Four routes
How people actually pay for solar in 2026
There are four ways to get panels on a roof, and since the federal tax credit for buyers ended they no longer stack up the way they used to. Here is each one, what it really costs, and who it suits.
| Route | Upfront | Who owns it | Federal 30% | Suits |
|---|---|---|---|---|
| Lease or PPA | $0 | Finance company | Claimed by the owner, priced into your payment | No capital, limited tax liability, wants maintenance included |
| Prepaid lease | Lump sum | Finance company | Claimed by the owner, discounted off your price | Has capital but no tax liability to use a credit against |
| Solar loan | Usually $0 | You | None | Wants ownership without capital, and will read the dealer fee |
| Cash purchase | Full price | You | None | Has capital, wants the lowest lifetime cost |
What “no upfront cost” means. “No upfront cost” and “$0 down” refer to qualifying solar lease or power purchase agreement (PPA) financing, under which eligible homeowners may have no out-of-pocket cost at the time of installation. Solar panels are not free. Under a lease or PPA a third-party finance company owns the system and the homeowner makes monthly payments, typically over a 20 to 25 year term, often with an annual price escalator. Total payments may exceed the cash price of a comparable system. Eligibility depends on homeownership, credit, roof condition, shading, utility provider, location and other underwriting factors, and is not guaranteed.
Financing, where offered, is provided by third-party lenders on their own terms. Approval is not guaranteed and is subject to credit assessment. Interest, fees, dealer fees and the total amount repayable will be disclosed by the lender and the installer before you sign anything. Solar Funding USA is not a lender, broker or credit intermediary.
FAQs
Financing questions worth asking before you sign
Which financing option is cheapest overall?
Cash, almost always, because you are not paying anyone for the use of their money. What changed in 2026 is the size of the gap. A cash buyer used to get 30 percent back from the federal government and no longer does, while a lease or PPA customer still benefits indirectly because the finance company claims that 30 percent and prices some of it into the monthly payment. Cash is still cheapest over 25 years. It is less far ahead than it was.
Is a lease a bad deal?
It depends entirely on the terms and on the alternative. A lease with a 2.9 percent annual escalator over 25 years can end up costing more than the system is worth, and that is a real risk worth understanding. A fixed-rate lease with no escalator, on a home where the owner has no tax liability to offset anyway, can be the sensible choice. Ask for the total of all payments over the full term, in dollars, before you sign anything. Any company that will not give you that number in writing is telling you something.
What is a dealer fee and why does it matter?
It is a markup the lender charges the installer for offering you a low headline interest rate, which the installer then adds to your system price. The Consumer Financial Protection Bureau found these typically run 10 to 30 percent of the cash price and sometimes above 50 percent, appearing under names like program fee, platform fee or original issue discount. A 3.99 percent loan with a 30 percent dealer fee is more expensive than a 9 percent loan without one. Always compare the cash price against the financed price.
Can I switch or sell the house later?
Leases and PPAs are generally transferable to a buyer, subject to the terms of the agreement and to that buyer qualifying. It does add a step to a sale, and some buyers will want the system removed or bought out. If you expect to move within a few years, raise it before you sign, not after.