Now that there's no blanket 30% federal credit for homeowner-owned systems, how you pay for solar matters more than it used to. The three paths — cash, lease, and PPA — lead to genuinely different outcomes. Here's who each one is actually right for.
Cash (or a solar loan): you own everything
You buy the system outright or finance it with a loan. You own the panels, the production, and every incentive attached to them.
- Best for: homeowners who want maximum lifetime savings and the home-value bump that comes with owned solar, and who have the tax appetite to use state credits.
- What you get: in NJ, you keep the SREC-II income. In SC, you claim the 25% state tax credit yourself. You also build equity rather than renting your roof to a financier.
- The catch in 2026: there's no longer a federal credit to offset the upfront cost, so the payback leans on state programs, bill savings, and rising rates. Loans spread the cost but add interest.
Lease: low/no money down, someone else owns it
A financing company installs and owns the system on your roof. You pay a fixed monthly amount to use the power it makes.
- Best for: homeowners who want solar with little upfront cost and zero maintenance responsibility, and who can't use tax credits anyway.
- What you get: because the company owns the system, it claims the commercial 48E credit and typically passes that value through as a lower payment — which is how lease/PPA customers still benefit from a federal credit indirectly in 2026.
- The trade-offs: you don't own the system, you don't claim the incentives (the owner keeps the SREC-II/state credit), you build no equity, and you'll need to transfer or buy out the agreement when you sell the home.
PPA: pay per kilowatt-hour, not a flat fee
A PPA (power-purchase agreement) is close cousin to a lease, with one difference: instead of a fixed monthly payment, you pay a set rate per kWh the system produces — ideally below your utility's rate.
- Best for: the same no-upfront-cost crowd as a lease, who prefer paying only for power actually generated.
- Watch for: the annual "escalator" — many PPAs raise the per-kWh price a few percent each year. If it climbs faster than utility rates, your savings shrink over time. Always check the escalator before signing.
How we help you choose
There's no universally "best" option — it depends on your tax situation, how long you'll stay in the home, and whether you value ownership or simplicity. We'll run your actual numbers under each path and show you the real difference, with no steering toward whichever pays us more. That's the assessment.
Key takeaways
- Cash/loan = you own the panels, the SREC-II income, and the SC state credit, and build home equity.
- Lease/PPA = a third party owns the system, claims the 48E credit, and passes value through as lower payments.
- With a lease/PPA you don't own the incentives or build equity, and you must transfer/buy out the deal when selling.
- Watch the PPA escalator — if the per-kWh price rises faster than utility rates, savings shrink.