The price of solar sounds simple: at a time when electricity bills are skyrocketing, installing panels can lower your utility costs and guarantee you a lower fixed rate from a green energy source. When it comes time to sell, the panels can increase the value of homes by 5% to 10%.
The only problem? Many solar homeowners don’t actually own their panels. Instead, they rent them out. Leases can last up to 25 years and come with hefty monthly payments, annual increases and high early purchase prices – they’re a liability, not an asset.
Landlords who sign such deals often do so under the impression that if they sell their homes before the lease ends, their buyers will pick up the payments. But the reality is more complicated: Buyers may struggle to qualify to take on long-term liability on top of their mortgage, or simply refuse to take on a hefty contract they didn’t participate in signing.
As buyers snap up land in many parts of the country, real estate agents say solar leases have emerged as a frequent sticking point in negotiations that can end with sellers paying off contracts early, often for tens of thousands of dollars, to keep their buyers from walking away.
“When you go to sell the house, if you don’t pay off this system, the buyer has to qualify not just to buy the house, but also to qualify for this rental,” said John Bulik, a real estate agent in the west suburbs of Denver. “It can turn off some potential buyers, and we see a lot of buyers don’t want to go through that trouble.”
Read more: Seller Disclosure: How It Affects Home Sellers and Buyers
Residential solar has exploded in popularity over the past two decades, spurred by growing interest in green energy, high electricity prices, tax incentives and technological advances that have made panels cheaper and more efficient. Nationally, about 8 percent of homes now have solar (in sunny states like Hawaii, California, and Arizona, that number is much higher), making paneled roofs increasingly common in listing photos.
While prices have come down over the years, solar energy is still a significant investment: In 2025, Tesla pegged the average cost of a system at $21,900 to $26,400.
Leasing eliminates these upfront costs and relieves homeowners of the maintenance headaches associated with outright panel ownership. The trade-off, in addition to the potential complications of selling the home, is that they often end up paying more and see their energy savings decrease over time because of common contract clauses that increase payments each year.
Despite the drawbacks, rentals have grown in popularity in recent years. By mid-2024, about 36 percent of residential solar projects were leased or under a lease agreement known as a power purchase agreement, up from 22 percent three years earlier, according to solar research firm Ohm Analytics.
An aerial view of residential homes, many with solar panels, on September 17, 2025 in Fontana, California (Photo by Mario Tama/Getty Images) ·Mario Tama via Getty Images
And leases are likely to become even more popular this year after a 30% tax credit for buying clean energy expired at the end of 2025, while another commercial tax credit, for companies offering leases and PPAs, remains in place. Tax changes have left many solar companies scrambling to adjust their business models.
“I think it’s definitely pushing the industry, meaning solar installers and financing companies, to come up with more leasing and PPA products,” said Vikram Aggarwal, founder and former CEO of EnergySage, a solar comparison shopping marketplace.
Still, Aggarwal said he doesn’t think most customers would enter into leasing if they fully understood the implications.
When Kip Barnard, an agent in San Jose, Calif., works with a solar panel seller, one of his first steps is to figure out whether the system is owned or leased. If it’s leased, he says he’ll “gently” explain how those contracts can complicate sales. In Silicon Valley, a hot market, buyers usually end up taking on leases eventually. But he calls the whole process — marketing the system, getting a lease transfer and managing negotiations with the buyer and seller — “a challenge.”
“I think they’re being sold a good-sounding product,” Barnard said of the rental system vendors. In many cases, homeowners may have been misled by salespeople touting solar’s equity benefits while hiding the fact that leases are debt. “I’ve never met a buyer who was happy to take someone else’s lease.”
Read also: 8 tax deductions for homeowners
When building a home in Gun Barrel City, Texas, a small town outside of Dallas, Josie Williams and her husband fell in love with a four-bedroom, two-bathroom home that offered an open layout, a short commute to the pest control company where they both work, and a corner lot with plenty of yard space for their young daughters to play. The only problem? The owner owed more than $60,000 on the home’s solar panels and was looking for a buyer to make the payments.
Williams, 33, knew little about solar, and her agent encouraged her to dig into the details of the contract. They found that while the house had no electric bill, she and her husband would have to pay $291 a month for the panels for the next two decades. The price seemed high, and they worried that the additional liability might slow down their equity building.
They tried to negotiate a lower offer that reflected the panels’ liability or a deal where the seller would pay for the system. When they were rejected, they left.
“My thought process was, if you have loans for something like this, it’s not somebody else’s responsibility to come in and pay for it,” Williams said.
So what’s a homeowner to do? At a time when electricity costs are rising rapidly, agents and experts who spoke to Yahoo Finance said they believe solar panels can still be a valuable and cost-saving addition to a home, provided they are owned. An analysis of 2025 Zillow data by comparison site SolarReviews found that homes with solar received a 6.9 percent premium over those without.
In Colorado, Xcel Energy, the utility for much of the Denver area, has aggressively raised rates in recent years and is looking for another 10 percent increase this year. Nationally, energy bills have risen much faster than the rate of general inflation. These trends can make home solar make sense as a long-term investment, said Bulik, who installed solar on his own home about eight years ago.
“It makes buying start to look attractive again, even with the tax incentives gone,” Bulik said.
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages and home insurance.
Subscribe to the Mind Your Money newsletter
Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement and more
Read the latest financial and business news from Yahoo Finance
