SOLAR EXIT GUIDE
Understanding the differences between solar leases, PPAs, and loans is critical — especially when it comes to your exit options. This comprehensive guide compares all three financing types on cost, ownership, flexibility, and what happens when you want out.
Published March 28, 2026 · Not legal advice · Our methodology
How you financed your solar system — lease, PPA, or loan — fundamentally shapes your rights, your costs, and your options for getting out. Based on our research, many homeowners don't fully understand the differences until they want to sell their home, cancel their contract, or resolve a dispute. This guide breaks down each financing type so you can make informed decisions about your solar situation.
In This Guide
Before diving into details, here's the fundamental distinction between the three most common solar financing options:
A solar lease is essentially a rental agreement for solar equipment. You pay a fixed monthly amount to use solar panels installed on your roof, and the leasing company retains ownership of the equipment throughout the contract term.
A power purchase agreement (PPA) is similar to a lease, but instead of paying a fixed rental amount, you pay for the electricity the system produces at an agreed-upon rate per kilowatt-hour.
Read our complete Solar PPA Exit Guide →
With a solar loan, you borrow money to purchase the solar system. You own the equipment from day one, and the loan is simply the financing mechanism — similar to a car loan or home improvement loan.
Watch Out for Dealer Fees: Many solar loans include substantial dealer fees (sometimes called "origination fees" or "channel fees") of 15-30% that are built into the loan amount. A $30,000 system might result in a $39,000 loan. Always ask about dealer fees before signing. Learn about common solar sales deceptions →
Not sure about your solar financing options? Get a free contract review to understand your situation and explore exit strategies.
Here's how solar leases, PPAs, and loans compare across the factors that matter most:
| Factor | Solar Lease | Solar PPA | Solar Loan |
|---|---|---|---|
| Ownership | Company owns | Company owns | You own |
| Upfront cost | $0-$1,000 | $0-$1,000 | $0-$5,000+ |
| Monthly payment | Fixed (+ escalator) | Variable by production | Fixed |
| Contract length | 20-25 years | 20-25 years | 10-25 years |
| Federal tax credit | Company claims | Company claims | You claim (30%) |
| Maintenance | Company handles | Company handles | Your responsibility |
| Escalator clause | Common (1-3%/yr) | Common (1-3%/yr) | No |
| Home sale impact | High (transfer req.) | High (transfer req.) | Low (pay off loan) |
| Exit difficulty | Hard | Hard | Moderate |
| UCC lien | Yes | Yes | Sometimes |
| Total 25-yr cost | $30K-$60K+ | $25K-$55K+ | $25K-$50K |
Your exit options vary dramatically based on your financing type. Here's what's generally available for each:
Complete Solar PPA Exit Guide →
Complete guide: How to get out of a solar panel contract →
Escalator clauses are one of the biggest hidden costs in solar leases and PPAs, and they're a primary reason homeowners want out of their contracts.
An escalator clause increases your payment by a fixed percentage each year. While 2-3% may sound small, compounding over 20-25 years creates significant increases:
| Starting Payment | Escalator | Year 10 | Year 20 | Year 25 |
|---|---|---|---|---|
| $150/month | 2.0% | $183 | $223 | $246 |
| $150/month | 2.9% | $199 | $264 | $305 |
| $200/month | 2.9% | $265 | $352 | $407 |
The problem arises when escalated solar payments exceed utility rates. If utility rates increase more slowly than your escalator, you could end up paying more for solar electricity than you would from the grid — defeating the entire purpose of going solar.
Read our complete guide to solar escalator clauses →
How solar financing affects your home sale is one of the most important considerations — and one that many homeowners don't learn about until they're already under contract.
When selling a home with a leased or PPA solar system, you typically have three options:
With a solar loan, you simply pay off the remaining loan balance at closing (from your sale proceeds). The buyer gets the home with a fully owned solar system, which typically adds value. No transfer or credit qualification required.
Complete guide: Selling a home with solar panels →
We do not advise homeowners to stop making payments or breach contractual obligations. Even if you're unhappy with your solar financing arrangement, continue making payments while exploring your legal options. Consult a qualified attorney about your specific situation.
There's no universal "best" option — it depends on your priorities and circumstances. Here's a general framework based on our research:
Pro Tip: Before signing any solar agreement, calculate the total cost over the full contract term including any escalator clauses. Compare this to what you'd pay for grid electricity over the same period. If the solar option isn't significantly cheaper, the financial benefit may not justify the long-term commitment. Use our solar buyout calculator →
If you're already locked into a solar financing agreement and want help getting out, some companies specialize in solar contract exits. See our review of the best solar cancellation companies →
Ownership Disclosure: SolarPanelExit.com and TRU Solar Cancellation share common ownership. TRU Solar Cancellation offers a Solar Exit Document Package for a one-time $450 fee. TRU is not a law firm and does not provide legal advice. See our full ownership disclosure for details.
With a solar lease, you pay a fixed monthly amount to rent the solar equipment regardless of how much energy it produces. With a power purchase agreement (PPA), you pay a per-kilowatt-hour rate for the electricity the system actually generates. Both typically last 20-25 years, and in both cases, the solar company owns the equipment on your roof.
A solar loan generally provides more flexibility and long-term value because you own the system and can benefit from tax credits, increased home value, and eventual free electricity after the loan is paid off. However, loans require credit qualification and make you responsible for maintenance. Leases offer lower upfront commitment but typically cost more over the full contract term. Results vary by individual situation.
Solar loans are generally the easiest to exit because you can pay off the remaining balance at any time, and there's typically no early termination penalty beyond the outstanding principal. Solar leases and PPAs are typically the hardest to exit because they involve long-term contracts with early termination fees that can be substantial. Learn more →
Many solar leases and PPAs include annual escalator clauses that increase your payment by 1-3% per year. Over a 25-year contract, a 2.9% annual escalator can nearly double your initial payment. Not all leases have escalators — some offer fixed rates. Always check for escalator clauses before signing. Learn more about escalator clauses →
Yes, but it can complicate the sale. The buyer must typically either assume the lease (which requires credit qualification) or you must buy out the remaining lease before closing. Some buyers are unwilling to take on a solar lease obligation, which may narrow your buyer pool. Learn more about selling with solar →
With a solar lease or PPA, the solar company owns the equipment throughout the contract term. With a solar loan, you own the equipment from day one (the loan is just financing). With a cash purchase, you own the equipment outright. Ownership affects your tax credit eligibility, maintenance responsibility, and exit options.
Get a free contract review to understand your financing terms, exit options, and next steps.
Disclaimer: This article is for informational purposes only and is not legal advice. Solar financing terms and consumer protections vary by state and contract. Results vary by individual situation. We do not advise homeowners to stop making payments or breach contractual obligations. SolarPanelExit.com and TRU Solar Cancellation share common ownership. Consult a qualified attorney before taking action regarding your solar contract. See our Ownership Disclosure, Advertiser Disclosure, and Methodology.