Solar & battery
Solar Lease vs Buy Calculator
Compares leasing against buying, where ownership of the incentives is the difference.
Result
Incentives change, expire and differ by state, utility and tax position. Nothing here is tax advice: whether you can use a credit at all depends on your own liability, and a credit is not a rebate. Confirm what applies to you with a tax professional before it affects a purchase decision. A lease or PPA transfers the tax credit to the provider, which is why it is available to people who cannot use a credit themselves. The escalator is the term to read most carefully: a rate that rises 2.9% a year doubles over 25 years, and if utility prices rise more slowly the agreement can end up costing more than the grid.
Get a Free Business AuditHow the calculation works
The total cost of ownership over the period, meaning purchase cost less any incentives the owner can use, against the total of lease or power purchase payments including any annual escalator. The ownership case captures incentives and the system's value; the lease case transfers both to the provider.
What moves the number
- Any incentives and whether the household can use them.
- Lease or power purchase escalator, which compounds.
- Term length and what happens at the end.
- Whether the agreement transfers on sale of the home.
Where this one goes wrong
An escalator compounds, so a payment that starts below the current bill can exceed it later in the term, and the comparison has to run the full term rather than the first year. The transfer provisions matter at least as much: a lease or power purchase agreement attached to the property has to be assumed by a buyer or bought out, and that has complicated home sales. Read the transfer and buyout terms before signing, not when selling.
Before you quote
- Run the comparison over the full term, with the escalator.
- Read the transfer and buyout provisions before signing.
- Check whether the household can actually use any incentive.
Questions
About this calculator
Why does a lease payment rise?
Most agreements include an annual escalator, which compounds. A payment starting below the current bill can exceed it later in the term, which is why the comparison has to run the full term rather than the first year's figures.
What happens when I sell the house?
A lease or power purchase agreement attached to the property generally has to be assumed by the buyer or bought out, and that has complicated plenty of sales. The transfer and buyout terms are worth reading before signing rather than at closing.
Who gets the incentives under a lease?
The provider, since they own the system. That is part of how the payment is set, and it means a household able to use incentives themselves is giving up value by leasing, while one that cannot may be better served by it.
The formula
ownership saving = avoided electricity - net cost; PPA saving = avoided electricity - PPA payments
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How to use this calculator
- Cash price ($). Enter your own figure; the page starts at $21,500.
- Tax credit you can actually use (%). Enter your own figure; the page starts at 30%.
- Annual production (kWh). Enter your own figure; the page starts at 9,200.
- Utility rate per kWh ($). Enter your own figure; the page starts at $0.16.
- Lease or PPA rate per kWh ($). Enter your own figure; the page starts at $0.11.
- Annual PPA escalator (%). Enter your own figure; the page starts at 2.9%.
The result updates as you type, so you can try a figure, see what it does to ownership advantage over 25 years, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Cash price | $21,500 |
| Tax credit you can actually use | 30% |
| Annual production (kWh) | 9,200 |
| Utility rate per kWh | $0.16 |
| Lease or PPA rate per kWh | $0.11 |
| Annual PPA escalator | 2.9% |
| Annual utility price rise | 3% |
What comes out
| Result | Value |
|---|---|
| Ownership advantage over 25 years main result | $19,010 |
| Net cost of buying | $15,050 |
| Savings from owning | $35,133 |
| Total paid under the PPA | $34,060 |
| Savings under the PPA | $16,123 |
Owning comes out $19,010 ahead over 25 years, because the PPA escalator compounds against you while an owned system stops costing anything after payback.
How sensitive the answer is
Holding everything else steady and changing only cash price, this is what happens to ownership advantage over 25 years. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Cash price ($) | Ownership advantage over 25 years |
|---|---|
| $10,750 | $26,535 |
| $16,125 | $22,772 |
| $21,500 example above | $19,010 |
| $32,250 | $11,485 |
| $43,000 | $3,960 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Cash price ($)
- A money amount, starting at $21,500.
- Tax credit you can actually use (%)
- A percentage, between 0 and 60, starting at 30%.
- Annual production (kWh)
- A number, between 0 and 5000000, starting at 9,200.
- Utility rate per kWh ($)
- A money amount, starting at $0.16.
- Lease or PPA rate per kWh ($)
- A money amount, starting at $0.11.
- Annual PPA escalator (%)
- A percentage, between 0 and 10, starting at 2.9%.
- Annual utility price rise (%)
- A percentage, between 0 and 15, starting at 3%.
What the results tell you
| Result | What it is |
|---|---|
| Ownership advantage over 25 years | The headline result. A money figure. |
| Net cost of buying | A money figure. |
| Savings from owning | A money figure. |
| Total paid under the PPA | A money figure. |
| Savings under the PPA | A money figure. |
A design still needs a site visit
Output and sizing figures use the assumptions you enter, not measured irradiance, shading or roof orientation at your address. Real production depends on all three, plus inverter behaviour and local interconnection rules.
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