Solar Lease vs Buy Calculator
A solar lease vs buy calculator compares net purchase cost with total lease payments: a $20,000 system with a $6,000 incentive saves $22,000 over 20 years.
A solar lease vs buy calculator compares two numbers over the same period: what it costs to buy the system after incentives, and what you pay in total on a lease. Net purchase cost is system price minus incentive. Total lease cost is monthly payment × 12 × years.
The formula in plain words
Buying is one big payment, reduced by any tax credit or incentive you can claim. Leasing is a smaller payment every month for the length of the contract.
To compare them fairly, add up everything you would pay on each path over the same stretch of time. The calculator subtracts the incentive from the purchase price, multiplies the lease payment by the number of months, and shows which total is lower and by how much.
Worked examples
Example 1, the default: a $20,000 system, a $6,000 incentive, a $150 monthly lease, 20 years.
- Net cost to buy: 20,000 − 6,000 = $14,000
- Total lease: 150 × 12 × 20 = $36,000
- Buying saves: 36,000 − 14,000 = $22,000
Example 2, a shorter lease on a bigger system: $24,000 system, $7,200 incentive, $130 per month, 15 years.
- Net cost to buy: 24,000 − 7,200 = $16,800
- Total lease: 130 × 12 × 15 = $23,400
- Buying saves: $6,600
How long until buying breaks even with leasing? In example 1, the lease costs 150 × 12 = $1,800 a year. The $14,000 purchase equals 14,000 ÷ 1,800 = 7.8 years of those payments. After that, every lease payment is money you would not have spent as an owner.
Lease totals by payment and term
| Monthly payment | Term | Total lease |
|---|---|---|
| $100 | 20 years | $24,000 |
| $130 | 15 years | $23,400 |
| $150 | 20 years | $36,000 |
| $150 | 25 years | $45,000 |
| $200 | 20 years | $48,000 |
What the calculator leaves out
The comparison covers raw cost. Several real-world items sit outside it:
- Electricity savings. Both paths produce power, so this cancels in many cases, but a lease may charge more or less than the power it offsets.
- Escalators. Some leases raise the payment each year.
- Loan interest. If you finance the purchase, add the interest to the buy side.
- Maintenance and repairs. A lease may cover these, while an owner pays after warranty.
- Home sale. A buyer may need to take over a lease, and owned panels may add to the value of the home.
- Roof work. Panels have to come off and go back on if the roof needs replacing.
How to compare your own quotes
Get the full purchase price and the exact terms of the lease in writing. Read how the payment changes each year, what happens at the end of the term, and who is responsible for removal. Enter the purchase price, the incentive you can really claim, the monthly payment, and the term.
Ask a tax professional about the incentive. The amount depends on your tax situation and current law.
Common mistakes
- Counting an incentive you cannot claim, or one that exceeds your tax bill.
- Comparing a 20-year lease with a 10-year loan without matching the periods.
- Ignoring the escalator, which can add thousands over the term.
- Leaving out the cost of the roof, panels removal, or battery.
- Comparing system sizes that differ. Match them first.
Questions to ask each seller
Before you enter numbers, ask the lease company for the escalator, the buyout price, who handles removal and roof repairs, and what happens if you sell the house. Ask the installer selling the purchase for the warranty on panels, inverter, and workmanship, and how production is monitored. Written answers make the comparison more honest.
Reading the result
The bottom line of the calculator is the gap between the two totals. A big gap in favor of buying, like the $22,000 in the default case, suggests that buying is worth a closer look, but it does not account for how you pay. If you cannot pay up front, a loan changes the numbers, and a lease may still make sense for you. Rerun the calculation with the loan’s total cost in place of the purchase price.
Related calculators
To size the system, use the solar panel calculator. The solar battery calculator adds storage, the solar panel angle calculator helps with tilt, and the electricity cost calculator shows what the power you use costs today.
Frequently asked questions
Is it cheaper to buy or lease solar panels?
On raw cost, buying usually wins over a long term, but it depends on your quotes. With a $14,000 net purchase and a $150 monthly lease for 20 years, the lease totals $36,000, so buying saves $22,000. Buying pays for itself against the lease payments in about 7.8 years.
Do I get the federal solar tax credit if I lease?
Generally no. The leasing company owns the system, so it usually claims the tax credit, not you. Tax rules change, so confirm the current credit and your eligibility with a tax professional before you decide.
What does a solar lease usually include that buying doesn't?
Leases often bundle maintenance, monitoring, and a production guarantee into the monthly payment, and they ask for little or nothing up front. When you buy, you carry repairs and replacement parts yourself, though equipment usually carries a manufacturer warranty.
Does this calculator account for financing interest or electricity rate changes?
No. It treats the lease payment as flat for the whole term and ignores loan interest, annual payment increases, panel output decline, and what you would save on your power bill. If your lease has a yearly escalator, the true lease total is higher than shown.
What lease term and payment should I enter?
Use the figures from the quotes you have. A 25-year term at $150 a month totals $45,000, which is $31,000 more than the $14,000 net purchase. A shorter 15-year lease at $130 a month on a $24,000 system with a $7,200 incentive totals $23,400 against $16,800, a $6,600 gap.
Estimates only. Verify quantities with your supplier before purchasing.