Quick answer: Buying usually saves more over the life of the system, because you keep New Jersey’s ADI payments and every dollar of bill savings. Leasing can make sense if you want little or no upfront cost and no maintenance, and since the federal tax credit for buyers ended in 2025, some leases now come with lower monthly costs than they used to. The right choice depends on your budget, how long you plan to stay in your home, and the actual offers in front of you.
Before 2026, the answer to “lease or buy?” was fairly simple for most people. Buyers got a 30% federal tax credit, and that tipped the math toward owning. Now that credit is gone for homeowners, and the question is worth a fresh look.
What changed when the tax credit ended
The homeowner solar tax credit ended for systems placed in service after December 31, 2025. If you buy with cash or a loan today, there is no federal credit to claim.
Leases and power purchase agreements (PPAs) work differently. With these, a company owns the panels on your roof and you pay for the system or the power it makes. That company can still claim a separate business tax credit through the end of 2027 under current rules, and it may pass part of that value to you through a lower monthly cost. For projects that start after July 4, 2026, the system generally has to be up and running by the end of 2027 to qualify, so lease pricing could change after that.
Buying vs leasing at a glance
| Buy (cash or loan) | Lease or PPA | |
|---|---|---|
| Upfront cost | Full system cost, or a down payment with a loan | Often little or nothing down |
| Who owns the panels | You do | The solar company |
| NJ ADI payments | You keep them for 15 years | Usually kept by the company |
| Federal tax credit | None for systems installed in 2026 | Company may claim it and pass some savings to you |
| Maintenance and repairs | Your responsibility, with warranty coverage | Usually handled by the company |
| Long term savings | Typically higher | Typically lower, but less risk upfront |
| Selling your home | System adds value and transfers with the house | Buyer must take over the contract, or you buy it out |
When buying makes more sense
- You can pay cash or get a loan with a payment close to what you pay your utility today.
- You plan to stay in your home for many years.
- You want to keep the state’s ADI payments, which can add up to a meaningful amount over 15 years.
- You want the system to count toward your home’s value when you sell.
When leasing makes more sense
- You want to lower your electric costs without a large upfront cost.
- You do not want to deal with maintenance or repairs.
- You may not stay in the home long enough to make buying pay off.
- The lease offer you have is clearly cheaper per month than what you pay your utility now, with a small or no yearly increase.
Questions to ask before you sign either one
- What is the total cost over the full contract, not just the first month?
- Does the monthly cost go up each year? By how much?
- Who keeps the ADI payments?
- What do the equipment, workmanship and roof warranties cover, and for how long?
- What happens if I sell my house? Can the contract be transferred or bought out, and at what price?
- Is the company that installs the system the same one that services it?
From the Horizon Home team: Most homeowners we talk to were only shown one option, either a lease or a purchase, depending on what that company sells. Seeing both side by side for your actual home is the fastest way to know which one really costs you less.
Frequently asked questions
Is a solar lease a bad idea in New Jersey?
Not by itself. A lease can be a good fit if you want lower bills with little upfront cost. The key is reading the yearly increase and the terms for selling your home before you sign.
Do I get New Jersey’s solar payments if I lease?
Usually not. The ADI payments go to whoever owns the system, which in a lease is the solar company. That is one of the main reasons buying tends to save more over time.
Can I buy out my lease later?
Many leases include a buyout option, but the price and timing vary a lot from one contract to another. Ask for the buyout terms in writing before you sign.
The bottom line
There is no single right answer for every New Jersey home. Buying usually wins over the long run, and leasing can win if upfront cost or flexibility matters most to you. The way to know is to compare real offers for your home, not general rules.
Horizon Home compares lease and purchase options from multiple solar companies so you can see them side by side, with no pressure. Get your free solar comparison, or read more about whether solar is still worth it in New Jersey.
Sources: IRS Residential Clean Energy Credit, New Jersey Clean Energy Program.
