The decision · after the credit moved
Updated 09 Aug 2026 · Sourced to Public Law 119-21, IRC §25D and §48E
The tax credit is now the whole difference. Buy the system and you own it, but you get no federal credit in 2026. Lease it or sign a PPA and the finance company claims the 30% under Section 48E and prices your payment with that value included — but you do not own the equipment and you may be paying an escalating amount for twenty-five years. Owning is usually cheaper over the long haul; third-party ownership is the only way federal credit value reaches you at all.
Before 2026 this was a close call decided by tax appetite. If you had enough tax liability to absorb a 30% credit, buying usually won. If you did not, a lease or PPA let somebody else use the credit and share the benefit.
That balance broke on 1 January 2026. There is no longer a homeowner credit to absorb. So the question is no longer who can use the credit — it is whether you want the credit at all, or whether you want to own the asset. You now have to pick one. You cannot have both.
| You buy it (cash or loan) | Lease / PPA / prepaid | |
|---|---|---|
| Federal credit in 2026 | None. Section 25D ended 31 Dec 2025. | 30% under Section 48E — claimed by the owner, passed through in your payment. |
| Who owns the equipment | You. | The finance company, typically for 20–25 years. |
| Maintenance and repairs | Yours after the workmanship warranty ends. | Theirs for the term. This is a real, underrated benefit. |
| Monthly cost pattern | Loan payment fixed, then nothing after payoff. | Payment for the whole term, often with an annual escalator. |
| Total cost over 25 years | Usually lower if you stay put. | Usually higher, in exchange for no capital and no maintenance risk. |
| Selling the house | Simple. The system conveys with the property. | The buyer must qualify to assume the agreement, or you buy it out. Plan for this. |
| Adds to home value | Generally yes, as an owned improvement. | Treated as an obligation, not an asset. Effect is mixed. |
| What can go wrong | Payback is longer than it used to be. You carry equipment risk. | Escalator clauses compounding for decades. Read that number first. |
Ask for both structures priced on the same system, on the same page, with a twenty-five-year total for each. Not a monthly payment next to a cash price — those are not comparable numbers and presenting them side by side is the oldest trick in this business.
Specifically ask for: the total you pay over the full term under the lease including every escalation, and the total you pay under the purchase including financing interest. Then compare those two numbers. A company that will not produce that page is telling you something.
The escalator. It is the annual percentage increase built into your payment, and it compounds. A payment that starts comfortably can end up well above what your utility would have charged you. Some agreements have no escalator at all — those exist and you should ask for one. Here is what the difference actually costs over twenty-five years.
It depends on how long you are staying and what you want out of it. Buying costs less over the long run but gets no federal credit in 2026. A lease or PPA is the only way 30% federal value reaches your rooftop now, in exchange for higher lifetime cost and not owning the equipment.
No. A loan-financed system is a system you own, and owned systems get no federal credit in 2026. The credit follows ownership of the equipment, not the payment method.
The buyer generally has to qualify and assume the agreement, or you buy the system out at a contract-defined price. Read the transfer clause before you sign, not when you list.
Effects are mixed. An owned system is generally treated as an improvement. A leased system is an obligation the buyer inherits, which some buyers price against.
With a lease you pay a fixed monthly amount to use the system. With a power purchase agreement you pay per kilowatt-hour the system produces. Both are third-party ownership, so both can pass through Section 48E value.
Tell me where you are and roughly what you pay. I come back with what is actually available in your utility territory, which structure fits, and what to watch for in the paperwork. No rep at your door.
If you sell solar
Every homeowner in your market is confused about the same thing at the same time, and almost nobody is explaining it on camera. Here is the whole argument, and what to do about it →