2026 · Four Ways to Pay

How to Pay for Solar

Name: SolarPro Lab
Address: Suffield, CT, US
Telephone: +1-320-361-3953
Price range: Free

Prepaid lease, cash, loan, or standard lease. With Section 25D gone, the math has shifted. Prepaid lease is the strongest 2026 option because the lessor captures the 30% commercial credit and passes the value through to you. Full breakdown on the Incentives page.

Section 25D (residential ITC) expired Dec 31, 2025. Section 48E (commercial) is alive through 2027 for third-party-owned systems.

At a glance

Compare all four side by side

Same questions asked of every option. Scroll right on mobile.

Question	Prepaid LeaseBEST 2026	Cash	Solar Loan (Finance)	Standard Solar Lease
Upfront cost	$10k–$22k (~30% below retail)	$15k–$35k (retail)	$0 down possible	$0
Monthly cost	$0	$0	$80–$220	$60–$180 (escalating)
Federal credit	30% via lessor pass-through	None (25D expired)	None (25D expired)	None to you
Ownership	Lessor yrs 1-5, you yr 6	Yes day one	Yes (with lien)	No
Claims state credits	You (NY 25% still applies)	You	You	Lessor
Lifetime savings	Highest in 2026	High	High	Lowest
Resale impact	Transfers cleanly at year 6	Adds value, simple	Neutral to positive	Can complicate
Maintenance	Lessor years 1-5, you year 6+	Your responsibility	Your responsibility	Lessor

The details

Each option, explained

Prepaid Lease

Best 2026 ROI

One upfront payment, ~30% below retail. The 2026 winner.

You pay a single upfront price to a third-party owner (the lessor), who installs the system and holds title for 5 years to satisfy IRS recapture. The lessor claims the Section 48E commercial ITC (30%) plus MACRS depreciation and passes those tax benefits to you in the form of a discounted lease price (typically 30 to 35% below retail). At the start of year 6, ownership transfers to you for $0 or $1. Same long-term economics as a cash purchase, but at 30%+ less out of pocket.

Upfront

~$10,000 to $22,000 (30 to 35% below retail)

Monthly

$0 after the upfront prepayment

Ownership

Lessor years 1-5, transfers to you year 6

Incentives

30% Section 48E + MACRS, passed through in price

Pros

Captures the 30% Section 48E commercial credit on your behalf
MACRS depreciation also passed through to you, adding 5 to 7% more savings
30 to 35% below retail system price total
No monthly payments after the upfront prepayment
Ownership transfers to you at year 6, typically for $0 or $1
Production guarantee common, so if the system underproduces you're compensated
Available to homeowners with no federal tax appetite (the credit is the lessor's, not yours)

Cons

—Lessor owns the system for 5 years, so early home sale requires the buyer to assume the lease or you to buy it out
—Buyout before year 5 is expensive (greater of FMV or PV of remaining payments at 5%, plus recapture liability)
—Year-6 transfer price depends on contract terms, verify $0 or $1 buyout is in writing rather than 'fair market value'
—Subject to the July 4, 2026 begin-construction deadline for the full 30% rate
—Lessor must use equipment that meets 2026 FEOC cost-ratio rules (40% non-FEOC content)
—If you're income-qualified for the NY 25% state credit, you still keep that on top

Best for: Most CT, NYC, and Long Island homeowners in 2026. Best math right now because cash and loan buyers no longer get any federal credit, and the prepaid lease captures the 30% commercial credit through the lessor.

Cash

Simplest Path

Pay retail upfront. Own day one. No federal credit anymore.

Write a check or wire for the full system cost up front. You own the panels, the inverter, and any battery from day one. In 2026 this no longer comes with a federal tax credit (Section 25D expired Dec 31, 2025). You still claim state and local incentives (NY 25% credit, NYC SEGS abatement, CT ESS battery rebate) where applicable, and every kWh of saved electricity goes straight to you. Cleanest path, but more expensive than a prepaid lease for the same hardware.

Upfront

~$15,000 to $35,000 (full retail)

Monthly

$0 after purchase

Ownership

Yes, full ownership day one

Incentives

State and local credits only (no federal in 2026)

Pros

Highest ownership clarity, no third-party in the picture
Easiest home sale, system adds resale value with no contract to transfer
All state and local incentives go to you directly
Pairs well with NY 25% state credit (max $10,000 in 2026, applies to purchased systems)
No interest, no escalator, no monthly payment ever

Cons

—Pays full retail price, no federal credit anymore
—Roughly 30% more out of pocket than a prepaid lease for the same hardware
—Ties up cash that could earn returns elsewhere
—You're responsible for maintenance, monitoring, and warranty claims

Best for: Homeowners who deeply prefer full ownership from day one, want zero third-party involvement, and have the capital to spare without missing the prepaid-lease discount.

Solar Loan (Finance)

Lowest Upfront Ownership Path

Borrow the retail cost. Pay monthly. Own from day one.

You finance the retail system cost through a solar loan (CT Green Bank Smart-E Loan at 6.99 to 7.99% APR, Mosaic, Sungage, or a personal loan). You own the system from day one, your monthly loan payment replaces most of your old electric bill, and you claim all state and local incentives. Like cash, you no longer get a federal credit on the purchase. Math is similar to cash but spread out over time.

Upfront

$0 down available (with credit approval)

Monthly

~$80 to $220/month, depending on system size and rate

Ownership

Yes, with a lender lien

Incentives

State and local credits only

Pros

Own the system from day one, claim all state and local incentives
$0 down financing available with strong credit
CT Green Bank Smart-E Loans offer competitive rates (some 0% APR options for income-qualified)
Monthly loan payment usually lower than the electric bill it replaces in CT and NY
Resale-friendly, loans can be paid off at closing or assumed by buyer

Cons

—Interest adds 15 to 25% to total cost over the life of the loan
—No federal credit on the purchase (Section 25D expired)
—Pays full retail before financing, ~30% more than the prepaid-lease net price
—Credit check required, terms depend on your credit profile
—Lender holds a lien on the home until paid off

Best for: Homeowners who want ownership from day one but don't have the cash on hand for the upfront prepaid-lease price. The lower monthly bill makes it cash-flow positive in most CT and NY scenarios.

Standard Solar Lease

No-Upfront Option

Monthly lease payments. No upfront cost. Lowest lifetime savings.

A third party owns the panels on your roof. You pay a monthly lease for the electricity they produce, usually with a 1 to 3% annual escalator. The lessor claims the 30% Section 48E credit and MACRS depreciation, but in a monthly lease (vs prepaid), most of those savings stay with the lessor rather than coming to you as a discount. Standard leases are still useful for homeowners without upfront capital or strong credit, but they leave the biggest chunk of savings on the table compared to the prepaid version.

Upfront

Monthly

~$60 to $180/month, with annual escalators

Ownership

No, leasing company owns the panels

Incentives

Captured by the lease provider, not you

Pros

Zero or near-zero upfront cost
No maintenance responsibility, lessor handles repairs and warranties
Predictable monthly payment, usually lower than the current electric bill
Production guarantees common, you're compensated if the system underproduces

Cons

—Lowest lifetime savings of all four options, often $20,000 to $40,000 less than cash or prepaid lease
—You don't own the system, no asset on your balance sheet
—Most leases have 1 to 3% annual escalator clauses, payment grows over time
—Home sale is harder, buyer must assume the lease or you must buy it out
—Locked into a 20 to 25 year contract that's hard to exit cleanly
—No state or local credits, those go to the lessor

Best for: Homeowners who can't pay upfront, don't qualify for a solar loan, and primarily want a lower electric bill rather than long-term ownership or maximum savings. If you can come up with the prepaid-lease upfront amount, that version captures more of the tax savings for you.

Honest answer: yes, and no.

Yes, in the only sense that matters to your wallet on day one. You're not adding a new bill. You're swapping one you already pay every month (the utility bill) for one that's almost always lower, and one that ends.

And no, solar isn't actually free. The system has a real cost. Someone has to pay for the panels, the inverter, the install crew, the permitting. That someone is you, just through a different bucket. You either keep handing money to Eversource, Con Edison, or PSEG for the next 25 years, or you redirect that same money into a system on your roof and own an asset when it's done.

The way to think about it

You're not buying a new expense. You're substituting one bill for a cheaper one that builds equity. In CT and NY, where electricity runs 22 to 35¢ per kWh, a typical solar payment lands 10 to 35% below the utility bill it replaces. Cash flow goes the right direction from month one.

What about SolarPro Lab? You never pay us a dime. We're paid a flat referral fee by installers only after a homeowner picks one. The fee is the same across every installer in our network, so we have no reason to steer you anywhere. Our consultation, quote comparison, and proposal review are free to you out of pocket, period.

Short version: SolarPro Lab is free. Solar is a substitute, not a new cost. In most CT and NY homes, the substitute saves you money from the first bill.

Still not sure which option fits?

We'll run your numbers across all four paths and show you the real-dollar difference on your specific home. Free, no pressure.

Get My Free Assessment