Solar financing comparison guide
Compare solar ownership, a PPA, and a lease using the actual contract terms
A purchase, power purchase agreement, and lease charge for solar in different ways. Comparing only the first payment can hide rate escalators, fixed utility charges, financing interest, and obligations that remain when you sell the home.
Use proposal-specific production, payment, and escalation values. The calculator keeps the utility-only path visible so you can test whether any solar offer saves money under the same assumptions.
How to use this tool
Start with twelve months of utility bills
Add annual kWh, the current energy rate, fixed charges, and the export-credit rule.
Use the same production estimate
Hold solar output constant across offers unless the proposed system sizes differ.
Copy each contract escalator
Enter the annual PPA rate increase and lease payment increase exactly as quoted.
Test your expected time in the home
Change the comparison period and review transfer, payoff, and buyout terms outside the numeric model.
Why ownership can look expensive early
A purchased system has an upfront price and possibly loan interest, while a PPA and lease spread charges over time. Ownership may cross below third-party options only after several years. The residual-value input is optional because resale benefits vary by property and market.
Contract details the calculator cannot decide
- Whether the agreement transfers to a home buyer
- Early termination, removal, or system buyout prices
- Production guarantees and service-response terms
- Roof replacement responsibility and insurance requirements
This is a contract-comparison estimate. Availability of PPAs, net metering, incentives, tax treatment, and transfer rules depends on location and contract terms. Review the full proposal and current rules before signing.
Sources and further reading
- FTC: Solar Power for Your Home — Questions to ask about purchases, leases, PPAs, escalators, maintenance, and home sales.
- U.S. Department of Energy: Homeowner’s Guide to Solar — Solar ownership and third-party financing basics.
Frequently asked questions
What is the difference between a solar PPA and a lease?
A PPA generally charges for each kWh the system produces. A lease generally charges a fixed monthly amount for use of the equipment. Either contract may include an annual escalator.
Who receives solar incentives?
With third-party ownership, the system owner generally receives available ownership incentives. For a purchase, enter only credits or rebates that your tax adviser or program administrator confirms you can use.
Why is my fixed utility charge still included?
Solar production may reduce energy purchases without eliminating account, delivery, demand, or other fixed charges on the utility bill.