Solar Answers → Buying & Financing
Should you lease or buy solar in Illinois in 2026?
Neither wins outright in 2026 — the structures split the incentives. Buying (cash or loan) gets no federal credit anymore, but earns the $20/REC ownership adder and the utility rebates. Leases and PPAs may still carry federal §48E value to their owner — reaching you only through pricing — and bring escalators and at-sale obligations. The full-term math, in writing, decides it.
Independent public sources we cite and link — The Day Company is not affiliated with or endorsed by any of them.
What changed about this decision in 2026?
The federal credit flip rewired it. Through 2025, buying earned a 30% federal credit plus every state advantage — ownership usually won on paper. In 2026, cash and loan purchases get no federal credit at all, while some third-party-owned offers may still carry §48E value to their owner. The state incentives, meanwhile, still favor owning. The structures now split the benefits.
That's why the pre-2026 rules of thumb — in either direction — are dead. "Always buy, the credit pays you back" no longer describes the purchase path; "leases are a ripoff" ignores that TPO is now the only structure with a possible federal lane. What's left is a structure-by-structure ledger and the full-term math on your specific offer. This page is the ledger; the math is yours to demand — see whether solar is worth it in Illinois at all for the value side.
How do cash, loan, lease, and PPA actually compare?
Four structures, one grid of consequences. Cash and loan mean you own the system — the $20/REC adder, the rebates, and the resale premium research points to. Lease and PPA mean a third party owns it — possible §48E value, typically $0 down, plus escalators and at-sale obligations. Here's the whole picture in one table.
| Cash | Loan | Lease | PPA | |
|---|---|---|---|---|
| Who owns the system | You | You | Third party | Third party |
| What you pay | Full price upfront | Monthly payment — demand the cash price and financed total separately | Fixed monthly rent for the equipment | Per-kWh price for the system's output |
| Federal credit in 2026 | None — §25D expired December 31, 2025 | Possible §48E value to the owner if the project qualifies — ask which lane, in writing; any benefit reaches you only through pricing | ||
| Illinois Shines REC price (≤10 kW) | Base + $20/REC adder: $100.77 ComEd · $90.37 Ameren | Base price, to the owner: $80.77 ComEd · $70.37 Ameren — pass-through via pricing | ||
| Utility rebates ($300/kW · $300/kWh) | You claim them — you own the equipment | The owner claims them — the contract decides who that is and what reaches you | ||
| Escalators | — | Fixed by loan terms | Common — annual increases written into the contract; model the full term | |
| Maintenance | You (warranties apply) | Typically the owner/provider | ||
| At home sale | Transfers with the house; any lender UCC-1 addressed at closing | Assumed by the buyer or bought out; provider's UCC-1 addressed at closing | ||
| The number to demand | Cash price per watt, all fees in | Cash price AND full financed total, side by side | Full-term rent schedule, escalator included | Full-term per-kWh table, escalator included |
What exports earn is the same regardless of structure — supply-side credits under the post-2024 rules, which is its own decision input: ComEd netting · Ameren Illinois netting.
Who still gets federal credit value in 2026?
Only third-party owners — conditionally. The residential credit (§25D) doesn't apply to expenditures after December 31, 2025, and the IRS counts an expenditure as made when installation is completed — so a system finished in 2026 doesn't qualify even if you paid in 2025. The §48E credit for lease/PPA systems belongs to the company that owns the system, not to you.
§48E runs on two lanes: projects that began construction on or before July 4, 2026 generally have longer placed-in-service runway — 2026 starts generally through 2030 — while projects that didn't must generally be in service by December 31, 2027 under the tightened beginning-of-construction rules of IRS Notice 2025-42. There's no way to tell from the outside which lane an offer sits in, or whether any of that value actually reaches your monthly rate. So the question is fixed: "Does this specific project still qualify under §48E — which lane — and will you state it in writing?" A 2026 cash or loan quote claiming "the 30% federal credit" is wrong on day one; full breakdown: did the solar tax credit end?
Which structure wins the Illinois incentives?
Ownership — on both counts. Customer-owned systems earn the $20-per-REC adder: $100.77 per REC in ComEd territory and $90.37 in Ameren territory on the ≤10 kW tier, versus the base $80.77 and $70.37 for third-party-owned. And Illinois law directs the utility rebates to the equipment's owner — on a lease or PPA, that's typically not you.
Two caveats keep this honest. First, under the CRGA the REC money goes to the Approved Vendor either way — 50% at energization, the remainder ratably over the subsequent six years — and typically reaches you as a lower contract price, so the adder's value shows up in pricing you should demand in writing, not a bigger check. How the whole mechanism works: Illinois Shines, explained. Second, on the rebates, Ameren says it plainly: if you lease, refer to your contract to see who can claim it. The battery side carries its own required-rate fine print regardless of structure: the Illinois battery rebate, explained.
How do you compare the actual money?
By refusing the monthly-payment comparison. A loan's payment can hide a dealer fee that raises the true price well above cash; a lease or PPA's year-one rate can hide an escalator that compounds for twenty-plus years. The honest comparison is totals — the cash price, the full financed total, and the full contract term, in writing.
A lower monthly payment is not a lower price. Solar loans commonly embed dealer fees that raise the financed price substantially above the cash price. Ask for both numbers, separately — the gap between them is the true cost of the money.
And a year-one PPA rate is not the contract. Escalators compound annually for the full term; a rate that looks attractive in year one can exceed utility prices later if the escalator outpaces utility increases. Model year 20, not year 1, and get the total-cost table in writing.
- Normalize purchases to cash price per watt, every fee included — the only apples-to-apples number across bids.
- Normalize TPO offers to total contract cost — every year's payment, escalator applied, summed. If the seller won't produce that table, the comparison is over.
- Same production model on every bid: your roof, your 12-month usage, supply-only netting — not a generic savings curve.
- No payback promises, from anyone. Payback depends on your usage, self-consumption, rate path, and terms. Compare each bidder's assumptions, never their conclusions.
What happens when you sell the house?
Owned systems transfer with the house — and national research, including Lawrence Berkeley National Laboratory studies, finds buyers pay a premium for homes with owned solar; leased systems don't show the same effect. A lease or PPA must be assumed by your buyer or bought out, and any UCC-1 fixture filing gets addressed at closing.
The practical difference is who has leverage at the closing table. An owned system is an asset you hand over with the interconnection approval, warranties, and PTAX-330 record. A TPO agreement is an obligation your buyer must qualify for and accept — or you buy it out. Neither is automatically disqualifying; both reward surfacing the agreement early in the sale instead of discovering it in escrow. If you might move within the contract term, read the assumption and buyout clauses before signing, not when the listing goes up.
What must be in writing before you sign — either way?
Seven things, on paper, before any structure gets your signature. The IPA-required Illinois Shines Disclosure Form for your specific structure anchors the set — if the form and the pitch differ, believe the form. And if a seller resists putting any of these in writing, that reluctance is itself the answer.
- The Disclosure Form — provided before signing, matching the pitch on size, projected production, price, and terms.
- The Approved Vendor's name — and verify it on the program's official list.
- The REC pass-through in dollars — exactly how Illinois Shines value (adder included, if you're buying) reaches your price.
- Any federal claim by code section and lane — for TPO, whether this project qualifies under §48E and how that reaches your rate.
- Cash price and financed total, side by side — or the full-term payment/per-kWh table with the escalator applied.
- Rebate handling — who files, who receives, and (for batteries) which qualifying rate you're being enrolled in.
- Warranties and roof coverage — module, inverter, workmanship, penetrations — plus the assumption/buyout terms if it's TPO.
Lease vs. buy FAQ
Is it better to lease or buy solar in Illinois?
Neither, universally. Ownership earns the $20/REC adder, the utility rebates, and the resale premium research supports; third-party offers may carry §48E value, typically with $0 down, plus escalators and at-sale obligations. The full-term math on your specific offer decides it, case by case.
Does buying solar get a federal tax credit in 2026?
No. The residential credit (§25D) doesn't apply to expenditures after December 31, 2025, and the IRS counts an expenditure as made when installation is completed — so a system finished in 2026 doesn't qualify even if it was paid for in 2025.
Can a lease or PPA still carry federal credit value?
Sometimes. The §48E credit belongs to the system's owner, under two lanes — projects that began construction on or before July 4, 2026 generally have runway through 2030; newer projects generally must be in service by December 31, 2027. Ask which lane, in writing; any benefit reaches you only through pricing.
What's the difference between a solar lease and a PPA?
A lease charges fixed monthly rent for the equipment; a PPA charges a per-kWh price for the system's output. Both are third-party-owned, both commonly carry annual escalators and a UCC-1 fixture filing, and both must be assumed or bought out when you sell.
Who gets the $20/REC customer-owned adder?
Only customer-owned systems — cash or loan. On the ≤10 kW tier that stacks to $100.77 per REC in ComEd territory and $90.37 in Ameren territory, versus the base $80.77 and $70.37 that third-party-owned systems earn for their owner.
Who claims the utility rebates on a lease or PPA?
The equipment's owner — Illinois law specifies the owner of the generator, battery, and inverter applies for and receives the rebate. On a lease or PPA that's typically the provider; Ameren directs leased customers to their contract to see who can claim it.
What is a PPA escalator?
A contractual annual increase in your per-kWh price (or lease payment). It compounds for the full term, so a rate that looks attractive in year one can exceed utility prices later if the escalator outpaces utility increases. Demand the full-term total-cost table in writing.
What happens to a solar lease when I sell my home?
The agreement must be assumed by your buyer or bought out, and any UCC-1 fixture filing is addressed at closing. Owned systems transfer with the house instead — keep the interconnection approval, warranties, and PTAX-330 record for the buyer, and surface any agreement early in the sale.
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Sources
- IRS — FAQs on P.L. 119-21 (§25D expiration; §48E guidance)
- 26 U.S.C. §25D · Congressional Research Service, IN12611
- Illinois Shines — Program Documents & Final 2026–27 REC Prices
- Illinois Shines — DG Disclosure Form guide · Consumer FAQs · Approved Vendors & Designees
- IPA — Consumer Protection Requirements (PDF)
- Ameren — Customer-Owned Solar (rebate ownership; leased systems → contract)
- ComEd — Solar Rebates
- Lawrence Berkeley National Laboratory — solar home-value research