Solar Lease vs. Loan vs. PPA: How to Get Out of Each
Your exit options depend on what kind of solar agreement you signed. Many homeowners aren't sure, especially if the sale happened quickly on a tablet. Here's how to tell and what each type means if you want out.
| Lease | Power purchase agreement (PPA) | Loan | |
|---|---|---|---|
| Who owns the panels | The solar company | The solar company | You |
| What you pay | A monthly rent for the system | A price for each kWh it produces | Monthly loan payments |
| Federal tax credit | Goes to the company | Goes to the company | Only for systems installed by the end of 2025, if you qualified |
| Annual increases | Common (escalator) | Common (escalator) | Usually fixed, but can re-amortize |
| Typical term | 20 to 25 years | 20 to 25 years | 10 to 25 years |
How to tell which you have
Check the first page of your agreement and who you send payments to. A lease or PPA comes from the solar company and talks about “the system” being owned by them. A loan comes from a lender (sometimes a different company than the installer) and has a Truth in Lending disclosure with an APR, finance charge and total of payments.
Getting out of a lease or PPA
- Cancel within your cooling-off period, if it hasn't passed (your right to cancel).
- Buy the system or prepay the remaining payments, using the buyout terms in your contract.
- Transfer the agreement to a buyer when you sell your home.
- Negotiate removal or a release if the system was installed badly or doesn't perform as promised.
- Pursue a claim if you were misled about the terms.
Getting out of a solar loan
- Pay it off early, by refinancing or at a home sale. Check for prepayment terms.
- If your loan assumed you'd make a lump-sum paydown with a tax credit, check the deadline and whether you actually qualified, so the payment doesn't jump by surprise. See what changed with the solar tax credit.
- Check federal lending rights if the loan is secured by your home and disclosures weren't given.
- Pursue a claim if the salesperson misrepresented the loan, your savings or your tax credit eligibility. Some claims can affect the loan as well as the installer.
For the full list of options, read how to cancel a solar contract, and if your payments rise every year, see solar escalator clauses.
Related guides
- Signs you were misled
- Solar not saving money
- The solar tax credit in 2026
- Selling a house with solar
- All guides
This guide is general information, not legal advice. Laws change and vary by state. Talk to a licensed attorney in your state about your situation.