Ownership also implies you’ll get the home value bump, warranties and freedom to sell, which don’t apply the same way to leases. See home value claims and easy lease transfers.
A worked example
A lease at $150 a month with a 2.9% yearly escalator for 25 years totals about $64,800. At the end, the company may offer to remove the panels, renew the lease or sell them to you. You never owned them. A cash purchase of the same 8 kW system at $3.00 per watt would be $24,000, with no federal credit in 2026. The lease might still make sense if you lack cash or can’t get a fair loan, but these are different products.
How it shows up in the contract
- Titles like “Residential Solar Lease,” “Solar Power Purchase Agreement” or “Solar Service Agreement”
- “Provider retains title to the System”
- A per-kWh rate, a monthly fee, and an annual escalator percentage
- A UCC-1 fixture filing, which is a public notice that the company owns equipment on your property
- A buyout schedule or “purchase option”
Questions to ask
- “Who will own the panels on day one, and at the end of the contract?”
- “Is this a lease, a PPA or a loan? What does the contract call it?”
- “Will you file a UCC-1 on my home?”
- “Does my price assume you receive the 48E credit? What happens if you don’t?”
- “What are my options when the term ends?”
What to do next
Compare all four paths with the lease vs. buy tool and compare options. Our guides on lease vs. buy vs. PPA vs. loan and whether a solar lease is a bad idea give an honest view of when renting wins.
Bottom line: A lease isn’t a scam. Being told a lease is a purchase is.
Where to report it
- Your state attorney general’s consumer protection office
- FTC: reportfraud.ftc.gov
- Your state contractor licensing board
Related red flags
Lease and PPA Escalator Clauses
Escalators of 2.9% to 3.9% a year nearly double or more than double your payment over 25 years. If utility rates rise more slowly than your escalator, your solar price can end up higher than buying from the utility.
"Transferring the Lease Is Easy When You Sell"
A lease transfer usually requires the buyer to apply and pass a credit check with the solar company. Some buyers don't want the payment, and the UCC-1 filing can raise questions with mortgage lenders. If the transfer fails, you may have to buy out the lease or pay to move the system.
"Free Solar" and "Government Solar Programs"
No federal or state program installs free panels door to door. "Free" or "no-cost" almost always means a $0-down lease, PPA or loan with 20 to 25 years of payments.
Quotes That Subtract the 30% Federal Tax Credit in 2026
The Section 25D homeowner credit does not apply to systems whose installation was completed after December 31, 2025. If you buy with cash or a loan in 2026, your federal credit is $0.
"Solar Adds 4% to Your Home's Value"
The two studies usually cited are from 2015 and 2019, and both cover owned systems. Premiums likely shrink as install prices fall. Leased systems usually add no value and can make a sale harder. Loans generally must be paid off at closing.