Who owns it, and what do you pay for?
A PPA generally means buying energy from a provider-owned system. A lease means paying to use that system. A loan means borrowing to purchase it. Treasury’s consumer guides explain the distinct obligations: Treasury PPA consumer guide (PDF), Treasury solar lease consumer guide (PDF) and Treasury solar purchase and financing guide (PDF).
| Question | PPA | Lease | Solar loan |
|---|---|---|---|
| Who owns the equipment? | The provider | The provider | You purchase the system; the lender may have a security interest. |
| What do you pay for? | Electricity produced, at the contract’s price per kilowatt-hour | Use of the system, under a lease payment schedule | Repayment of borrowed purchase costs, interest and any financed fees |
| Can payments change? | Production changes the bill; a contract escalator may also change the rate. | Check for scheduled increases and other charges. | Check the rate, full schedule and any required prepayment or payment reset. |
| Who handles service? | Check the provider’s maintenance and repair obligations. | Check the provider’s maintenance and repair obligations. | You arrange service, subject to installer and equipment warranties. |
| What happens when you move? | Check transfer, buyer qualification, buyout and termination terms. | Check transfer, buyer qualification, buyout and termination terms. | Check payoff, transfer and any lien requirements. |
Cash ownership is another comparison point: an upfront purchase has no solar-loan interest, but still needs a budget for the system, service and work outside the warranty. Ask for a separate cash price.
Will the payment change?
For a PPA or lease
Find any annual escalator, which is a scheduled price increase. A PPA bill may also vary with production. Check the full term, fees and buyout provisions. You do not automatically own the equipment at the end of either agreement. Treasury PPA consumer guide (PDF); Treasury solar lease consumer guide (PDF).
For a loan
Compare the cash price to the financed amount, then review interest, fees, the repayment term and every payment change. CFPB’s 2024 report identifies markups and loan schedules that increase payments when an expected prepayment is not made. CFPB solar financing report (2024).
For every structure
Keep estimated solar production, household usage and utility-rate assumptions visible. Review a range of outcomes rather than relying on an assumed utility increase or a promise that the electric bill will disappear.
Check the requirements before you apply.
Solar loans involve a lender’s eligibility review. Lease and PPA offers can also require credit screening and qualification of your address, utility and property. Confirm the requirements of the particular offer you are considering. Public provider qualification FAQ.
If credit is your main concern, start with the low-credit guide. If an application was already declined, review the denial before applying again. A different ownership structure does not guarantee a different decision.
The ownership structure alone does not explain the inquiry. Read our solar credit-check guide before you authorize the next step.
Ask about repairs, moving and the end of the contract.
- Who is the installer, the equipment owner and the company you pay?
- What is the full payment schedule, including fees, increases and any required prepayment?
- What utility charges remain, and which production and rate assumptions drive the estimate?
- Who pays for repair, roof access, panel removal and reinstalling the system?
- What happens if production is lower than projected or the provider changes?
- If you sell the home, what must the buyer qualify for and what are your payoff or buyout choices?
- What happens at the end of the term, and what rights to cancel are stated in the agreement?
Get a copy of the proposal and agreement that you can keep. Take time to read it before deciding whether the payments, ownership terms and service responsibilities fit your plans for the home.
Put two offers on the same page.
Ask each company to fill in the same details: the cash and financed prices, every payment change, utility charges, service responsibilities and what happens when you move. Keep an unanswered question visible until you have the terms in writing.
Download the comparison worksheetFree PDF · Two pages · Fill it in with a compatible PDF reader or print it. No signup needed. Keep your completed copy for yourself; this worksheet does not send your answers to Iterum.
Common questions
- Does a solar PPA require a credit check?
- It can. A provider may screen credit as well as the property, utility and service area. Ask about the actual offer’s requirements and whether the next step involves a soft or hard inquiry before authorizing it.
- Can I get a solar lease with bad credit?
- That depends on the provider’s current requirements and your property. A lease changes who owns the panels; it does not automatically remove credit screening. Confirm the requirements for your address and compare the complete payment schedule before applying.
- Is a solar PPA better than a loan?
- It depends on what you want and the actual terms. A PPA buys electricity from a provider-owned system; a loan finances panels you purchase. Compare the payment schedule, remaining utility charges, repair responsibilities and what happens when you sell the home.
- Is a PPA the same as a solar lease?
- No. The provider generally owns the system in both cases, but you pay for different things. A PPA charges for electricity produced; a lease charges for using the equipment. Both can include scheduled price increases or other fees.
- Will a PPA or lease eliminate my utility bill?
- You may still buy electricity from the utility and pay fixed charges. Add the solar payment to the utility bill you expect to keep paying. Whether you save depends on the system’s production, your usage, rates and the contract.