I’m Done Being Polite About Solar Leases
If you’ve read this blog before, you know I call a spade a spade. I don’t sugarcoat things for the sake of industry politics, and I don’t hedge my opinions to avoid making someone uncomfortable. So here it is, plain as I can make it: if you sign a solar lease in 2026, you are making one of the worst financial decisions available to you as a homeowner. Full stop.
Other solar professionals are dancing around this. They’ll say things like “leases can work for some people” or “it depends on your situation.” They won’t come out and say what they actually think, because they don’t want to sound like they’re crying sour grapes over lost sales, and they definitely don’t want to piss off the lending partners and finance companies they rely on for business. I get it. But I’m not beholden to any of those relationships, and I think homeowners deserve the truth without the diplomatic packaging.
So let me say what everybody in this industry already knows but won’t say out loud: solar leases are designed to benefit the bank. Not you. Every single one I have seen in 2026 is structured to extract maximum value from the homeowner while delivering minimum benefit. Leases suck. And I’m going to show you exactly why.
We Looked at Offering Leases. We Couldn’t Do It.
I want to be transparent about something. Florida Solar Design Group explored solar leasing. We did our homework. At the end of 2025, when the residential federal tax credit was sunsetting for homeowner-purchased systems, we genuinely hoped that some leasing companies would step up in 2026 with terms that were actually consumer-friendly. The Section 48E credit was still on the table for third-party owned systems. There was a real opportunity for leasing companies to pass along meaningful savings to homeowners who couldn’t or wouldn’t pay cash, sweetening the deal enough to make leases a legitimate option.
That never happened. Greed took over.
Every lease product we evaluated was the same story: terms designed to maximize the finance company’s return while giving the homeowner just enough of a discount to sign on the dotted line. The 30% tax credit that the leasing company claims? A fraction of it reaches the customer, if any. The rest gets absorbed into margins, fees, and inflated equipment costs. We couldn’t offer that to our customers and look them in the eye. So we didn’t.
What a Fair Lease Could Have Looked Like
I want to explain what we were hoping would exist in 2026, because it proves that a consumer-friendly solar lease is commercially viable. The industry just chose not to build one.
The simplest version: a leasing company offers a 5-year lease targeted at homeowners who would have otherwise paid cash for a system. The leasing company owns the equipment for those five years, claims the 30% Section 48E credit, and finances the system at a reasonable interest rate. The homeowner makes payments for five years. At the end of the term, the homeowner takes full ownership, and the leasing company exits the picture entirely. In that model, the leasing company earns a guaranteed return on a low-risk, short-term loan. The homeowner gets a meaningfully lower total cost because the tax credit savings are actually passed through. Both sides win.
The second version works more like a car lease, and anyone who has leased a vehicle will understand this immediately. The homeowner makes low monthly payments for five years. The leasing company passes some of the credit savings on to the consumer during that period. At the end of the five years, there’s a fixed, dollar-definite buyout value written into the contract from day one. Not a “fair market value to be determined by an independent appraiser” at some future date. A real number. You know on the day you sign what it will cost to own the system outright in year five, just like you know the residual value on a car lease before you drive off the lot. If the homeowner chooses not to buy out with cash, they either re-lease or remove the equipment at their expense, making the buyout the obvious and intended outcome. The deal could be further win-win by offering a loan at year-5 for the homeowner to buy out the system.
Here’s the detail that makes both of these structures commercially airtight: the IRS recapture period on the Section 48E credit ends after five years. The leasing company faces zero risk of losing the credit by transferring ownership at the five-year mark. There is no financial reason to maintain ownership of the equipment beyond five years other than to keep making money off the homeowner. A 25-year lease exists because the finance company wants 25 years of revenue, not because the tax code requires it.
Think about it from the leasing company’s perspective. How many cash buyers could you attract if you genuinely lowered their cost of ownership through a short-term, transparent financing mechanism with a clear exit? The volume alone would be enormously profitable. Instead, the industry chose to lock people into quarter-century contracts with escalating payments and zero equity. That tells you everything you need to know about whose interests these products serve.
And do leasing companies really want to be in charge of service issues from year 5 to 25 anyway? Of course not. They are not equipped to handle that effectively.
The AVL Trap That Makes Current Leases Even Worse
To qualify for the Section 48E credit, the leasing company must use equipment from an Approved Vendor List (AVL) that complies with Foreign Entity of Concern (FEOC) restrictions from the 2025 energy bill. If the panels or inverters have too much foreign-linked content, the credit is denied. So the leasing company limits your system to a narrow, shrinking list of approved components. As of this date, FEOC rules are still up in the air and the IRS has published only limited guidance.
Those components cost a fortune compared to open-market alternatives. I’m seeing some AVL-compliant components running 25% to 40% higher than quality non-restricted options. The leasing company doesn’t eat that cost. You do.
A 10 kW system purchased with cash using quality non-AVL components might run roughly $2.20 per watt for a simple install. The lease version could use AVL-compliant components at $2.70 or more per watt. The leasing company claims a 30% credit on the higher number, keeps a fat margin for themselves, and prices your lease at or above what the cash buyer would have paid. You end up paying the same or more, and you don’t own the system.
A 30% credit on an inflated price is not a discount. It’s an illusion.
You Can’t Verify a Single Thing They Promise
The entire lease sales pitch hinges on “we pass the tax credit savings to you.” But you have no way to verify how much of that credit actually shows up in your contract. The leasing company gets the check from the IRS. What percentage they share with you depends entirely on their internal business model and how aggressive their margins are. There is no disclosure requirement. There is no transparency. You are trusting a door-to-door sales rep’s word on a 25-year financial commitment.
You Lose All Control
With a lease, the leasing company owns the equipment on your roof. That has consequences most homeowners don’t think about until it’s too late.
Your roof will need replacement during a 25-year lease term. In Southwest Florida, with hurricanes, relentless UV, and summer heat cycles, that is a certainty. When that day comes, you don’t get to call your roofer and handle it. The leasing company owns those panels. They will have a say in who removes and reinstalls the system, and you will pay the cost. You lose all control over the process, the timeline, and the vendor. That’s your roof, your home, and someone else’s equipment dictating what happens next.
Want to add panels? Goes through the leasing company. Want to pair a battery? You need their permission. Want to switch inverter platforms? Not your call. If the inverter fails in year six, you enter a customer service maze between the leasing company, the original installer, and the manufacturer while your system sits offline. With an owned system, you call whoever you want and get it fixed on your timeline.
Most lease contracts also include an annual escalator of around 3%. Your payment goes up every year whether FPL raises rates or not. By year 12 or 15, you could be paying more for leased solar than you’d pay FPL for the same electricity. That’s not a savings plan. That’s a trap.
Your Home Becomes Harder to Sell
This is a big one. No, a huge one.
Owned solar panels increase home resale value. Every study confirms this. Buyers see an owned system as an upgrade.
Leased solar does the opposite. The buyer has to qualify for and agree to take over your remaining payments. Many buyers refuse. Real estate agents in Lee, Charlotte, and Collier Counties have been dealing with leased solar complications since the Solar City and Sunrun days of 2015 to 2017, and their opinion is universally negative. In worst-case scenarios, the seller pays to have the panels removed just to close the deal. Years of payments on equipment you never owned, and now you’re paying to have it pulled off your roof so you can sell your house.
We were named an expert on Redfin, powered by Rocket. Read the full article here: Questions to Ask Before Buying a House with Solar Panels
Many lease agreements have no reasonable way out unless you sell the house or die. That’s right. They will only offer you a buyout under certain circumstances, and never in the first 5 years (because of that IRS tax credit recapture issue). If you want out at any other time, you could be faced with prepaying all of the monthly lease payments for the remainder of the loan.
That is highway robbery. But it happens.
And Harder To Finance
A solar lease does not result in a lien on your house, but it is covered by a UCC-1 filing that attaches to the equipment itself. That alone is not going to stop a refinancing in most cases. Where the problems arise is if your debt to income ratio is already high. If you report the fat lease payments to your mortgage lender, they are going to consider that an expense against your ability to repay the mortgage, and it could stop you from getting a loan or increase your borrowing costs. The bank may not consider the utility cost reduction, because that is a variable expense, whereas the lease payment is a hard number.
And that applies to other types of consumer credit as well. A lender may look at a big long-term solar lease payment and have second thoughts.
The Contractor’s Role: Advocate or Accomplice?
Here’s what really bothers me about how the solar industry handles leases. The contractor could easily sit in the middle and play dumb. Sign the customer up, collect a big installation check from the finance company, and move on. The margins on lease installs can be enormous for the contractor.
I believe the solar contractor should be doing the opposite. We should be acting as advocates for the consumer, doing what is in the homeowner’s best interest first, even when that means walking away from a lucrative lease partnership. Profits follow when you do right by people. That has been my experience in this industry, and everything that I have done to get where I am.
If your solar contractor is pushing a lease and not offering you a side-by-side ownership comparison, ask yourself whose interest they’re serving.
The Bottom Line
Solar leases in 2026 are a predatory financial product dressed up as a consumer benefit. The Section 48E credit is real, but AVL requirements have inflated equipment costs, leasing companies are keeping the lion’s share of the credit, and the contract terms are designed to benefit the bank at your expense. A consumer-friendly 5-year lease with a clear ownership path was entirely possible. The industry chose 25-year lock-ins instead. That tells you everything.
If someone shows up at your door pushing a solar lease in 2026, ask them to leave. Then call a local solar contractor who will design a system you own, built with the best equipment for your home, at a price you can see and verify. That’s how solar should work.
Florida Solar Design Group designs and installs homeowner-owned solar electricity and battery backup systems in Lee, Charlotte, and Collier Counties. If you’ve been pitched a lease, talk to us first so we can give you a reality check. No games. No hidden margins. Just the math.
