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Four structures, and the difference between them is not really the monthly payment — it is who owns the system and what happens when you move.
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The financing decision matters as much as the equipment decision, and it is made faster and with less information. The single question underneath all four options is whether you end up owning the system. Ownership decides who claims the incentives, who carries the maintenance, and how difficult the house is to sell.
The question underneath all four is whether you end up owning the system. Ownership decides who claims any incentive, who carries maintenance, and how straightforward the house is to sell. The table summarises that; the cards below it give the detail.
| Option | Who owns it | Upfront cost | Who claims an incentive | Payment escalates | Selling the house |
|---|---|---|---|---|---|
| Cash | You, from day one | Highest | You, if any applies | No | Transfers with the house |
| Loan | You, subject to the lender’s claim | Low or none | You, if any applies | No, but interest and a dealer fee apply | Repay, or the buyer assumes it; any UCC-1 must be cleared or subordinated |
| Lease | A third party | Low or none | The third-party owner | Commonly, annually | The buyer must qualify and assume it, or you buy it out |
| Power purchase agreement | A third party | Low or none | The third-party owner | Commonly, annually | The buyer assumes it, or it is settled at closing |
You own it outright from day one.
You own it. The lender has a claim until it is repaid.
A third party owns the equipment. You rent it.
A third party owns the system. You buy the electricity it makes.
The dealer fee is the most consequential number in a financed solar deal and the least disclosed.
On a financed system, the installer commonly pays the lender a fee so that a below-market interest rate can be offered. That fee is recovered by raising the price of the system, and it is financed along with everything else. So a quote advertising a very low rate may carry a cash price materially above what the same system costs paid outright.
The test is simple: ask for the cash price and the financed price as two separate numbers. If they differ, the gap is the fee. Our dealer fee calculator solves for the rate you are actually paying against the true cash price, and what "zero down" really means covers the pattern.
Most leases and PPAs raise your payment by a fixed percentage every year, often for twenty years or more.
The pitch is that utility rates rise faster, so you stay ahead. That may hold. It may not — and a contract with a fixed escalator has no mechanism for the case where it does not. Run the rate out to year fifteen and twenty and compare it against what you pay your utility today, rather than against a projection supplied by the company selling it.
The escalator calculator does that, and lease vs buy compares the two paths over the full term.
Many solar loans are secured against the equipment with a UCC-1 financing statement. That is normal and not sinister, but it appears in a title search and a buyer's lender will want it resolved.
It is not a problem if you know about it months before you list, and it is an expensive scramble if you discover it a week before closing. UCC-1 liens on solar loans and selling with a loan or lease set out what has to be cleared.
Incentives that attach to the owner of the equipment go to whoever owns it. Under a lease or a PPA, that is the third party rather than you.
This matters more now than it used to. Section 25D, the residential federal credit, was terminated for expenditures made after 31 December 2025, while the business credit behind third-party-owned systems runs on a different timetable. Why a lease still gets a credit and you do not explains the split, and solar incentives covers all four layers.
A fee paid to the lender by the installer to offer a below-market interest rate, recovered by raising the cash price of the system. It is built into the amount financed and is rarely shown as its own line. The headline rate looks attractive; the effective rate against the true cash price is higher.
It depends on whether you can use the incentives that attach to ownership and on how long you plan to stay. Ownership carries the better long-run economics for most households who can use the benefits; a lease or PPA moves the upfront cost and the maintenance obligation to someone else, at the price of not owning the asset.
A term that raises your lease payment or PPA rate by a fixed percentage every year, commonly for twenty years or more. It is sold on the assumption that utility rates will rise faster. Model what the rate becomes in year fifteen and twenty before signing, because that assumption may not hold.
Yes, but the financing structure determines how easily. An owned system transfers with the house. A loan with a UCC-1 filing, a lease or a PPA each have to be paid off, subordinated or assumed by the buyer before closing, and any of those can complicate a sale.
Substantially. Incentives that attach to the owner of the equipment go to the third party under a lease or PPA, not to you. Whether any of that value is reflected in your rate depends entirely on the terms you sign.
HyreSolar does not finance solar systems, originate loans, or broker leases or power purchase agreements, and nothing here is financial or tax advice. Terms vary by lender, by state and by individual circumstances. Confirm anything you intend to rely on with a qualified professional before signing.