Solar Lease vs Buy: Which Option Is Better for Your Hawaii Home or Business?

Solar Lease vs Buy: Which Option Is Better for Your Hawaii Home or Business?

If you're comparing solar quotes on Oʻahu, one of the first forks in the road is whether to lease a system or buy one. Both put panels on your roof and both can lower what you send Hawaiian Electric each month. What differs is who owns the equipment, who gets the incentives, who handles repairs, and what happens when you sell or refinance.

Our team has been installing solar in Hawaii since 1993, and this is one of the questions we hear most. Below, we walk through solar lease vs buy in plain language, including what changed in 2026, so you can weigh the trade-offs against your own home, your utility account and your plans.

The Short Answer

For most Hawaii homeowners who plan to stay put, have a sound roof and can pay cash or qualify for financing, buying solar panels usually delivers more long-term value, because you own the system and keep what it produces. A solar lease can make sense if you want little or no money down, prefer not to deal with ownership, or can't use financing right now. The right answer depends on your roof, your budget, how long you'll stay, and whether you want battery backup.

What Solar Lease vs Buy Actually Means

Leasing solar panels

With a solar lease, a third-party company owns the system on your roof. You pay a fixed monthly amount, often for 20 years or more, to use the power it produces. The leasing company typically handles monitoring and repairs, and it keeps any tax credits or incentives tied to the equipment.

A close cousin is the power purchase agreement (PPA). Instead of a flat monthly lease payment, you pay a set rate for each kilowatt-hour the system produces. Many of the same pros and cons apply, so when we say "lease" below, most of it holds true for a PPA too.

Buying solar panels

When you buy, you own the system outright. You can pay cash or finance it with a solar loan, and in both cases the equipment belongs to you. You decide how it's designed, whether to add a battery later, and which utility programs to join. You're also responsible for the system over its life, which is where installer warranties and support matter.

Solar Lease vs Buy at a Glance

What Changed for Solar Lease vs Buy in Hawaii in 2026

The lease-or-buy math looks different this year than it did even 12 months ago. Three changes are worth understanding before you sign anything.

The federal homeowner credit has ended

For years, the 30% federal Residential Clean Energy Credit was one of the strongest arguments for buying. According to the IRS Residential Clean Energy Credit guidance, that credit is not available for property placed in service after December 31, 2025. Businesses, including solar leasing companies, fall under separate federal business energy credits with their own rules and deadlines. That's one reason some national companies now push leases harder than before. It's worth asking any lease provider how the credits it claims are reflected in your price.

Hawaii's state credit is in transition

Hawaii's Renewable Energy Technologies Income Tax Credit is still part of the picture, but it's changing. SB3125, now Act 24, adds new eligibility requirements, certification provisions, an aggregate cap and a future sunset, beginning with taxable years after December 31, 2026, according to the Hawaiʻi State Energy Office. In June 2026, Governor Green issued Executive Order 26-02, which the Energy Office says effectively preserves the solar credit for 2026, with conditions. Guidance is still being developed, so we explain what Act 24 changes in more detail on our blog, and we encourage every customer to confirm their own eligibility with a qualified tax professional. With a lease, any credit tied to the equipment goes to the owner, which is the leasing company, not you.

HECO's battery incentive goes to the system owner

Hawaiian Electric's Bring Your Own Device (BYOD) Plus program pays an upfront, per-kilowatt incentive for new batteries paired with rooftop solar, in exchange for a five-year commitment to share stored energy during a daily window. Hawaiian Electric states that if a lease is signed for the battery, the leasing company is the system owner and receives the upfront incentive. If you buy, it's paid to you. For families thinking about solar plus battery storage for outage backup, that difference belongs in your comparison.

Comparing Costs Over Time

Because every roof, electric bill and financing situation is different, we don't quote savings figures in an article like this. We do suggest comparing these points side by side on any offer you're considering:

• Total cost over the full term. Add up every lease payment over 20 or 25 years, and compare it with the total purchase price or total loan payments.
• Escalators. Many leases increase the payment by a set percentage each year. Ask whether yours does, and by how much.
• What your HECO bill still looks like. Most homes still pay some monthly charges to Hawaiian Electric after going solar. Compare your likely remaining bill under each option, not just the solar payment.
• What happens after the term ends. With a lease, you may renew, buy the system or have it removed. With ownership, the system keeps producing after the loan is paid off.
• Roof timing. If your roof needs work in the next few years, removing and reinstalling panels costs money under either option, and a lease contract may dictate who does it.

For a closer look at the ownership side, see our breakdown of how photovoltaic costs stack up over 25 years.

Pros and Cons of Leasing Solar Panels

Pros

• Little or no money down
• Predictable monthly payment
• Monitoring and repairs usually handled by the leasing company
• No need to qualify for or carry a solar loan

Cons

• You don't own the equipment or build equity in it
• Tax credits and HECO's upfront battery incentive go to the leasing company
• Annual escalators can shrink the gap between your lease payment and what you'd pay the utility
• Selling your home means a buyer must qualify for and accept the lease, or you pay to buy it out
• Adding a battery, adding panels or reroofing may require the lessor's approval
• Long contracts, often 20 years or more, with terms that are hard to change

Pros and Cons of Buying Solar Panels

Pros

• You own the system and every kilowatt-hour it produces
• Any tax credits you qualify for are yours
• You choose the equipment, the design and the installer
• You can add a battery, an EV charger or more panels on your own schedule
• An owned system transfers with the home rather than a contract a buyer has to take over

Cons

• A cash purchase takes a significant upfront investment
• Financing means a loan payment until the system is paid off
• You're responsible for the system over its life, so installer quality and warranty coverage matter
• Tax credit value depends on your own tax situation and on rules that are still changing in Hawaii

Hawaii Factors That Shape the Decision

National lease-vs-buy guides often skip the details that matter most here.

Your roof comes first

Many Oʻahu homes have roofs that are due for replacement within the life of a solar system. Reroofing before panels go up avoids paying to remove and reinstall them later. If you own your system, you control that timing. With a lease, check the contract for who pays and who performs the removal. We handle solar-ready roofing in house so the roof and the system can be planned together.

Outages and battery backup

For many families, backup power during outages matters as much as the bill. If a battery is part of your plan, compare how each option handles it: who owns the battery, who receives HECO's incentive, and whether you can control how the battery is used.

HECO programs and interconnection

Every rooftop system on Oʻahu has to be approved by Hawaiian Electric before it's turned on, and the program you join shapes how exported energy is credited. With an owned system, you and your installer choose the program that fits. With a lease, the leasing company generally makes those choices as the owner.

Selling or refinancing your home

A lease is a contract tied to your property. When you sell, the buyer typically has to qualify for and agree to take over the lease, or you pay it off. That can add a step to escrow. An owned, paid-off system is simply part of the home.

Is It Better to Lease or Buy Solar Panels? Five Questions to Ask Yourself

1. How long will you stay in the home? The longer you stay, the more ownership tends to pay off. If you might sell within a few years, look closely at lease transfer terms.
2. Can you pay cash or qualify for financing? If so, buying is within reach without a large upfront payment. Our financing options for systems you own include local lenders.
3. Do you want a battery for outages? Ownership lets you receive HECO's battery incentive and decide how your battery is used.
4. Is your roof ready? Plan reroofing before solar goes up, whichever option you choose.
5. How do tax credits apply to you? Hawaii's rules are in flux. Talk with a qualified tax professional about your situation, and review Hawaii tax credits and incentives as a starting point.

Solar Lease vs Purchase for Oʻahu Businesses

For small and mid-size commercial property owners, the question is often framed as operating expense versus asset. A lease or PPA keeps capital free and turns solar into a predictable operating cost. Ownership puts the system on your books as an asset, may open business tax benefits your accountant can evaluate, and gives you control over the equipment for its full life. Lease terms, landlord and tenant arrangements, and roof warranties all deserve a close read before signing. Our article on treating solar as a business asset covers the ownership side for commercial properties in more depth.

Questions to Ask Before You Sign a Solar Lease

If a lease is still on the table, get clear answers to these before signing:

• Is there an annual payment escalator, and what is it?
• How long is the term, and what are my options at the end?
• What does a buyout cost, and how is that price calculated?
• What happens if I sell my home, and what does a buyer have to do to take over the lease?
• Who pays to remove and reinstall panels if I need a new roof?
• Who owns any battery, and who receives HECO program incentives?
• Is the installer local, and are the crews employees or subcontractors?
• What production is guaranteed, and what happens if the system underperforms?

How Our Team Helps You Decide

Alternate Energy Hawaii is locally owned and has been serving Hawaii since 1993. Since 2011, we've installed more than 59 MW of Mitsubishi Electric solar panels, and we're a Tesla Premier Installer for Powerwall battery systems. Our installers are AEI employees, not subcontractors, and the same company supports your system after installation.

We design and install systems you own, paid for with cash or through financing with local lenders. We won't tell you ownership is right for every home. If you already have a lease offer, bring it to your consultation and we'll walk through it next to an ownership option, line by line. You can also see how to compare PV providers before you choose anyone, including us, and learn more about our in-house installation crews.

When you're ready, request a free solar evaluation and we'll look at your roof, your HECO bills and your goals together.

More Ways to Lower Your Energy Costs

Solar is often one part of a bigger plan. Our in-house crews also handle:

• Photovoltaic systems we install for homes and businesses
• Solar water heating to cut the cost of hot water
• Mitsubishi ductless air conditioning for efficient cooling
• EV charger installation planned around your solar and battery
• Monitoring and system support after installation

Frequently Asked Questions

Is it better to lease or buy solar panels in Hawaii?

For most homeowners who plan to stay and can pay cash or finance, buying offers more long-term value because you own the system, keep any credits you qualify for and can receive HECO's battery incentive. Leasing can fit if you want no money down or can't take on financing. Your roof, budget and plans decide it.

Can I get a tax credit if I lease solar panels?

Generally, no. Tax credits tied to solar equipment go to the owner, and with a lease that's the leasing company. The federal homeowner credit ended for property placed in service after December 31, 2025, and Hawaii's state credit is changing under Act 24. Please confirm your situation with a qualified tax professional.

Do you save more by leasing or buying solar?

Savings depend on your electric use, roof, system size, contract terms and financing, so there's no single answer. Owned systems tend to deliver more value over the long run because there's no lease payment once a loan is paid off. Compare the full-term cost of each option on your actual quotes.

Does a solar lease affect selling my home?

It can. A buyer usually has to qualify for and agree to take over the lease, or you'll need to buy it out before closing. An owned system transfers with the home.

Can I add a Tesla Powerwall to a leased system?

It depends on your lease contract, and you'll likely need the leasing company's approval. If you own your system, adding a battery is your decision, and you can apply for HECO's BYOD Plus incentive as the owner.

Is solar still worth it in Hawaii in 2026?

Hawaii's electricity rates remain among the highest in the country, so solar continues to make sense for many households even with credits changing. Whether it's right for your home depends on your roof, usage and goals, which is what a site evaluation is for.