When deciding how to go solar, homeowners often face a big choice: lease the panels or own them. For those who already have a solar lease, another question eventually comes up — should I buy out my lease or ride it out to the end?
[Originally published on February 18, 2022, | Updated on August 21, 2025]
If you opt to sell your home before the lease ends, you have two options: buy out the lease and transfer full ownership to the buyer, or transfer the lease to them. In the latter case, the buyer must agree to take over the payments and also qualify financially with the leasing company.
Staying in a Solar Lease: Pros and Cons
Pros
- No upfront cost
Leasing makes it possible to go solar without the large installation expense.
- Maintenance included
The leasing company typically manages system monitoring, warranty service, and repairs for the entire lease term. In effect, this can extend coverage beyond manufacturer warranties—for example, a 10-year inverter or battery warranty may be covered for the full 20-year lease.
- Predictable monthly payments
You know exactly what you owe each month, which can be comforting in a time of rising utility rates.
- Protection from utility inflation
Even with annual escalators, properly designed lease payments will still end up lower than utility rates 10–15 years into the agreement. According to the Arizona Corporation Commission, Arizona residential electricity rates rose by approximately 1.7% from May 2024 to May 2025. The US Energy Information Administration reports that over longer periods, Arizona generally sees annual increases in the 2–3% range
Cons
- No ownership benefits
You don’t qualify for solar tax credits or incentives under a lease, and you also miss out on the added home equity that comes with ownership. By buying out the system, you not only make the transfer process to a new owner far simpler, but you can also factor the system’s added value directly into your selling price.
- Lower lifetime savings
Compared to ownership, leasing typically offers a lower long-term ROI. However, this is balanced by no upfront installation costs and included maintenance throughout the lease.
- Complications when selling your home
Buyers are often hesitant to assume a solar lease, even if the payments are low. Some lenders also add hurdles to more complicated transactions involving leased systems. This is where an early buyout option can be most helpful.
- Escalator clauses
If your lease includes annual payment increases, your solar bill may rise over time. Be sure to compare the escalator rate with the national average utility increase of 2–3% per year to see if your payments could eventually approach your regular utility costs.
- Industry instability
Some leasing companies have gone out of business, leaving customers uncertain about service and warranty coverage. It’s important to know that your provider is financially stable.
Buying Out a Solar Lease: Pros and Cons
Pros
- Boosts home value
Homes with owned solar generally sell faster and at higher values than those with leased solar.
- Easer transfer at sale:
If you decide to sell your home before the lease term is up, you’ll generally have two paths: you can pay off the lease and pass full ownership of the system to the buyer, or you can transfer the lease itself. For a transfer, the buyer must be willing to assume the payments and meet the leasing company’s credit requirements.
- System additions:
It’s much easier to add panels or a battery to a system you own. This flexibility is valuable if you plan to add a room, hot tub, pool, or electric vehicle. With a lease, expansion options are far more limited.
- Simplicity long-term
Owning avoids concerns about lease extensions, system removal, or transfer complications.
Cons
- High upfront buyout cost
Depending on your system and contract, a buyout can be expensive.
- Financing challenges
Financing is often required, adding interest expense. Still, many homeowners find the monthly loan payment is comparable to — or less than — lease payments, with the added benefit of building equity.
- System age matters
If you buy out late in the lease, the panels may already be 10–15 years old, with less production left ahead.
- Complicated process
If the leasing company is financially unstable, arranging a buyout can be more difficult.
Key Market Considerations
Whether you’re evaluating a new lease or considering buying out an existing one, keep these current factors in mind:
- Utility rates are rising: Across much of the U.S., electricity costs are climbing. Ownership offsets a bigger bill, making the economics of owning stronger.
- Solar incentives evolve: Federal, state, and local incentives change over time, but ownership almost always provides greater access to them compared to leasing.
- Industry stability: Before signing a lease or buying out, research the financial health of the leasing company. Bankruptcies have created real challenges for lease customers.
A Framework for Deciding
Whether you’re considering buying out an existing lease or entering a new one with a future buyout option, here’s a simple decision process to help guide your choice:
- How much time is left on your lease?
- Less than 5 years left: Staying may be fine if payments are low, but a buyout could help with resale value if you plan to sell your home.
- 10+ years left: Buying out may deliver stronger long-term savings.
- Are you planning to sell your home soon?
- Yes: Owned systems are easier to market and transfer to a new owner. Plus and owned system will boost resale value, a leased system will not.
- No: Staying might make sense if you’re comfortable with the payments. You continue to benefit from clean solar energy at a predictable rate and all maintenance is covered through the lease term.
- What’s the buyout cost vs. total remaining lease payments?
- Sometimes buying out actually costs less than completing the lease. Look at how many lease payments are remaining, then look at the optional buyout price. Consider maintenance costs associated with ownership as well.
- How stable is the leasing company?
- If stability is uncertain, owning may provide more peace of mind. Always check whether a leasing company is stable, with strong customer service reviews, a solid track record of honoring contracts, and no recent signs of bankruptcy or legal troubles. Publicly available financial reports or long-term backing from a major utility or bank can also indicate stability.
A Case Study Example
Imagine you signed a 20-year solar lease in 2016 for a 10 kW system. Your monthly payment is $100 with a 3% annual escalator. You now have 11 years left.
- If you stay in the lease: Over the next 11 years, you’ll pay about $15,500 total, with payments rising to ~$135/month by the end. You’ll save compared to utilities, but less as the escalator adds up.
- If you buy out today: The leasing company offers a buyout at $20,000. If you purchase, you may qualify for available solar incentives, lowering your effective cost. From then on, all savings are yours. Assuming $1,800/year in avoided utility bills, you’d break even in ~8 years, with another decade of panel life remaining. Plus, your home’s resale value improves immediately.
Conclusion
Leasing solar can be a good option for homeowners who want predictable costs and zero maintenance responsibilities. But leasing also comes with trade-offs: fewer incentives, possible escalators, and potential hurdles if you move.
Buying out a lease puts you in full control. It requires more upfront cost but can unlock incentives, maximize savings, and increase property value.
For homeowners who already have a lease, the choice between buying out and staying depends on your timeline, your finances, and the terms of your contract. For those considering a lease today, weigh it carefully against ownership to make sure it fits your long-term goals.
Either way, the best decision comes from understanding the fine print, comparing numbers, and planning around your unique circumstances.