Four ways to pay for solar, what each really costs over 25 years, and an honest account of which federal and state incentives still exist in 2026.
Every Mr. Legit Solar proposal prices all four. This is the comparison we walk customers through.
| Cash | Solar loan | Lease | PPA | |
|---|---|---|---|---|
| Upfront cost | Full system price | $0 typical | $0 | $0 |
| Who owns it | You | You | The provider | The provider |
| Lowest 25-year cost | Yes | Second | Third | Usually highest |
| Maintenance responsibility | You (we cover workmanship 25 yrs) | You (same) | Provider | Provider |
| Adds appraised home value | Typically | Typically | No | No |
| Complicates a home sale | No | Only if unpaid at closing | Sometimes | Sometimes |
| Escalator risk | None | None (fixed rate) | Check the clause | Check the clause |
| Best for | Capital available, longest horizon | Ownership without upfront cash | No tax appetite, wants simplicity | Wants a lower rate per kWh with no responsibility |
The lowest lifetime cost, full stop, because you skip both interest and the dealer fee that subsidizes low-rate solar loans. Payback for a typical Arizona or Nevada system runs 8–12 years at current rates, after which the electricity is effectively free for another decade or more.
Worth comparing against what that capital earns elsewhere. If your money is in a 5% instrument, the calculation is closer than it looks.
$0 down, terms of 10, 15, 20 or 25 years, secured or unsecured depending on the lender. You own the system, so you keep the asset and any incentive available to owners. The key thing to understand: the advertised rate is subsidized by a dealer fee that raises the system price by roughly 10–30%.
Ask any installer, including us, for the cash price and the financed price on the same design. If they won't show both, that tells you something.
A fixed monthly payment for the use of a system somebody else owns and maintains. Genuinely useful if you have no tax liability to offset, don't want maintenance responsibility, or can't qualify for a loan. Your savings are the gap between the lease payment and your old bill.
Read the escalator and the transfer clause. A 2.9% annual escalator over 25 years nearly doubles your payment.
You buy the electricity the system produces at a fixed rate per kWh, typically 10–30% below your utility. No upfront cost, no maintenance obligation. Because a business owns the system, federal credits available to businesses can be reflected in your rate.
The risk is the same escalator problem. If your PPA escalates faster than your utility does, savings shrink and can invert.
Incentive programs change, run out of funding, and get amended mid-year. We verify every one of these at proposal time for your specific address and utility.
The §25D Residential Clean Energy Credit expired for systems placed in service after 31 December 2025. There is currently no direct federal tax credit for a homeowner who buys their own system in 2026.
The §48E clean electricity investment credit may still apply to systems owned by a business, including the provider in a lease or PPA. Eligibility depends on placed-in-service timing, domestic content and prevailing wage rules. Your CPA should confirm.
New Mexico and Arizona both offer state income tax credits for residential solar, subject to caps. Colorado and Texas have no statewide credit but meaningful utility programs. We check current caps and funding at proposal.
NV Energy's storage incentive, California's SGIP, and per-watt rebates from several Colorado utilities are the significant ones in our territory. Most are first-come, first-served against an annual budget.
Most of our states exempt the added home value from property tax assessment and exempt the equipment from sales tax. These are quiet but real, often worth more than a headline rebate over 25 years.
Not an incentive exactly, but the biggest single variable in your return. Full retail net metering, a reduced export rate, or a net-billing tariff like California's NEM 3.0 can swing payback by years.
Not for homeowners buying their own system. The Residential Clean Energy Credit under Internal Revenue Code Section 25D, the 30% credit most people mean, was terminated for property placed in service after 31 December 2025 by legislation enacted in 2025. If your system was energized in 2025 or earlier, you may still be able to claim it on the return for that year.
Two things remain relevant in 2026: businesses may still qualify for the clean electricity investment credit under Section 48E, subject to placed-in-service, wage and domestic content rules; and third-party owned residential systems (leases and PPAs) are owned by a business, so the value can flow through to your rate rather than to your tax return. We model whichever applies to you, and we are not tax advisers, so please confirm with your CPA before relying on any of it.
Most of our lending partners look for 640 and up, with the best rates above 720. Below 640 the options narrow quickly and the dealer fees baked into the rate get expensive, often to the point where a lease or PPA genuinely serves you better. We'll tell you when that's the case rather than pushing a loan that eats your savings.
Yes, and every honest installer should explain it. Low-rate solar loans are subsidized by a fee the lender charges the installer, typically 10–30% of the financed amount, which is folded into the system price. A 2.99% loan and a cash price are not the same deal. Our proposals show the cash price and the financed price separately so you can see exactly what the low rate costs.
Both are third-party ownership: you don't own the system, you pay for the power or the equipment. A lease is a fixed monthly payment; a PPA is a rate per kWh produced. They're a reasonable fit if you have no tax appetite, want zero maintenance responsibility, or can't finance a purchase. Watch two things: the annual escalator (anything above about 2% erodes your savings fast) and the transfer terms if you sell the house.
All of the lenders we work with allow prepayment without penalty, and many customers do exactly that , particularly those who used a loan for cash flow and then paid it down from savings. Confirm the prepayment terms in your specific loan documents; we highlight them in the proposal.
They change often, so we check them at proposal time rather than quoting from memory. As of 2026 the landscape looks roughly like this: New Mexico has a state income tax credit for solar; Nevada has a storage incentive through NV Energy; several Colorado utilities offer per-watt rebates; Arizona has a modest state tax credit and a sales tax exemption; Texas incentives are utility-specific and vary enormously; California's main lever is the SGIP storage incentive for qualifying customers. Property tax exemptions for the added home value exist in most of our states.
We’ll price your system as cash, loan, lease and PPA, show the 25-year cost of each, and tell you which one we would choose in your situation and why.
Your project is reviewed by a person, not routed to a lead marketplace.