What is the main difference between a solar lease and PPA?

A lease commonly charges for use of the system; a PPA commonly charges per unit of electricity the system produces. The signed payment formula controls.

Do I own the panels under either option?

Usually not during the contract term. Check any purchase option and the price or valuation method used.

Does a PPA replace the utility bill?

No. The household generally still receives a utility bill for grid purchases, fixed charges, and other tariff items.

Solar Lease vs PPA: Payment and Contract Differences

Both commonly use third-party ownership, but one usually charges for the system and the other for electricity produced.

Published by Solar Quote Checker Editorial Team · Last verified July 23, 2026

Under a typical solar lease, the customer pays a recurring amount for use of the system. Under a typical PPA, the customer pays a stated price per kilowatt-hour generated. Actual contracts vary, so the payment formula and escalator must be read directly.

Compare how the bill is calculated

For a lease, model every scheduled payment and increase. For a PPA, model the energy rate, annual escalator, expected production, minimum charges, and how the contract handles outages or underperformance. Compare both with the utility bill that remains.

Check ownership, service, and performance terms

The provider generally owns the system and may receive incentives. Confirm monitoring, maintenance, roof access, insurance, outage response, production guarantees if any, and the customer's remedies. A payment tied to production does not by itself guarantee household savings.

Read transfer and end-of-term clauses

Compare contract length, assignment, buyer qualification, early termination, purchase options and pricing, renewal, removal, and roof restoration. Request the exact transfer and buyout schedules rather than a verbal summary.

Primary sources

U.S. Department of Energy: Homeowner's Guide to Solar Financing: Leases, Loans and PPAsRetrieved 2026-07-23
Federal Trade Commission: Solar Power for Your HomeRetrieved 2026-07-23

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Frequently asked questions

What is the main difference between a solar lease and PPA?: A lease commonly charges for use of the system; a PPA commonly charges per unit of electricity the system produces. The signed payment formula controls.
Do I own the panels under either option?: Usually not during the contract term. Check any purchase option and the price or valuation method used.
Does a PPA replace the utility bill?: No. The household generally still receives a utility bill for grid purchases, fixed charges, and other tariff items.