Solar Lease vs Buying in NYC: Which Actually Wins in 2026

The answer changed on 1 January 2026, and most advice online has not caught up. For years the standard guidance was simple: buy if you can, because you get the 30% federal tax credit and the lease company keeps it if you lease. That guidance is now obsolete in a specific and important way – the residential federal credit no longer exists for a homeowner who buys. This page explains what each route actually gets you in New York City today, including the questions worth asking before you sign either one.

Talk through the numbers – (718) 962-7699

What changed

The federal Residential Clean Energy Credit – Section 25D, the 30% one – was repealed for systems placed in service after 31 December 2025. If you buy a solar system outright in 2026, there is no federal credit on your tax return. None.

Section 48E, the business-side clean electricity credit, survives into 2027. But it can only be claimed by whoever owns the system. A homeowner who buys their own system is not a business, so 48E is not available to them either.

Follow that through and you get the counterintuitive result that defines the NYC market this year: the only way federal value still reaches a homeowner is through a third party who owns the equipment and passes it on. That is what a lease or a prepaid lease does.

This is why you should be sceptical of any quote that still shows a “price after the 30% federal credit” for a purchased residential system. That discount does not exist anymore, and a company still quoting it either has not updated its pricing or is hoping you have not noticed.

What you get either way

Several incentives do not care how the system is financed, and this surprises people:

NYC property tax abatement – 30% of eligible system cost, applied at 7.5% per year over four years, capped at $62,500 per year and $250,000 total. It follows the building, not the equipment owner, so the building owner receives it whether the system is bought or leased. This is the single most misunderstood point in NYC solar financing.
NYS solar equipment credit – 25% of installed cost, capped at $5,000. This one applies to both purchased and leased systems.
NYSERDA NY-Sun – a per-watt incentive paid to the contractor and passed through in your price either way.
Con Edison net metering – you get credit for exported power regardless of who owns the panels.

So the abatement, the state credit, NY-Sun and net metering are common ground. The federal piece is the only part that turns on ownership – and it now favours the party that is not you.

The honest case for buying

Buying still wins on some dimensions, and you should hear them:

You own the asset. After payback the electricity is genuinely free, with no monthly payment for the rest of the system’s life.
No escalator. A lease payment that rises annually is a cost you have accepted for twenty-odd years. A purchase has no such term.
Simpler home sale. An owned system transfers with the property. A leased system requires the buyer to assume the agreement, which occasionally complicates a closing.
No counterparty. You are not dependent on a finance company still being in business in year fifteen.

If you have the capital, a long horizon, and you value simplicity over the last few thousand dollars, buying is a perfectly rational choice. We will sell you a system on those terms without arguing.

The honest case for a prepaid lease

It is the only remaining route to federal value. The financing company claims 48E as the owner and passes that value through as a lower cost. On a purchase, that value simply does not exist for anyone.
$0 down. No capital outlay, which matters more than it sounds when the alternative is a five-figure cheque.
You still get the abatement. Because it follows the building.
Performance and maintenance sit with the owner, not with you, for the term.
Larger systems benefit more. The bigger the array, the more federal value there is to pass through – which is why the lease advantage is widest on big detached roofs in places like Todt Hill or Flatlands, and narrowest on a small row-house array.

Questions to get answered in writing – from anyone, including us

A lease is a long contract. The difference between a good one and a bad one is in terms that are easy to skim past, so ask for these in writing before you sign anything:

What is the term? Fifteen, twenty, twenty-five years?
Is there an annual escalator, and what is the rate? A payment rising 2.9% a year for twenty years is a very different deal from a flat one. If there is an escalator, ask what the payment is in year 20, not just year 1.
When can you buy the system out, and how is the price calculated? A prepaid lease that transfers ownership partway through is a genuinely different product from one that does not.
How much of the federal credit is actually passed through? “The lease company claims it” is not the same as “you receive the benefit of it.”
What happens when you sell the house? Assumption process, credit requirements for the buyer, and any transfer fee.
Who is responsible for the roof if it needs replacing during the term, and who pays to remove and reinstall the array?
What is the production guarantee, and what happens if the system underproduces?

Any installer who will not put those answers in writing has told you something useful.

How we quote it

We will model both routes on your actual numbers – your roof, twelve months of your Con Edison usage, and your property tax bill – and show you the two side by side rather than steering you. Specifically:

Cash purchase, with no phantom federal credit in the maths
$0-down and prepaid lease, with the term and any escalator stated plainly
The abatement and state credit applied correctly to whichever route you pick
An honest statement of which one comes out ahead for your situation, including when that is the purchase

For most NYC homeowners in 2026 the prepaid lease produces the better number, for the structural reason set out above. That is a consequence of the tax code changing, not a sales preference – and on a small roof with a long ownership horizon, buying can still win.

Get both options modelled on your roof – (718) 962-7699

Common questions

Is the 30% federal credit really gone?
For residential purchases, yes – Section 25D was repealed for systems placed in service after 31 December 2025. Section 48E still exists but only the system owner can claim it.

Do I lose the NYC property tax abatement if I lease?
No. The abatement follows the building, so the building owner receives it either way. This is the most common misunderstanding we correct.

Can I claim the NYS 25% credit on a leased system?
Yes – the state solar equipment credit applies to both purchased and leased systems, capped at $5,000.

What happens if I sell my house?
An owned system transfers with the property. A leased system needs the buyer to assume the agreement – ask for the specific process and any fees before signing.

Does a lease put a lien on my home?
Financing structures vary, and this is exactly the kind of term to have answered in writing. Ask us, and ask anyone else you are considering.

Get both routes modelled on your actual numbers

We will look at your roof, your twelve months of Con Edison usage and your property tax bill, then show you the purchase and the prepaid lease side by side with every incentive applied correctly – and tell you which one wins for you. If your roof is a poor candidate for either, we will say that instead.

Request your free side-by-side comparison – or call (718) 962-7699.

Related reading: our New York solar incentives overview, what solar actually costs in New York, and what a PPA is. Adding storage changes the arithmetic again – see solar battery storage in NYC.