Solar Lease vs Loan in India: Which Saves You More?

For most Indian homeowners, buying with a solar loan is better than leasing. Over 25 years, a loan-financed purchase saves ₹2,00,000–₹5,00,000 more than a lease because you own the system and claim the PM Surya Ghar subsidy (₹78,000). Leasing makes sense only if you want zero investment, zero maintenance and are willing to accept lower total savings in exchange for hassle-free operation.

In a solar lease (also called RESCO or OPEX model), a third-party company installs panels on your roof at zero cost and sells you the electricity at a pre-agreed rate.

1. A solar company surveys your roof and proposes a system size
2. They install, own, and maintain the system — you pay nothing upfront
3. You buy the generated electricity at ₹3–₹5/unit (vs ₹6–₹12/unit DISCOM rate)
4. Contract runs for 15–25 years with annual rate escalation of 1–3%
5. At contract end, you may buy the system at residual value or the company removes it

Leasing is more common for commercial installations but is increasingly available for residential systems above 3kW.

With a solar loan, you borrow to buy the system, own it from day one, and repay through EMIs.

1. Get quotes from verified installers via Solar Vipani
2. Apply for a solar loan (SBI at 7%, HDFC at 8.5%, etc.)
3. Installer installs the system; bank disburses to installer
4. You pay EMIs for 3–10 years (typically less than your electricity bill)
5. After loan repayment, electricity is completely free for 15–20+ remaining years
6. PM Surya Ghar subsidy (up to ₹78,000) is credited to your account post-installation

Despite the lower total savings, leasing is the right choice in specific situations:

• Commercial buildings with large roofs — The RESCO model for 50kW+ installations eliminates capex and maintenance overhead. Companies prefer opex-based solar for balance sheet benefits.
• Renters — If you do not own the property and the landlord agrees to a lease arrangement, you save on electricity without investing in an asset attached to someone else's property.
• Zero hassle priority — The leasing company handles all maintenance, inverter replacements, monitoring, and DISCOM coordination. You just pay a bill.
• Short-term residents — If you plan to move within 5–7 years, a lease avoids the complexity of selling or transferring an owned system.
• Poor financing access — If you cannot qualify for a solar loan and installer EMI is not available, leasing provides an alternative route to solar savings.

A solar loan purchase is the better option when:

• You own your home — You will benefit from the full 25-year savings without lease payments eating into your returns.
• You qualify for PM Surya Ghar — The ₹78,000 subsidy is only available to system owners, not lessees. This alone shifts the math decisively in favour of buying.
• You plan to stay long-term — If you will live in the home for 10+ years, ownership delivers far greater value.
• You can get a solar loan at 7–10% — At these rates, the EMI is competitive with lease payments but with the massive advantage of eventual ownership.
• You want to increase property value — An owned solar system adds value to your property. A leased system can actually complicate resale since the buyer inherits the lease contract.

Lease risks:

• Long lock-in period (15–25 years) with early exit penalties
• Annual rate escalation (1–3%) reduces savings over time
• Company bankruptcy risk — who maintains the system if the lessor goes under?
• Roof access restrictions during the lease period
• Complicates property sale — buyer must accept lease transfer

Loan risks:

• EMI obligation regardless of system performance (mitigated by warranty)
• Maintenance responsibility and costs (₹2,000–₹5,000/year)
• Inverter replacement at year 10–12 (₹15,000–₹30,000)
• Interest cost if you choose a long tenure

For most homeowners, the loan risks are manageable and well-compensated by the far higher returns.

Start by getting quotes from verified installers who can model both purchase and lease scenarios for your specific situation. Understanding your actual savings under each option makes the decision straightforward.

Get free solar quotes with financing comparison →