Solar lease vs. subscription

Is subscription solar just a solar lease with a new name?

Partly, and the true part is worth saying first: both are third-party ownership. You don't own the panels, you don't claim any federal credit, and you pay monthly for power from equipment on your roof that belongs to someone else. A subscription is not ownership in disguise. What differs is the contract, not the category.

So when the biggest names in solar comparison write that subscription solar is a rebranded lease, the category point is fair and we are not going to pretend otherwise. Where it stops being fair is the assumption that the paperwork is the same. How long you are bound, what it costs to leave, whether anything is recorded against your property, and what your buyer has to do at closing are all different, and those four are what actually cost people money.

What does a solar lease actually commit you to?

Typically 20 to 25 years, at a payment that rises 2.9–3.9% every year, often secured by a UCC-1 fixture filing recorded against the property. Getting out early means paying a buyout the lessor calculates. Selling means your buyer either qualifies for and assumes the remaining term, or you settle that buyout at the closing table.

Your own numbers are already written down. Find the early termination, purchase option, and assignment clauses in your lease, and ask the lessor for the current buyout figure in writing, not over the phone. If a fixture filing exists, it was recorded under your state's version ofUCC Article 9, and your buyer's lender will find it whether or not anyone mentioned it to you (Fannie Mae Selling Guide B2-3-04).

Lease, PPA, and subscription side by side

Read that table honestly and the first three rows are identical. That is the concession, and it is the part most comparison articles get right. Everything underneath is where a subscription earns the different name.

Does a subscription put a lien on your house like a lease does?

No. A subscription typically carries no lien and no UCC filing, because nothing is being financed against your property. It isn't a loan. A lease or PPA often carries a fixture filing that surfaces in a title search and has to be cleared, subordinated, or paid off before a sale closes. That difference is procedural rather than philosophical, and procedure is what decides closings.

The full mechanics of how solar equipment gets recorded against a home, and how to check whether yours was, are in do solar panels put a lien on your house. Check it yourself rather than taking a salesperson's word for it, ours included.

What does it cost to get out of each one early?

A lease exit is a number the lessor calculates and you accept; published lease-exit guides routinely quote five figures, commonly $5,000 to $15,000, though that range is somebody else's arithmetic and not a quote. A subscription has no buyout: the commitment runs 36 months inside a ten-year agreement, and after month 36 you can cancel with no fee.

Two honest caveats on that. The only buyout number that binds you is the one your own lessor puts in writing, so get it in writing before you believe any range, ours included. And the subscription's cancellation right lives in a clause. Read it, and make the salesperson show it to you, including what the provider may do if you cancel inside the first three years, which is discretionary and not guaranteed. Anyone describing the agreement as three years flat, or ten years flat, is telling you half of it.

What happens to each one when you sell the house?

With a lease, your buyer has to qualify for and assume the remaining term, or you buy the system out before closing. With a subscription there is nothing to assume: your maximum exposure is 36 months, the ten-year agreement can be cancelled after month 36 with no fee, and if the buyer doesn't want the panels the provider removes them at no charge.

Note what that does and doesn't promise. The buyer may choose to start their own subscription, on their own credit screen and their own terms. Nobody is obligated, and no contract moves to them automatically. The point isn't that a buyer inherits something convenient; it's that they inherit nothing at all. The closing-table version of this is atselling a house with solar.

Is a 1.9% escalator meaningfully better than 2.9–3.9%?

Yes, though mostly because of how long you're exposed to it. Three years at 1.9% compounds to about 5.8% in total. A 3.9% escalator running the full 25 years of a lease compounds to roughly two and a half times the starting payment, which is how leases drift above the utility rate in their back half. Same mechanism, very different exposure.

A subscription does have an escalator, and you should hear that from us before you hear it from anyone else: 1.9% per year, fixed and disclosed. Compare either one against what your utility actually charges rather than against what a salesperson says it will. The federalstate-by-state price tablesare public, and they are the right benchmark for both products.

Who should sign a lease, or just buy the panels outright?

Anyone confident they're staying 20-plus years who wants to own the asset and hold the long-run cost floor. Cash or a loan usually wins on lifetime cost for that person. The residential 30% federal credit is gone for new installs, so run the ownership math on today's rules and take the tax question to your CPA, not to a salesperson.

A subscription is also the wrong answer if your roof needs replacing first, if heavy shade or a bad roof plane means production won't pencil, if you can't clear the credit screen, if you rent or own a condo, or if any new monthly obligation would strain the budget. And if you have already signed a 20-year lease, the useful question is not which product is better in the abstract. It's what your buyout schedule says. Go read it.

One product that is not on this page at all: community solar, which is a subscription to a share of a remote solar farm with no panels on your roof. Search results conflate it with this constantly, and the prices you'll have seen quoted for it are not comparable to a rooftop quote. The difference is set out incommunity solar vs. subscription solar.

Get the numbers for your own roof

Run your bill through the estimator. It takes about a minute, and a real person follows up with figures for your actual roof, escalator included. If you want the mechanics first, start with how the whole model works. Whichever you sign, verify every mechanic on this page against the specific agreement in front of you, not against a comparison article, including this one.