Commercial Solar Financing: Loan vs Lease vs PPA
Ferrius Energy · 2026-05-28 · 6 min read
Cash, loan, lease, or PPA: each structure changes who owns the system, who claims the incentives, and what your payback looks like.
The four options
A cash purchase gives you full ownership, the fastest payback, and the right to claim the ITC and depreciation directly. A commercial solar loan spreads the cost while keeping ownership. A capital lease and a Power Purchase Agreement (PPA) both reduce or remove the upfront cost, with different ownership and tax treatment.
How to choose
The right structure depends on your balance sheet and tax appetite. If you can use the tax benefits, ownership through cash or a loan usually delivers the strongest return. If you prefer no capital outlay, a PPA lets you buy the power at a set rate while a third party owns the system.
There is no universally best answer, only the best fit for your finances. The trade-off is always upfront cost against long-term return and control.
What to confirm
Whatever the structure, confirm who claims the ITC and depreciation, what happens at end of term, and how maintenance is handled. Those three points separate a good deal from a costly one.
Key takeaway. Ownership and tax position drive the decision. Model each structure against your real numbers before signing anything.