Buying solar, with cash or a loan, means you own the system and you receive the ownership-based incentives. With a lease or a PPA, a third-party company owns the system, maintains it and bills you, and that owner receives those incentives. A lease is a fixed monthly payment for the equipment, a PPA is a set rate for each kilowatt hour the system produces, and the right choice depends on whether you want to own the system or want $0 upfront with someone else responsible for it.
Rooftop Power is based in Warwick, RI, serves Rhode Island, Massachusetts and Connecticut, and has 4,000+ projects (solar and roofing combined). We install the system under every option below. For a PPA or lease, a third-party partner finances, owns and bills the system. We are rated 4.8 stars on Google and are BBB A+ accredited. This guide explains the differences plainly, including the parts that favor buying and the parts that favor leasing or a PPA.
Solar Lease vs. PPA vs. Buying At A Glance
| Question | Cash Purchase | Solar Loan | PPA | Lease |
|---|---|---|---|---|
| Who owns the system | You | You | Third-party company | Third-party company |
| Who receives ownership-based incentives | You | You | System owner (typically the third-party company) | System owner (typically the third-party company) |
| Upfront cost | Full price paid up front | No money down on approved credit | $0 upfront | $0 upfront |
| What you pay each month | No system payment | Loan payment | A set rate for each kilowatt hour produced | A fixed monthly payment |
| Escalator in the contract | Not applicable | Depends on loan terms | Ask: some agreements step up on a schedule | Ask: some agreements step up on a schedule |
| Selling your home | System stays with the home | System stays with the home; loan is paid off or handled at sale | Transfer to the buyer or a buyout, per the contract | Transfer to the buyer or a buyout, per the contract |
| Maintenance and monitoring | You, with equipment and workmanship warranties | You, with equipment and workmanship warranties | Set by the contract; the provider typically handles it | Set by the contract; the provider typically handles it |
| Roof replacement | You plan and pay for it | You plan and pay for it | Contract decides who handles and pays for panel removal and reinstall | Contract decides who handles and pays for panel removal and reinstall |
| Contract length | None | The loan term | A long-term contract | A long-term contract |
Details vary by provider and by contract. Treat the table as the framework, and get the specifics for your home in writing.
Who Owns The System
Ownership is the first and most important difference, because the rest of the comparison follows from it.
- Cash or loan: you own the system. With a loan you own it while you pay the loan down, and you still own it when the loan is done.
- PPA: a third-party company owns the system on your roof. You buy the power it produces at an agreed rate. You do not own or control the equipment.
- Lease: a third-party company owns the system and you pay a fixed monthly amount to use it. You do not own or control the equipment.
Rooftop Power installs the system under every option. For a PPA or lease, a third-party partner finances, owns and bills the system. We do not finance, own or bill PPA or lease systems ourselves.
Who Gets Which Incentive
Incentives follow ownership. Under a lease or PPA, the system owner, typically the third-party company and not the homeowner, receives ownership-based incentives. Under a cash or loan purchase, you are the owner.
- MA SMART: SMART goes to the system owner. For the 2026 program year, SMART 3.0 pays home systems of 25 kW AC or less a flat $0.03 per kWh generated, or $0.06 per kWh for low-income residential, for 20 years from the incentive payment effective date. Under a lease or PPA, those payments go to the owner, not to you. See our Massachusetts solar incentives page for the details.
- MA state income tax credit: this credit applies to purchased property on a principal residence. It is 15 percent of the net expenditure, up to $1,000, and any excess carries forward for up to 3 succeeding tax years. Confirm your own eligibility with a tax professional.
- MA sales tax exemption: solar equipment used for a principal residence is exempt from the state’s 6.25% sales and use tax.
- MA property tax exemption: a qualifying residential solar system gets a 20 year, 100% exemption on the added property value.
- Net metering: systems of 25 kW AC or less are exempt from the net metering cap allocation in Massachusetts. Ask any provider exactly how net metering credits show up on your bills under their agreement.
Rhode Island and Connecticut have their own programs, which change often. Our Rhode Island solar incentives and Connecticut solar incentives pages explain them, and the tri-state net metering guide covers the shared basics. We confirm current eligibility for your address before you sign anything. Because rules change, ask whoever quotes you where each incentive figure comes from.
Upfront Cost
A cash purchase is paid up front. A solar loan can mean no money down on approved credit, so you borrow the cost and pay it back over the loan term. A PPA or lease can start at $0 upfront, because the third-party owner finances the system.
$0 upfront is not the same as no cost. With a PPA or lease you pay over time through the rate or monthly payment, and you give up ownership and the incentives that come with it. With a loan you pay interest for the money you borrow, and you keep ownership and the incentives.
Monthly Payment And Escalators
- Cash: no system payment, since you paid up front.
- Loan: a loan payment, set by the amount financed, the term and your credit.
- PPA: you pay a set rate for each kilowatt hour the system produces, so your payment moves with production.
- Lease: you pay a fixed monthly amount whatever the system produces.
The most important question on a PPA or lease is whether it has an escalator. An escalator means the rate or payment steps up on a schedule over the contract. Some agreements have one and some do not. Ask for the year one number and the number in every later year, in writing, then compare that full schedule to your current utility bill rather than only the first month. We do not publish payment figures here because they depend on your home, your usage and your provider.
Selling Your Home
A system you own, bought with cash or paid off with a loan, stays with the home. A loan balance is paid off or handled at closing, so ask your lender how.
A lease or PPA is a contract between you and the system owner, and it has to go somewhere when you sell. Many agreements are designed to be transferred to the buyer, who usually has to be approved by the provider, and some allow a buyout. Terms differ, and a buyout is not assured. Read the transfer clause before you sign and ask what happens if the buyer is declined. Brief your agent early, because buyers and their lenders will want to see the paperwork.
Maintenance And Monitoring
If you own the system, maintenance and monitoring are yours to manage, backed by the equipment and workmanship warranties on your paperwork. Ask your installer exactly what each warranty covers and for how long.
Under a lease or PPA, the provider typically handles maintenance and monitoring, but the contract decides. Ask who fixes a problem, how fast, who pays if production falls short, and who is responsible if the system is damaged by weather.
Roof Replacement Interplay
Roof age matters more than most people expect, because panels sit on the roof for a long time. If your roof is near the end of its life, it is usually smarter to address it before or together with solar than to take panels off later.
- If you own the system: you plan and pay for panel removal and reinstall as part of a roof job. Coordinating roofing and solar with one company can simplify this.
- If you lease or sign a PPA: the contract decides who handles panel removal and reinstall, who pays, and what happens to your payment while the panels are off. Get this answered in writing before you sign.
A roof is a real cost, so plan for it. If you are weighing solar with roofing, read how roof replacement with solar in Massachusetts works, and see our roofing services.
Contract Length
A cash purchase has no contract. A loan lasts for its term, then you own the system with no system payment. A lease or PPA is a long-term commitment. Confirm the exact term, what happens at the end (renewal, removal or a purchase option), and what it costs to leave early. A long contract can be a fair trade for $0 upfront, as long as you have read what it commits you to.
Which Option Fits Which Homeowner
- Cash fits homeowners with capital who want ownership and the ownership-based incentives with no financing cost.
- A loan fits homeowners who want ownership and incentives without paying the full price up front, and who are comfortable with a loan payment on approved credit.
- A PPA fits homeowners who want $0 upfront, a payment tied to production and no equipment responsibility, and who accept that the provider owns the system.
- A lease fits homeowners who want $0 upfront and one fixed monthly payment, and who accept that the provider owns the system.
Our solar financing page and our Massachusetts financing options guide go deeper on each path. We will not steer you toward the option that suits us best. The answer for your home depends on your bills, your roof and your plans.
Questions To Ask Before You Sign
- Who owns the system, and who owns the incentives and credits it earns?
- What is the rate or payment in year 1, and in every later year? Is there an escalator?
- How long is the contract, and what happens at the end?
- What happens if I sell? Can the agreement transfer, who approves the buyer, and is there a buyout option and how is it priced?
- Who maintains and monitors the system, and who pays when something fails?
- What happens to the contract if I replace my roof?
- Is there a lien, a fixed charge or a filing against my home?
- Who do I call, and who are they? Is the company that bills me the same one that owns the system?
- What does the written side by side say for my usage, my utility and my address?
Frequently Asked Questions
Is It Better To Lease Or Buy Solar Panels?
Neither is better for everyone. Buying with cash or a loan means you own the system and you, not a third party, receive the ownership-based incentives. A lease or PPA means a third-party company owns the system and bills you, in exchange for $0 upfront and no equipment responsibility. Compare the full written terms for your home before choosing.
What Is The Difference Between A Solar Lease And A PPA?
Under a lease you pay a fixed monthly amount to use equipment someone else owns. Under a PPA you pay a set rate for each kilowatt hour the system produces, so your payment follows production. In both, a third-party company owns the system, and in both you should ask whether the payment or rate escalates over the contract.
Who Gets The Incentives If I Lease Solar Panels Or Sign A PPA?
The system owner, which is typically the third-party company and not the homeowner, receives ownership-based incentives. In Massachusetts, SMART payments go to the system owner. The Massachusetts state income tax credit applies to purchased property on a principal residence, so it is a purchase-side benefit.
What Happens To A Solar Lease Or PPA If I Sell My House?
Many agreements are designed to be transferred to the buyer, who usually has to be approved by the provider, and some allow a buyout. Terms differ by contract, and a buyout is not assured. Ask exactly what your agreement says before you sign. A system you bought with cash, or with a loan you pay off, stays with the home.
Can I Put A New Roof On A House With A Leased Or PPA System?
It takes planning, because the panels usually have to come off and go back on, and the contract decides who handles that and who pays. Ask for the process, the responsibility and any fees in writing before you sign. If your roof is near the end of its life, address it before or together with solar.
Can I Go Solar With $0 Upfront In Rhode Island, Massachusetts Or Connecticut?
Yes. A PPA or lease can start at $0 upfront, and a solar loan can mean no money down on approved credit. A cash purchase is paid up front. Rooftop Power installs the system under every option, and a third-party partner finances, owns and bills PPA and lease systems.
Get The Four Options Side By Side
Send us your recent utility bills and we will put cash, loan, PPA and lease terms next to your actual usage, in writing. You will hear it from us before you sign if the numbers do not work for your roof. Call 401-298-8040 or request a quote.
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