Solar Lease Buyout Calculator

How to decide whether to buy out a solar lease

• The core question: is it cheaper to pay the buyout today, or to keep making lease payments for the rest of the term? To compare fairly, you discount future lease payments to today's dollars using a discount rate that reflects what you could otherwise do with the money.
• NPV of remaining lease payments = sum of each future payment ÷ (1 + discount rate)^year. If this NPV exceeds the buyout offer, buying out saves money in present-value terms.
• Annual escalator: most solar leases include an annual payment increase (often 2–3.9%). This makes the buyout more attractive over longer remaining terms, because future payments are higher in nominal terms.
• After the buyout, you own the panels. You can sell them with the house at full value (rather than requiring a buyer to assume the lease or pay a transfer fee), and you capture all future energy production with no further payments.
• Residual value is not modelled here. If the panels still have meaningful production life after the lease ends, ownership has value the calculator does not capture — which strengthens the case for buying out.

Selling a house with leased solar panels

Leased solar panels complicate home sales. The buyer must either assume the lease (meaning they inherit your payments and are subject to the installer's credit check) or you must buy out the lease before closing. Many buyers and lenders are unwilling to assume a solar lease, especially if the remaining term is long and the payments are high relative to the energy savings. Installers — SunPower, Sunrun, Tesla Energy, Sungevity — typically offer a buyout price at closing; this calculator helps you evaluate whether that price is fair relative to your remaining payment stream.

Frequently asked questions

What discount rate should I use?

Your discount rate reflects the opportunity cost of the buyout money — what you could earn or save elsewhere. Common choices: your mortgage rate (the buyout is like paying down a debt at that rate), a safe savings yield (4–5% in 2025), or a personal hurdle rate for investments. A lower discount rate makes the buyout look better (future payments are worth more today); a higher rate makes the lease look better.

Can I negotiate the buyout price?

Yes, and you should. Installers set buyout prices algorithmically and often leave room to negotiate, especially if you are selling a home and the deal is time-sensitive. Get a quote from the installer, then use this calculator to determine a fair NPV counter-offer. If you are at least a year from the lease end, the buyout price typically falls each year as the remaining payments decrease.

What happens to the panels when the lease ends?

Lease terms vary. Most installers offer to extend the lease at a reduced rate, offer to sell you the system at fair market value (typically very low after 20–25 years), or remove the panels at no charge. Read your specific agreement. If you are planning to own the home long-term, a buyout during the lease often beats waiting — you lock in the energy savings for the remaining life of the panels without further payments.

Does a solar lease affect my home sale price or mortgage?

A leased solar system is a liability — the new buyer must assume it, pay it off, or the seller must resolve it. Some buyers discount the purchase price for the remaining lease obligation. Some lenders (especially FHA and VA) have restrictions on properties with solar leases. Getting the lease off the property before listing reduces complications and may make the home more attractive to a broader buyer pool.

Formulas last reviewed October 20, 2026. Results are estimates for educational use; not financial advice. Methodology →