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Post-Tax-Credit Solar ROI: Cash vs Loan vs Lease

Same roof, three ways to pay. See which financing route leaves you with the most money after 25 years — and who keeps the tax credit under each option.

System & financing

Under a lease/PPA the installer claims the credit, not you.

The 30% federal residential credit (25D) ended Dec 31, 2025 — leave 0 for new systems; set 30 only if your system qualified earlier.

Best net profit over 25 yearsCash — $87,653Loan payment at defaults: $222/month. Total bill savings (all options): $111,653.
Comparison (25 years)
OptionUpfrontTotal paidNet profitIRRPayback
Cash ★$24,000$24,000$87,65314.9%Year 8
Loan$0$40,047$71,606—Cash-flow positive: Year 1
Lease$0$77,726$33,927—Cash-flow positive: Year 1
IRR is shown only when the option has an upfront outlay; $0-down options show —. Payback is the first year cumulative cash flow reaches $0; $0-down options show the first cash-flow-positive year instead. Loan total paid is net of the year-1 tax credit, so Net profit = Total savings − Total paid holds for every row.

How it works

Cash pays the net cost (gross minus credit) up front. A loan finances gross minus down payment at the stated rate, and the credit is treated as a year-1 cash inflow applied against the loan. A lease has no upfront cost and no credit for you — the installer keeps it — but the monthly payment escalates every year. Yearly bill savings equal self-consumed solar × import rate plus exported solar × export rate, escalated annually.

Assumptions & sources

  • Assumes household consumption covers all self-consumed solar; savings = self-consumed × import rate + exported × export rate.
  • Loan payments use standard amortisation; dealer fees, origination fees and prepayment rules are excluded — real loan quotes vary.
  • Loan total paid is shown net of the year-1 tax credit, so Net profit = Total savings − Total paid holds for every row.
  • Lease is modelled over the full 25 years with no buyout; an end-of-term buyout would change the lease total.
  • Production, rates and escalators are held to the stated paths; panel degradation and inverter replacement are excluded.
  • Estimates only — not a financing offer. Confirm credit eligibility and loan terms with your installer and lender.

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