The three ways homeowners pay for solar
There are really only three: pay for the system in cash, borrow the money with a solar loan, or sign a Power Purchase Agreement (PPA) with a third-party financing company. Each option changes who owns the equipment on your roof, who is eligible for tax incentives, and what your monthly cost looks like.
Cash purchase
You pay the full cost of the system up front. You own it outright from day one, keep 100% of the energy value it produces, and you are the party who may claim any federal, state, or utility incentives you personally qualify for. You are also responsible for ongoing maintenance outside of manufacturer warranties. Highest long-term return of the three options if you have the capital and plan to stay in the home.
Solar loan
A lender pays for the system and you repay them in fixed monthly payments over 10–25 years. Because you own the system, the tax and incentive treatment is the same as a cash purchase — you are the party who may claim any incentives you personally qualify for. Your APR, term, and any dealer fees are disclosed by the lender before you sign; those disclosures — not any estimate in a proposal — are the final terms of the loan.
Power Purchase Agreement (PPA)
A PPA is not a purchase and not a loan. A third-party financing company owns the solar (and often battery) equipment installed on your roof. You do not buy the equipment; you buy the electricity it produces, at a per-kWh rate that is typically lower than your utility's rate. There is usually no upfront cost, and the PPA company is responsible for monitoring, repairs, and equipment warranties for the length of the agreement (commonly 20–25 years). Because you do not own the equipment, the PPA company — not you — is the party that may claim the federal tax credit and other ownership-based incentives.
How to choose
If you have the cash and plan to stay long-term, cash wins on total lifetime value. If you want ownership with no money down, a solar loan splits the difference. If you want predictable monthly savings with zero out-of-pocket and no responsibility for equipment, a PPA is hard to beat — as long as you understand that you don't own the system and don't claim the tax credit. SOLITO offers all three and will show you the actual numbers side by side for your home.
Frequently asked
Who owns the solar panels under a PPA?
The PPA financing company owns them. You are paying for the electricity they produce, not the equipment itself.
Can I claim the federal tax credit on a PPA?
No. Because you do not own the equipment under a PPA, the PPA financing company is the party eligible to claim the federal tax credit. On a cash purchase or solar loan you own the system and — subject to your personal tax situation — may be eligible to claim it yourself.
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