Solar PPA vs Buy Calculator — Full Financial Analysis 2026
Compare a solar PPA vs outright purchase in 2026. Calculate 25-year payments, savings and which option wins financially.
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How to use this calculator
- Enter the total purchase price of the solar system.
- Enter the PPA rate ($ per kWh you pay the solar company for the electricity generated).
- Enter the annual PPA rate escalation (typically 1–3% per year in the contract).
- Enter your current electricity rate and expected annual utility rate increases.
- See 25-year cash flow comparison between PPA and purchase.
Understanding your results
Solar PPA (Power Purchase Agreement): Instead of buying the solar system, you agree to purchase the electricity it generates at a fixed rate per kWh — typically 10–20% below your current utility rate. The solar company owns, installs and maintains the system for free. You pay only for the power it produces.
Solar purchase: You own the system, claim the 30% federal ITC, and keep all electricity savings. After payback (typically 8–12 years), your electricity from solar is essentially free for the remaining 13–17 years of the warranty period.
The key financial difference: With a PPA, your locked-in rate protects you from utility rate increases — but you miss out on the 30% federal tax credit (which the system owner claims) and you don’t own an appreciating asset. Over 25 years, outright purchase typically generates $15,000–$30,000 more in net financial benefit than a PPA.
When a PPA makes sense: Zero upfront cost and zero maintenance responsibility make PPAs attractive for homeowners who cannot qualify for a solar loan, cannot use the federal tax credit, or who want to test solar before committing to ownership. Commercial property owners in high tax brackets often benefit significantly from PPAs due to MACRS depreciation benefits for the system owner.