Solar Lease vs. Loan vs. Cash in Colorado (After the 30% Credit)

Before 2026, most Colorado homeowners bought solar and claimed the 30% §25D credit. Congress ended that credit for systems whose installation was completed after December 31, 2025. If you pay cash or take a loan today, there is no federal income-tax credit for the solar.

Third-party-owned systems are different. When a company owns the panels on your roof and leases them to you or sells you the power, that company can still claim the business credit under §48E, as long as the solar is placed in service by December 31, 2027. Batteries have a longer federal runway. A good lease or PPA passes that value to you as a lower payment. The rules are still being clarified, so verify current terms and talk to your tax advisor.

You pay $2.80–$3.25 per watt up front, own the system on day one, and every kWh it makes is yours for its whole life. There’s no interest and no escalator. Over 25 years that usually makes cash the lowest total cost, provided the money wasn’t earning more somewhere else.

Colorado still helps a little. Qualifying solar components are exempt from state sales and use tax, residential systems are generally exempt from property tax as personal property, and some utilities and cities offer rebates. None of that comes close to the old 30% credit. Buying outright makes the most sense on a good roof, in a home you plan to keep, in a utility territory that credits exports well.

We offer two loan paths. Colorado’s RENU program through Westerra Credit Union runs 7.74%–8.99% APR for up to 20 years. Concert Finance offers 8.99% for up to 25 years. You own the system, just as with cash, and the loan payment replaces part of your electric bill.

On a $24,000 system, about 8 kW at our pricing, a 20-year RENU loan at 7.74% is about $197 a month, or about $47,000 paid in total. A 25-year Concert loan at 8.99% is about $201 a month, or about $60,000 total. Stretching the term barely lowers the payment and adds a lot of interest. Before you sign, compare the payment with the part of your bill the system will actually offset, and ask your lender about prepayment and what happens at a sale.

With a lease, you pay a set monthly amount for the equipment. With a PPA (power purchase agreement), you pay a set price per kWh the panels produce. Either way, a third party owns the system, handles monitoring and repairs under the contract, and claims the federal credit. Our leases and PPAs typically run $125–$240 a month, priced 20–30% below your current retail rate.

The trade-off is that you don’t own the asset. Over the full term you’ll usually pay more than a cash buyer, and the contract comes with you if you sell. For households without the cash, who can’t use tax benefits, or who want a predictable bill with maintenance included, it’s a real option in 2026, and with the §48E deadline, a time-sensitive one.

Most leases and PPAs raise the price each year by a fixed escalator. Ours range from 0% to 3%. On a $150 starting payment, a 0% escalator stays at $150 for all 25 years, about $45,000 in total. At 2% the payment reaches about $179 in year 10, $219 in year 20 and $241 in year 25, about $57,700 in total. At 3% it’s about $196 in year 10, $263 in year 20 and $305 in year 25, about $65,600 in total.

The escalator only matters relative to your utility’s rates. If the lease starts 20% below retail with a 3% escalator and utility rates rise 2% a year, the lease stays cheaper for about 23 years. If utility rates are flat, it passes retail in about 7–8 years. Nobody can promise which path rates will take, so a lower escalator with a slightly higher starting price is often the safer contract. We’ll show you the year-by-year table for any offer, including ones from other companies.

An owned, paid-off system simply conveys with the house, like a furnace. Buyers and appraisers see a documented system with production history and warranties. If you financed it, the loan typically needs to be paid off at closing or assumed under the lender’s rules. Ask up front whether your loan places a lien or fixture filing on the property.

A leased system or PPA must either be transferred to the buyer, who usually has to qualify with the leasing company, or bought out. Transfers generally go smoothly when the contract has a fair escalator and the payments are below the buyer’s utility alternative. A 3% escalator in year 12 is a harder sell. If you might move within a few years, weigh that before choosing third-party ownership.

Pay cash if you have it, plan to stay 10+ years, and your roof and utility make the numbers work. Take a loan if you want ownership without draining savings and the payment sits near or below the bill it replaces. Choose a lease or PPA if you want the lowest cost on day one, can’t use tax benefits, want maintenance handled, or simply want lower bills without a large upfront cost. Just be clear about the escalator and the sale terms.

Whichever you pick, there should be a line-by-line comparison you can check yourself. Our financing calculator lays the options side by side over 25 years.