For fifteen years the lease-vs-buy question had a boring answer: buy, because the owner collected the 30% federal credit and the lessee didn’t. That logic ended with the credit itself — §25D terminated for installations completed after December 31, 2025. So in 2026 the comparison is genuinely different, in both directions: buying lost its biggest federal perk, and leasing’s remaining perk is expiring under it. Here’s the four-way comparison as it actually stands.

The four structures, one sentence each

• Cash — you own it outright from day one; every kWh of savings is yours from day one.
• Loan — you own it, the bank owns a payment; savings offset the payment from day one.
• Lease — they own the panels, you pay fixed monthly rent for the equipment.
• PPA — they own the panels, you pay a per-kWh rate for what they produce.

The money over 25 years — worked example

Take a 7.74 kW system (18 × 430 W) at $2.80/W = $21,672 gross, in California conditions: ~14,300 kWh/yr, $0.17 effective rate, full retail offset, ~$2,440/yr of bill savings year one.

Cash: $21,672 out, ~$2,440/yr in growing at ~2%/yr net of degradation → payback ~8.5–9 yrs, ~$55–58k net over 25 years. In 2025 the same system netted ~$15,170 after the credit — losing the credit added roughly a year and a half to payback.

Loan ($21,672 at 7% over 15 yrs, ~$195/mo): payments ≈ $2,340/yr vs savings $2,440 — near cash-flow neutral in year one, positive thereafter, and at year 15 the loan ends while the savings continue. Lifetime net lands perhaps $35–42k — the interest ($13k) is the honest cost of not having the cash. Watch “dealer fees” embedded in solar loans: a 20–30% fee inflated into the financed amount turns a good headline APR into a bad deal.

Lease at $160/mo flat (0% escalator): $1,920/yr for ~$2,440 of year-one production value → ~$520/yr net benefit, slowly eroded by degradation. Zero down, zero maintenance responsibility (theirs), and at end of term you own nothing — renewal, removal or buyout is a new negotiation. Lifetime benefit maybe $12–18k vs cash’s $55k+, trading wealth for effortlessness.

PPA at ~$0.12/kWh produced: you pay ~$0.12 for kWh the grid charges ~$0.17 — a locked ~30% discount on solar kWh only, no ownership. Predictable, but escalators apply to the rate and the discount shrinks if grid rates stall.

Where the post-OBBBA twist fits

The one remaining federal incentive lives on the commercial side: §48E still credits third-party-owned solar placed in service by December 31, 2027 — and beyond that only where construction began within 12 months of enactment (~July 4, 2026). So a lease/PPA provider installing your roof before the end of 2027 can still claim the 30% and pass it through as lower payments — subject to FEOC “material assistance” restrictions that complicate post-2025 construction starts. That is a real, dated edge: ask providers in writing whether their price reflects §48E value. Once the placed-in-service cliff passes, leasing returns to competing on convenience alone.

The clauses that decide more than the credit does

• Escalator % — the single most important lease/PPA number. Under ~1.5% is fine at typical utility inflation; 2.9–3.9% escalators quietly invert the deal in the second half of the term. Compute it: payment × 1.029^20 against rate × 1.025^20 — the escalator usually wins, and not in your favor.
• Transfer/buyout — assumption rules when you sell; buyout schedule (fair market value is rarely fair).
• Production guarantee — PPA’s only real advantage: underproduction is their problem. A lease with a strong production guarantee mimics it; without one, shade risk is yours even though the panels aren’t.
• Roof work — removal/reinstall cost for reroofs ($1,500–3,000) lives somewhere; find it before it finds you.
• Who claims SRECs and net metering value — in incentive states, the RECs alone can be worth hundreds a year. If the lease keeps them, that money’s not in your payment comparison.

The honest bottom line

Owning still wins the 25-year math by a factor of three or more — the loss of the homeowner credit shrank the margin, it didn’t flip it. Leasing/PPA earns its place for three profiles: no cash and thin credit; heavy preference for zero responsibility; and temporarily, where a provider’s §48E pass-through pricing (live through end of 2027) undercuts what ownership can do unaided. Run the owned numbers in the calculator above — then demand the lease quote beat them after its escalator, or admit you’re buying convenience with eyes open. Both are defensible; confusing the two is the only losing move.

Frequently asked questions

Does leasing still make sense without the homeowner tax credit?

For one specific reason: the provider's commercial credit survives where yours can't. Third-party-owned solar still qualifies for §48E when placed in service by December 31, 2027 — so a lease/PPA system installed before that cliff can carry ~30% of federal value you can't get buying. The window is real but hard-dated and supply-chain-restricted; lease terms themselves (escalators, transfer clauses) decide the rest.

What's the difference between a solar lease and a PPA?

A lease charges a fixed monthly payment for the equipment regardless of output; a PPA charges a per-kWh rate for power actually produced (so underproduction is the provider's problem, not yours). Both are third-party-owned: the financier owns the panels, you own only the bill reduction.

What is a solar lease escalator clause?

An annual increase baked into your payment — typically 0–3.9%/yr. A 2.9% escalator compounds a $120/mo payment to ~$210 by year 20; if your utility rate rises slower than the escalator, year-20-you is paying more for solar power than for grid power. Compare the escalator to a realistic utility escalation (we default 2.5%) before signing anything.

Does a leased system complicate selling the house?

Yes, materially. Buyers must qualify to assume the lease or you buy out the remainder — either adds friction and cost. Owned systems, by contrast, generally add resale value (studies like Zillow's and LBNL's find a premium), where leased systems are treated as a liability buyers underwrite.

So should I buy cash, loan, or lease in 2026?

Cash wins on lifetime math if you have it — no interest, you keep every incentive dollar that still exists (state credits, SRECs, net metering). Loan wins on access with a modest IRR hit; compare the loan APR against your payback. Lease/PPA wins only when the provider's pricing genuinely reflects §48E credit value (systems placed in service through 2027) or you can't own — and only after you read the escalator and transfer clauses.