When it comes to getting a solar panel system installed on your roof, there are many decisions to be made – including tough financial decisions. For some homeowners, the ability to finance a system may not be possible. This is where solar leases and Power Purchase Agreements (PPAs) come into play. These are two options available to homeowners who are looking to save on their electricity bills by switching to solar without carrying the full financial burden of financing or paying off their own solar system. Under both a solar lease and solar PPA, the homeowner themselves will not own the actual solar energy installation placed onto their roof. Instead, a PPA or lease company has true ownership over the system. While very similar, PPAs and leases have some very distinct differences between them. Selecting the right one for your project is important!
Breaking Down Your Solar Options
Solar leases – Under this type of agreement, a homeowner doesn’t own any of the equipment installed on their roof or connected to their home. They will still have the same interaction with their utility company in terms of buying and selling electricity (i.e. net metering), just as someone who actually owned their solar panels would. A homeowner can expect to pay monthly rent throughout the terms of the agreement, which can range from around 20 to 25 years.
Solar PPAs – Under this type of agreement, the homeowner doesn’t own the equipment or even make any leasing payments. Instead, the PPA company comes in and installs their solar panel system on the house and actually sells the homeowner the electricity produced by the panels for a negotiated rate. With a PPA, the homeowner can either opt to pay for only the electricity they actually end up using or a fixed monthly amount, depending on the agreement details. Similarly to a lease, the agreements tend to run up to 25 years.
The specifics of the agreements can vary based on homeowner preference. For example, a contractor may offer zero down, free installation, a down payment, prepaid leases, varying kW sizes, and other factors.
Make the Best Solar Choice for Your Needs
So what’s the better option, a solar lease or PPA? At the end of the day, it comes down to what makes the most sense for your particular situation. You may prefer to not have a lease payment and be able to negotiate on the pricing of your electricity with a PPA or like the flexibility of leasing panels while buying / selling the electricity produced by it. The last option available to homeowners is financing or paying cash. For those that are able to, this is the most financially beneficial, as the homeowner will typically be able to pay offer the system in 12 or less years. Still, both solar leases and PPA agreement are viable options for those that want to benefit from the perks of solar without all the upfront costs.
*On approved credit. 30 percent based on eligibility; consult your tax advisor. No hard credit pull. **Must be an active SDCP residential customers and must have contract dated 09/30/25 or after to qualify. Entire battery system must be a new system and must be discharging 50% or more of your battery during the required peak times. Batteries must be fully charged by on-site solar. Battery cannot simultaneously be participating in any other active demand response programs. All projects are subject to a sizing tool to determine if there will be enough excess solar to charge the proposed battery system. Must purchase $15,000 or more to qualify. †Tesla Powerwall 3 must be purchased between 11/01/25-03/31/26. Must register for the rebate through the Tesla rebate portal by 03/31/26 to qualify. ‡Savings based on size of roof. Cool Roof upgrade with roof replacement only. μPresent this at the time of your appointment. §Unlimited referrals accepted. Maximum awarded amount per new customer is $550 for referrals that purchase. Referral name must be supplied by referrer, referral amount paid after completion of the installation and payment.
For all offers: Cannot be combined with any other offers. New customers only, some restrictions apply. See here for more information on warranties. Semper Solaris is the fastest of installers that installed 10,000+kW in the 12 months prior according to the most recent Ohm Analytics California Monthly Report. Offer Expires 02/28/26
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