Solar lease vs buy calculator
Compare the net savings from buying a rooftop solar system with leasing one over the same period.
In Iowa, buying a 7 kW system at $3.60/W nets about $12,594 over 20 years, versus $2,806 for an example lease at $120/month rising 2% a year (PVWatts production, EIA prices; enter your own offer).
- Buy: net over 20 years
- $12,594pays back in year 14
- Lease: net over 20 years
- $2,806savings minus lease payments
- Buying comes out ahead by
- $9,788
| Year | Bill savings | Lease payments | Buy, cumulative | Lease, cumulative |
|---|---|---|---|---|
| 1 | $1,636 | $1,440 | -$23,564 | $196 |
| 5 | $1,736 | $1,559 | -$16,772 | $934 |
| 10 | $1,869 | $1,721 | -$7,698 | $1,735 |
| 15 | $2,012 | $1,900 | $2,073 | $2,371 |
| 20 | $2,167 | $2,098 | $12,594 | $2,806 |
Formula: yearly savings = production × (1 − output loss)^(year − 1) × value per kWh × (1 + price change)^(year − 1), where value per kWh = share used × retail + share exported × export credit. Buy = total savings − net cost. Lease = total savings − lease payments. Undiscounted; ignores maintenance, inverter replacement, financing and end-of-lease terms.
Inputs used: system: 7 kW, 9,590 kWh in year 1; buy: $3.6/W, credit 0%; lease: $120/month, +2%/yr; retail: 17.06¢/kWh; export: 17.06¢/kWh.
These are estimates, not financial advice.
Source: U.S. Energy Information Administration (Aug 2026). About our data
Production: PVWatts® v8, National Laboratory of the Rockies (U.S. Department of Energy). Installed price default: Berkeley Lab (2025 installs).
Worked examples in three states
| State | Buy, 20 yr net | Lease, 20 yr net | Buy payback year |
|---|---|---|---|
| Hawaii | $36,674 | $26,885 | 9 |
| Alabama | -$7,032 | -$16,820 | beyond term |
| Nevada | -$7,171 | -$16,959 | beyond term |
Exports valued at the state retail price where the DSIRE map shows retail-rate credit, otherwise 0 (conservative). Lease terms are example values.
How we calculate
Each year: savings = production × (1 − output loss)^(year−1) × value per kWh × (1 + price change)^(year−1). Buy = total savings − net cost; lease = total savings − total lease payments. Undiscounted; excludes maintenance, inverter replacement, financing and end-of-lease terms.
Frequently asked questions
Is it better to lease or buy solar panels?
Buying usually produces more savings over the system’s life if you can pay or finance the up-front cost, because you keep all the bill savings. A lease needs no up-front money, but the payments take a share of the savings. The result depends on your offer, your electricity rate and how exports are credited.
Who gets tax credits on a leased system?
The leasing company owns the system and claims any business tax credits; the price of your lease may reflect them. The federal residential credit (25D) does not apply to systems completed after 2025.
What happens at the end of a lease?
Contracts differ: the company may remove the system, offer a renewal, or sell it to you. This calculator stops at the end of the term and does not value what happens next.
Related tools
- Solar payback calculatorYears to pay back a rooftop system, with 2026 federal credit rules.
- Solar panel size calculatorSystem size and panel count to cover your electricity use.
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- Electricity rates by stateLatest residential price per kWh in all 50 states and DC, with trends and rankings.
- Electric bill calculatorEstimate your monthly bill from your usage and your state’s average price.