Solar Contract Types Explained
A solar lease, a solar loan, and a power purchase agreement (PPA) each work differently. The type you signed decides who owns the panels, how your payment is set, and which rules protect you.
Many homeowners aren’t sure which one they have. The answer is in your agreement, though it’s not always on the first page. Here is a simple breakdown of each type and what to look for.
Lease
Solar Lease
You rent the solar system from a provider. The provider owns the equipment, and you pay a set monthly amount to use it on your roof.
The provider owns the system, not you
Fixed monthly payments, usually for 20 to 25 years
Tax credits go to the provider as the owner
Watch for: a yearly escalator that raises your payment over time
At a glance
Solar Lease
Solar Loan
PPA
Who owns the system
The provider
You
The provider
What you pay for
Set monthly amount
Loan repayments
Electricity per kWh
Typical term
20 to 25 years
10 to 25 years
20 to 25 years
Watch for
Yearly escalator
Dealer fees
Rate escalators, low production
Not sure which one you have?
Send us your agreement, and we’ll tell you which type it is, what it commits you to, and which terms deserve a closer look. It’s free, and there’s no obligation.