Key takeaways
- Cash and loans make you the owner. With a lease or a PPA, a solar company owns the panels on your roof.
- $0 down is not free. You still make monthly payments for years, and a smaller utility bill usually remains.
- A PPA charges for every kilowatt-hour (kWh) the panels produce, at a set price that may rise each year.
- The 30% federal tax credit for homeowners is gone for systems installed after December 31, 2025 (IRS).
- Compare total cost, not the monthly payment. Ask every seller for the cash price next to the financed price.
Cash, loan, lease or PPA: how they compare
There are four ways to pay for home solar. They differ in who owns the panels, what you pay each month and what happens when you sell the house.
A PPA (power purchase agreement) bills you for all the power the panels produce (DOE), including power you send back to the grid. Terms vary by lender, company, home and state. No option is best for everyone.
What zero-down solar really means
Zero down, $0 down and no money down all mean the same thing: you pay nothing when the panels go on. You still pay for the system. You just pay over time, usually with interest or a yearly price increase.
With a zero-down loan, you own the panels and repay a lender. With a zero-down lease or PPA, a solar company owns the panels and you pay it under a long contract. Either way, your utility company still sends a bill for fixed charges and for power the panels don’t cover.
Solar paymentUtility bill
In this example, the household pays $61 more each month until the loan is repaid. A lower price, a lower rate or a bigger bill today can turn that into savings. Try your own numbers.
Who qualifies for zero-down solar?
The lender or solar company decides. It looks at your credit and income, your home and roof, and what it offers where you live. There is no single credit score that guarantees approval, and some areas have fewer zero-down offers.
“Free solar” is usually a $0-down lease or PPA. The panels are not free. You pay the company every month instead. Read the truth about free solar panels before you sign.
Solar loan calculator: your new monthly total
Enter a loan offer and your utility bills. The calculator adds the loan payment to the utility bill you would still pay, so you can compare the total with today’s bill.
Example monthly total with solar
$241.40
$61.40 more than today’s bill
- Loan payment
- $201.40
- Utility bill after solar
- $40.00
- Total loan payments
- $48,335.59
- Interest over the loan
- $23,335.59
How this calculator works
It uses the standard formula for a fixed-payment loan: payment = loan × r × (1 + r)n ÷ ((1 + r)n − 1), where r is the yearly interest rate ÷ 12 and n is the number of monthly payments. At 0% it divides the loan evenly over the months.
It is an illustration, not a quote. It leaves out fees you pay upfront, taxes, insurance, maintenance, rising utility rates and changes in solar production. It subtracts no tax credit. It also does not model a lease or PPA. The APR (annual percentage rate) includes some fees, so use it to compare offers, but enter the interest rate here.
Solar loans: look past the interest rate
Many solar loans are arranged by the installer. A low advertised rate can come with a dealer fee: a charge the lender takes out of the loan and adds to your price. The Consumer Financial Protection Bureau found solar loans where the amount borrowed was 30% or more above the cash price (CFPB).
Some solar loans were built around a large extra payment after about a year and a half, often the old federal tax credit. If you don’t make it, the monthly payment goes up. Ask for both payment amounts in dollars.
Compare the installer’s loan with one you find yourself, such as a credit union solar loan, a home equity loan or a personal loan. Rates, fees and the risk to your home differ.
Ask every lender for:
- The cash price next to the amount financed
- The APR and every fee
- The term and the total of all payments
- Every scheduled payment change
- Early payoff rules and any lien (UCC filing) on the panels
Before you sign: contract checklist
Get these answers in writing. Then put two quotes side by side and compare the same lines. The FTC has more questions to ask.
Every offer
- Cash price and price per watt
- Production estimate, and the usage it assumes
- Utility bill after solar, including fixed charges
- Who repairs the equipment and the roof under it
- Which company backs each warranty
- Who receives each rebate or incentive
Leases and PPAs
- Starting payment, or starting price per kWh
- Yearly increase (escalator) and the full schedule
- Total you will pay over the contract
- Production guarantee, if any, and what you get if output falls short
- Transfer rules, buyout price and early exit cost
- What happens when the contract ends
Check options where you live
Offers, utility rules and state programs change from state to state. Our state guides explain free and zero-down solar where you live.
For prices, see the cost of solar panels by state. For rebates and credits, see solar incentives by state.
Compare solar quotes for your home
A useful quote shows the cash price, the financing terms and the numbers behind any savings estimate.
How EcoGen is paid
EcoGen America does not sell or install solar. When you request quotes, we pass your request to solar providers serving your area, and they pay us for the introduction. Providers can include installers, solar marketplaces and lead exchanges, and more than one may contact you. You never pay us.
Solar financing FAQs
Is zero-down solar free?
No. Zero down means you pay nothing upfront. A loan, lease or PPA still means years of payments, and a utility bill usually remains.
What is the difference between a solar loan and a lease?
With a loan, you own the panels and repay the lender. With a lease, a solar company owns the panels and you pay it rent. Ownership affects maintenance, incentives and what happens when you sell.
Can I get a solar loan with bad credit?
Sometimes, but expect fewer offers and higher costs. Each lender sets its own rules, and there is no universal minimum score. Compare the APR and the total of payments before you accept.
What is an escalator clause?
It is a yearly price increase written into a lease or PPA. Ask for the percentage, when it starts and the total you would pay over the contract. Some contracts have no escalator.
Can I still get the 30% federal solar tax credit in 2026?
Not for a new home system. The homeowner credit (Section 25D) ended for systems installed after December 31, 2025 (IRS). State and utility incentives may still apply. Ask a tax professional about your own case.
What happens to my solar contract if I sell my house?
A loan is usually repaid at closing. A lease or PPA usually passes to the buyer if they qualify, or you buy it out. Check the transfer rules in writing before you sign.
Does solar always lower my monthly costs?
No. Add the solar payment to the utility bill you will still get, and compare that total with today’s bill. The calculator above does this for a loan.
Sources
- IRS: changes to the Residential Clean Energy Credit. The end of the homeowner tax credit.
- CFPB: Solar Financing Issue Spotlight (2024). Dealer fees and payment increases in solar loans.
- FTC: Solar Power for Your Home. Questions to ask about leases, PPAs and loans.
- DOE: Homeowner’s Guide to Going Solar. Ownership, total cost and how PPAs bill.
- NYSERDA: Homeowner’s Guide to Solar Leases, Loans and PPAs. Guarantees, transfers and maintenance.
The calculator and the two-bills example are illustrations, not quotes or forecasts.
