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Buying vs leasing solar panels in Hawaii comes down to one question: who owns the system? When you buy, with cash or a solar loan, you own the panels, you claim Hawaii’s 35% state tax credit, and every dollar of savings stays with your household. When you lease, a solar company owns the equipment, claims the incentives, and charges you a monthly payment for the privilege of using it. Leasing can lower the upfront hurdle, but for most Hawaii homeowners with the ability to finance, ownership saves significantly more over the life of the system. This guide from ProVision Solar, which has served homeowners on Oahu, Maui, and the Big Island since 1998, compares the two on the factors that decide the long-term outcome.
Buying vs Leasing Solar Panels: What Is the Real Difference?
The real difference between buying vs leasing solar panels is ownership, and ownership decides who keeps the incentives, the savings, and the equipment’s value. Buying means you own the system outright, either by paying cash or by financing it with a solar loan. Leasing, along with its close cousin the power purchase agreement, means a third-party company owns the system on your roof and you pay that company a fixed monthly fee or a per-kilowatt-hour rate for the power it produces.
Buying vs Leasing Solar Panels at a Glance
- Upfront cost: buying with cash requires the full system price, buying with a loan can require little or nothing down, and leasing usually requires little or nothing down
- Hawaii state tax credit: goes to the owner, which is you when you buy and the leasing company when you lease
- Monthly cost: owners pay a loan payment that ends, or nothing after a cash purchase; lessees pay the lease for the full contract term, sometimes with annual increases
- Maintenance: owners are responsible for upkeep, while lease contracts typically assign it to the leasing company
- Home sale: an owned system transfers with the house, while a lease must be transferred to a qualifying buyer or bought out
- Long-term savings: owners keep all savings once the system is paid off, while lessees share savings with the leasing company for the life of the contract
Who Gets Hawaii’s 35% Solar Tax Credit When You Lease?
When you lease, the leasing company generally gets Hawaii’s 35% solar tax credit, not you. Only the economic owner of a photovoltaic system may claim the credit, and a lessor may claim it for a system it owns and leases to a homeowner, per Hawaii Department of Taxation Tax Facts 2022-2, revised May 2025. The same guidance caps the credit at $5,000 per system for single-family residential property.
That credit carries more weight than it used to. The federal residential clean energy credit ended for systems placed in service after December 31, 2025, per the IRS, which makes the state credit the centerpiece of homeowner incentives in Hawaii. A homeowner who finances with a solar loan is still the owner and still claims it. Combined with utility programs and smart financing, ownership is how many Hawaii households Save Up To 40% on their system. Nuances such as whether a contract labeled a lease is actually a sale for tax purposes can change who the economic owner is, so confirm your situation with a tax professional.
Which Saves More Over the Life of the System?
Buying saves more over the life of a solar system for most Hawaii homeowners because owners keep every dollar of savings once the system is paid off. The average Hawaii homeowner who goes solar saves about $55,978 over 25 years, with a payback period of about 9 years and system lifespans of 25 to 30 years, per 2026 data from EnergySage. After payback, an owned system produces power at essentially no cost for the remaining decade or more.
Those savings are large because the electricity being replaced is so expensive. Hawaii homes paid an average of 42.86 cents per kilowatt-hour in 2024, the highest residential price in the country, per the U.S. Energy Information Administration. With a lease, part of that avoided cost flows to the leasing company every month for the full contract, and some leases add annual payment escalators that shrink the gap between your lease payment and the utility rate over time.
When Leasing Can Still Make Sense
Leasing is not always the wrong answer. It can fit a homeowner who has little state tax liability to absorb the credit, cannot qualify for a solar loan, or strongly prefers that a third party handle maintenance. For everyone else, Residential Financing often delivers the low upfront cost people want from a lease while keeping ownership, the credit, and the long-term savings in the household.
What Happens to Owned vs Leased Solar When You Sell Your Home?
An owned solar system transfers to the buyer with the house and can add value, while a leased system must be transferred through the leasing company or bought out. Homes with solar energy systems sold for 4.1% more on average than comparable homes without solar, per a 2019 analysis from Zillow. That premium is tied to ownership: buyers value a paid-off system that lowers their future bills.
Leased systems add steps to a sale. The buyer usually has to apply with the leasing company, meet its credit requirements, and agree to take over the remaining payments. If the buyer declines, the seller may need to buy out the lease or negotiate other terms, which can complicate escrow timing. Owners with an outstanding solar loan typically pay it off at closing from sale proceeds, much like other home-related debt, so check your loan terms before listing.
A Residential Solar Installation that you own keeps these decisions in your hands. Not sure which path fits your budget? Ask our team to compare options for your home.
Frequently Asked Questions
Is it better to buy or lease solar panels in Hawaii?
For most Hawaii homeowners, buying is better because the owner claims the state’s 35% tax credit and keeps all long-term savings. Leasing can work for households that cannot finance or use the credit, but lessees share their savings with the leasing company for the full contract term.
Can I claim the Hawaii solar tax credit if I lease my panels?
Generally, no. Hawaii’s Department of Taxation allows only the economic owner of a solar system to claim the credit, and a leasing company that owns the system can claim it. If a contract called a lease is actually a sale for tax purposes, the homeowner may be the owner.
Does financing solar with a loan count as buying?
Yes. A solar loan makes you the owner of the system from day one, so you claim the Hawaii state tax credit and keep the savings. The loan payment ends when the balance is paid, while a lease payment continues for the entire contract.
Is it harder to sell a house with leased solar panels?
It can be. The buyer typically must qualify with the leasing company and agree to take over the payments, or the seller may need to buy out the lease. An owned system simply transfers with the home and has been linked to higher sale prices.
Choose the Option That Builds Equity
Buying vs leasing solar panels in Hawaii is really a choice about who captures the value of your roof. Ownership brings the 35% state credit, the full lifetime savings, and a system that adds appeal when you sell. ProVision Solar has helped Hawaii families on Oahu, Maui, and the Big Island own their energy since 1998, handling permitting and state incentive paperwork along the way. Contact Us Today for a side-by-side comparison built on your real electric bills.
Information pertaining to laws, regulations, or incentives is accurate at the time of writing this content. However, regulations and systems can change at anytime.