Solar Purchase vs. Solar Lease vs. PPA: Which Is Best for You?

by | May 15, 2025 | Solar Buying

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Power House Home Energy | Long Island, NY

If you’re considering a solar panel installation on Long Island, one of the biggest decisions you’ll face is how to pay for your system. Homeowners have three main options: buying solar panels outright, leasing them, or entering into a power purchase agreement (PPA). Each approach has its own pros and cons, depending on your financial situation and long-term goals.

Option 01: Purchasing Solar Panels (Cash and Financing)

Best for: Homeowners who want maximum savings and long-term financial benefits.

When you purchase a solar system outright with cash or a solar loan, you own the system and benefit from all available incentives, including tax credits and rebates.

Pros:

  • Highest Long-term Savings – Solar owners save 40–70% more on electricity costs over the system’s lifetime compared to leasing or PPAs.
  • Qualifies for Incentives – You can claim the 30% federal tax credit, NY-Sun rebates, and any available state/local incentives.
  • Increases Home Value – Studies show homes with owned solar systems sell for more than those without solar.
  • No Monthly Payments (If Paid in Cash) – Once your system is paid off, your electricity is virtually free.

Who Should Buy a Solar Panel Installation?

  • Homeowners who plan to stay in their home for 10+ years.
  • Those who want the highest return on investment (ROI).
  • Anyone who wants to take advantage of tax credits and rebates.
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Option 2: Solar Lease

Best for: Homeowners who want solar with no upfront costs and don’t mind lower savings.

With a solar lease, you don’t buy solar panels. You rent them from lease-based Long Island solar companies. Instead of paying for the electricity itself, you pay a monthly fee to use the solar system, no matter how much energy it produces.

Pros

  • No Upfront Cost.
  • No Maintenance Responsibilities.
  • Lower Electricity Bills.

Cons

  • You don’t own the system and won’t qualify for tax credits and rebates.
  • Lower Long-Term Savings – Leases reduce electricity costs, but savings are lower compared to ownership.
  • Potential for Escalating Payments – Many leases have annual price increases, reducing future savings.
  • Can Complicate Home Sales – Buyers must agree to take over the lease.

Who Should Lease?

  • Homeowners who don’t qualify for solar loans or can’t afford upfront costs.
  • Homeowners who aren’t eligible for Tax Credits.
  • Homeowners who plan to move in a few years and don’t want a long-term commitment.

Option 3: Power Purchase Agreement (PPA)

Best for: Homeowners who want no upfront costs but prefer a pay-for-use model.

A PPA is similar to a lease, but instead of a fixed monthly fee, you pay for the electricity the solar panels produce at a reduced rate.

Pros

  • $0 Upfront Cost – No need to pay for the panels or installation.
  • Lower Electricity Bills – Electricity is purchased below the utility company rate.
  • No Maintenance Costs – PPA-based Long Island solar companies handle maintenance.

Cons

  • No Ownership Benefits – You don’t qualify for tax credits or incentives.
  • Savings are Lower than Purchasing – While you’ll pay less for electricity, you won’t see the full financial benefits of ownership.
  • Rates May Increase – Some PPAs have annual rate increases, reducing long-term savings.
  • Selling Your Home Can be Harder – Buyers must agree to take over the PPA.

Who Should Get a PPA?

  • Homeowners who want to save money but don’t want to own the system.
  • People who don’t qualify for tax credits or solar loans.
  • Those who prefer a “pay-as-you-go” approach to solar energy.

Comparison Table: Purchase vs. Lease vs. PPA

Feature Purchase (Cash/Loan) Lease PPA
Upfront Cost System Cost (or $0 with loan) $0 $0
Ownership Yes No No
Monthly Payments None (if paid in full) or loan payment. Fixed or increased lease payment. Pay per kWh used.
Tax Credits & Rebates Federal 30% + NYS (25%, $5,000 max) No No
Savings Over 25 Years Highest Moderate Moderate
Maintenance Responsibility Solar Company (Warranty) Solar Company Solar Company
Home Value Increase Yes No No
Best For Long-term savings & tax benefits. No upfront cost, lower savings. No upfront cost, pay-per-use model.

Which Long Island Solar Installation Option Is Best for You?

  • Purchase a solar panel installation if you want maximum savings and investment benefits with tax credits.
  • Lease solar if you need a solution with no upfront cost and don’t care about ownership.
  • Choose a PPA if you want a lower rate and can’t take out a solar loan.

Any of these options will reduce your electricity spending, but purchasing a solar panel installation offers the best savings with a true return on investment.

Get a Free Solar Consultation with Power House Home Energy

At Power House Home Energy, we offer cost-efficient solar panel installations for you to own outright. You will gain all the practical and financial benefits. Contact us for a free energy evaluation and learn how we can make purchasing solar panels work for you.