Owned, Financed, Leased, or Prepaid: Insights on Phoenix Solar Options

By Rob Madden

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Phoenix’s consistent sunlight offers an unmatched opportunity for homeowners to harness solar energy. Over the years of expertise in Phoenix real estate, there’s been a noticeable increase in homes transitioning to solar. There are four types of solar options in Phoenix: Owned, Financed, Leased, or Prepaid.

1. Owned Solar Systems:

An “owned solar system” refers to a solar power system that has been fully purchased and is the outright property of the homeowner. Unlike leased or financed systems, where the homeowner might be making monthly payments or where the system might be owned by a third party, an owned solar system adds value to the home because there are no liens or future financial commitments tied to it. The homeowner enjoys the full benefits of the system, including all generated electricity and potential tax incentives, without any associated ongoing costs or contractual obligations to solar companies or financiers.


  • Value Boost: Homes with owned systems consistently achieve higher market values. Buyers understand the long-term benefits of properties equipped with owned solar panels.
  • Tax Perks: Owning solar systems qualifies homeowners for enticing federal tax credits and local incentives.
  • Zero Monthly Payments: Once the system is owned, the monthly savings can be pure.


  • Initial Investment: The upfront cost can be a significant factor.
  • Maintenance Responsibilities: Maintenance, though minimal, is a homeowner’s responsibility.

2. Financed Solar Systems:

A “financed solar system” refers to a solar power system that a homeowner acquires through a loan or financing agreement, rather than paying for it outright. In this arrangement, the homeowner borrows money from a lender or financial institution, or sometimes directly from the solar provider, to cover the cost of purchasing and installing the solar panels and related equipment. The homeowner then makes monthly payments over a set period to repay the loan, typically with interest. Once the loan is fully repaid, the homeowner owns the solar system outright. During the loan term, the homeowner can benefit from the electricity generated by the system and may also be eligible for tax incentives or rebates. When it comes to selling the property, it’s important to consider the outstanding balance of the solar loan, as it might need to be settled or transferred to the new owner.


  • Affordable Entry: Financing allows homeowners to access solar benefits without a substantial initial cost.
  • No Down Payment Offers: Some financing options are remarkably attractive with zero down.
  • Ownership Perks: After settling the loan, the system becomes a part of the property, with all attendant benefits.


  • Interest Additions: Financing naturally means additional interest charges.
  • Duration: Some solar loans can span a couple of decades.

3. Leased Solar Systems:

A “leased solar system” refers to a solar power arrangement where the homeowner does not own the solar panels and related equipment outright. Instead, the homeowner enters into a contract with a solar provider to “rent” the solar system, typically paying a monthly lease fee. Under this agreement, the solar company usually handles the installation, maintenance, and any necessary repairs without upfront costs to the homeowner. While the homeowner benefits from the generated electricity and potential reductions in energy bills, they do not receive the full benefits of system ownership, such as tax incentives. Additionally, when selling the property, the homeowner must typically transfer the solar lease to the new owner or buy out the remaining lease, which can impact the sales process.


  • Initial Cost Savings: Many leases come without any initial cost.
  • Maintenance Coverage: The leasing company typically takes care of any upkeep.
  • Predictable Payments: Monthly lease payments remain consistent, aiding budgeting.


  • No End-Ownership: At the end of the lease term, the system has to be returned, unless a buyout is opted for.
  • Missed Tax Benefits: Tax credits go to the leasing companies.
  • Potential Selling Challenges: Homes with a leased solar system often require an additional step during the selling process, like lease transfers, which some buyers might find challenging.

4. Prepaid Solar Leases:

A “prepaid solar lease” refers to an arrangement where a homeowner pays upfront for the right to use a solar power system over the duration of a lease agreement, typically ranging from 15 to 25 years. Instead of monthly lease payments, the homeowner makes a single, lump-sum payment at the beginning of the lease term. The solar panels and related equipment are owned and maintained by a third-party provider, not the homeowner.

While the homeowner benefits from the electricity generated by the system, they usually do not receive tax credits or incentives that come with system ownership. However, they do avoid ongoing monthly lease payments. At the end of the lease term, the homeowner may have options to renew the lease, purchase the system at a reduced cost, or have the system removed. When selling the property before the lease term ends, the prepaid lease agreement typically needs to be transferred to the new owner, which can influence the sales process.


  • No Monthly Reminders: Prepaying does away with monthly bills.
  • Long-Term Savings: Over time, prepayment can be more economical than regular lease payments.
  • Maintenance Inclusion: As with leasing, maintenance is typically included in the deal.


  • Upfront Payments: Even if it’s less than an outright purchase, it’s still a significant amount (unless someone is paying it for you).
  • No Ownership: There’s no end-of-term ownership unless a buyout option is available.


Solar power’s influence on the Phoenix real estate scene is undeniable. Having championed the integration of solar in homes and observed its impact on property value and appeal, it’s clear that understanding the chosen acquisition method, especially in future scenarios like selling, is crucial.

Many homeowners, initially daunted by the choices, found clarity and confidence after understanding the details. Whether deliberating over which solar options in Phoenix are best or pondering over solar’s influence on property value in the Phoenix market, the insights presented here aim to guide homeowners through an informed solar journey.

Rob Madden

About the author

Rob Madden is an experienced real estate broker in the Phoenix metro area, having worked in the industry for over 28 years. He has helped many home buyers and sellers navigate the local real estate market, and is considered a trusted expert in the field. Rob is committed to making the buying or selling process as seamless and straightforward as possible for his clients, and provides hands-on assistance at every stage of the transaction. In his free time, Rob enjoys being a Scoutmaster for a local Scouts BSA troop, hiking, backpacking, photography, and playing pinball.

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