Should I Buy or Lease Solar Panels?
When you start exploring solar, you may come across two fundamentally different ways to pay for it: buying the system outright, or signing a lease or power purchase agreement (PPA) where someone else owns the system and you pay for the electricity it generates. Both have advantages, and the right choice depends on your financial situation and your priorities.
This guide explains both options honestly, including the parts that lease salespeople would rather you did not focus on.
Buying outright: what you actually get
Buying outright means you pay for the system in full, you own it, and you keep 100% of the savings and Smart Export Guarantee payments. A typical 4 kW residential system costs £6,500-£8,500 fitted in Wales currently, depending on roof complexity and whether you include a battery. The system pays back the cost in 7-10 years through bill savings and export income, and then continues generating for another 15-18 years of pure benefit.
For homeowners with the cash available or access to a low-cost loan, buying outright is almost always the best financial choice. The lifetime savings are far higher than any leasing alternative, and ownership gives you full control of the system, the data, and any future decisions.
Lease and PPA arrangements: how they work
Under a lease or PPA, a third party owns the solar system on your roof. You sign an agreement — typically 20-25 years — to pay either a fixed monthly fee (lease) or a per-kWh rate for the electricity the system generates (PPA). The rate is usually set at a discount to your current grid tariff, so you save money on your electricity bill from day one with no upfront cost.
This sounds attractive, and for some households it is. But the lifetime economics are significantly less favourable than buying. Over 25 years, you typically pay back 2-3 times the value of the system through your discounted electricity payments. The provider also keeps all Smart Export Guarantee income, all rebate eligibility, and any capital appreciation of the equipment.
- Buying: highest lifetime savings, full ownership, full control
- Lease: no upfront cost, modest ongoing savings, no ownership
- PPA: pay only for power generated, but at the provider's rate
- Loan-financed buying: ownership benefits with manageable payments
- House sale implications: lease and PPA can complicate conveyancing
The impact on house sale
This is the most under-discussed aspect of lease and PPA arrangements. When you sell your home, a buyer with a leased solar system has to agree to take over the lease — and many buyers, particularly cash buyers and those using high street mortgage lenders, refuse to do so. This can complicate conveyancing significantly, delay sales by weeks or months, or in some cases require you to buy out the lease at significant cost.
Owned solar systems, by contrast, are an unambiguous selling point. They add to the property value, improve the EPC rating, and require no special handling during conveyancing.
Loan-financed buying as a middle ground
For homeowners without the cash to buy outright but who want the long-term benefits of ownership, a loan can be an excellent middle ground. Home improvement loans, secured against the property or unsecured, currently offer rates of 6-12% APR depending on credit profile and amount. A 5-year loan covering a £8,000 system at 8% APR costs around £162 per month.
If the system generates more than £162 per month of value (which most 4 kW systems do at current electricity prices), the system is cash-positive from day one. After the loan is repaid, you continue to benefit from all the generation and SEG income for another 15-20 years.
Frequently asked questions
Is leasing solar a bad idea?
Not necessarily, but the lifetime economics favour buying for most homeowners. Lease arrangements suit households with no cash and no access to affordable credit, who want some savings now without upfront cost.
How much more does owning save over leasing?
Over 25 years, an owned system typically delivers 2-3 times the lifetime value of a leased system. The exact figure depends on the lease terms and the system size.
Will a leased system affect my house sale?
It can. Some buyers and their mortgage providers refuse to take over a lease, which can delay or complicate conveyancing. Owned systems are an unambiguous selling point.
Do you offer leasing?
We focus on owned installations because we believe they deliver better long-term value for our customers. We can recommend reputable financing partners for customers who need credit to buy.
What loan terms work for solar?
Most home improvement loans of 3-10 years work well. The key is that the monthly cost is less than the monthly savings, which is true for most properly sized systems at current electricity prices.