Paying for Solar in Texas: Cash, Loan or Lease?

The short answer

Cash costs least. Berkeley Lab's national data put the median 2024 price of a home system at $3.50 a watt paid in cash and $4.70 a watt financed with a loan, partly because loan fees get rolled into the price. A lease avoids the upfront cost, but the company owns the panels and you pay it monthly for 15 to 20 years.

Whichever way you pay, compare the total you'll pay over the full term with what the panels will save you. Texas's solar disclosure form puts that total on line 5. There's no PACE financing for Texas homes, and since 2026 no federal tax credit to count on.

Paying cash

Paying cash gets you the lowest price and the simplest deal: no interest, no lien and nothing to transfer if you sell. On a 9 kW system, the national median cash price works out to about $31,500. Texas prices can be lower: Austin Energy customers paid $3.27 a watt on average in 2025. Our Texas cost guide has more.

Borrowing from your own bank or credit union, or against your home, is different from a solar loan sold along with the system. The CFPB notes that with general-purpose loans and home equity financing there's typically a clear line between the loan and the installation contract.

Solar loans, and the fees inside them

Many solar loans are arranged by the seller, through a lender it partners with. In 2024 the Consumer Financial Protection Bureau studied these "solar-specific" loans and found stated rates typically between 1% and 7% and terms of 8 to 25 years. It also found what those low rates can hide. Here's the CFPB's own example:

Cash price: $30,000What the system costs if you pay cash. The lender sends this to the installer.

Hidden fee: $9,000Often called a "dealer fee," "program fee" or "platform fee." The lender keeps it. CFPB found these typically run 10% to 30% of the cash price, sometimes over 50%.

Loan principal: $39,000What you borrow and repay with interest. The stated APR often leaves the fee out.

The CFPB found that some lenders' markups and fees raise the loan principal 30% or more above the cash price, and that lenders often don't show them as a markup. Some solar loans are secured by a lien on the panels; the CFPB notes such liens can muddy a home's title.

The fix is simple: ask for the cash price and the loan principal side by side. If they differ, the difference is a fee. TDLR's disclosure form has a line for it, "cost added for financing (seller's points)."

A pen resting on blank paperwork beside reading glasses on a wooden table

The tax credit trap

Until 2025, many solar loans were built around the 30% federal tax credit. The CFPB found it "commonplace" for solar-specific loans to reset to a higher monthly payment at the 19th month unless the borrower prepaid a large share, frequently 30% of the principal, the size of the credit.

The IRS says that credit doesn't apply to home systems placed in service after December 31, 2025. So if a loan offered to you today expects a big prepayment, ask where that money is supposed to come from, and what your payment becomes if you don't make it.

Leases and power purchase agreements

With a lease, the company owns the panels on your roof; Texas law treats it as the system's owner. The CFPB describes typical solar leases as 15 to 20 years with no down payment, with payments that often rise each year by a set amount. At the end, the company removes the panels. In a power purchase agreement, you pay for the electricity the panels make instead, at a set price that can also rise; the CFPB found PPA escalators of 1% to 5% a year and terms of 6 to 25 years.

What a yearly increase does to a payment over 20 years

1% a year

Year 1Year 20: +21%

3% a year

Year 1Year 20: +75%

5% a year

Year 1Year 20: 2.5 times

Year 20 compared with year 1, for increases of 1%, 3% and 5% a year, the range the CFPB found in power purchase agreements.

Texas law makes leases spell this out. Business & Commerce Code section 115.004 requires a lessor to give you in writing the term and rate of the lease, including any payment escalators, and whether the lease and any warranty can transfer to someone who buys your home. Power purchase agreements carry the same disclosures. Nationally, 43% of new home systems in 2024 were owned by a third party under a lease or similar deal, up from 26% in 2023, according to Berkeley Lab.

One Texas wrinkle: Austin Energy's battery payments don't apply to leased batteries.

A Texas couple at a kitchen island comparing two printed documents side by side with a calculator and a pen, warm evening light, faces turned away from the camera

Cash, loan or lease, side by side

	Cash	Loan	Lease
Who owns the panels	You	You	The company
Upfront cost	The full price	Depends on the loan	Typically none
What you pay	Once	Loan payments with interest	Monthly, often rising each year
Price you pay for the system	Lowest (median $3.50/W in 2024)	Higher (median $4.70/W, fees included)	Set by the lease
Lien	None	Some loans put a lien on the panels	Check the contract
At the end	You keep the system	You keep the system	The company removes the panels
Austin Energy battery payments	Can qualify	Can qualify	Leased batteries not eligible
Five-day right to cancel	Yes	Yes	Yes

Prices are Berkeley Lab's 2024 national medians. The five-day right to cancel covers home solar purchases and leases under Occupations Code 1806.156.

Not on the list: PACE. Texas's PACE law excludes residential property with fewer than five units, so nobody can put home solar on your property tax bill.

What to check on any offer

TDLR's Consumer Disclosure Statement, the two-page form Texas solar sellers use, has a line for each of the money questions. Read these before you sign:

Item 5
Total you'll pay
The sum of every payment for the full term. Compare this, not the monthly payment.
Item 6
Transaction type
Cash, financed purchase, lease, power purchase agreement, pre-paid PPA or energy service agreement.
Item 8
Financing and liens
Whether you got a federal Truth in Lending disclosure, who the lender is, and whether a lien can be placed on your home.
Item 11
Cost added for financing
The form has its own line for this, the "seller's points." A big number here is the hidden fee.
Item 12
Lease payments
The monthly payment, the number of months and whether the payments stay the same.
Item 18
Selling your home
Whether the contract can transfer to a buyer.

If the seller arranged or referred your loan, the contract must require the lender to cancel it if you cancel within five business days. See how to cancel and how to check the seller.

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Common questions

What's the cheapest way to pay for solar in Texas?

Cash. Berkeley Lab's national data put the median 2024 price of a home system at $3.50 a watt paid in cash and $4.70 a watt financed with a loan, partly because loan fees are rolled into the price.

What is a solar dealer fee?

A fee a solar lender adds to the loan principal on top of the system's cash price, also called a program, platform or finance fee. The Consumer Financial Protection Bureau found these typically run 10% to 30% of the cash price and can exceed 50%, often without being shown as a markup.

Is there still a federal tax credit for solar in 2026?

Not for home systems. The IRS says the 30% residential clean energy credit doesn't apply to systems placed in service after December 31, 2025. Check whether any loan you're offered still assumes a large prepayment that used to come from the credit.

Can I use PACE financing for solar in Texas?

Not for a house. Texas's PACE law, Local Government Code chapter 399, excludes residential property with fewer than five dwelling units.

What happens to a solar lease if I sell my house in Texas?

It depends on the lease. Texas Business & Commerce Code section 115.004 requires the lessor to tell you in writing whether the lease and any warranty can transfer to a buyer, and TDLR's disclosure form asks the same question on line 18.

Who owns leased solar panels in Texas?

The leasing company. Texas Utilities Code 39.916 treats a third party that owns a system on your property as its owner. The CFPB notes that at the end of a typical lease, the company removes the panels.

Berkeley Lab prices are national medians before incentives; your quote will differ. Not financial or legal advice. Sources: Lawrence Berkeley National Laboratory, 2025 data update · CFPB Issue Spotlight: Solar Financing, August 2024 (PDF) · IRS FAQs on the 2025 changes to section 25D · Business & Commerce Code chapter 115 · Utilities Code 39.916 · Local Government Code chapter 399 (PACE) · Occupations Code chapter 1806 · TDLR Consumer Disclosure Statement (PDF) · Austin Energy: Power Partner Battery. Reviewed October 2026.

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