Solar PPA vs. Ownership in DC and Maryland: How the Structures Differ
Short answer: with ownership (cash or loan), you own the equipment, you are responsible for it as your contract and warranties define, and you keep the incentives and SRECs the law and your contracts assign to the system owner. With a lease or Power Purchase Agreement (PPA), a third party owns the equipment on your roof, that owner typically handles maintenance as the contract defines, and the owner generally retains owner-side incentives. Neither structure is universally better. The right choice depends on your finances, your roof, how long you plan to stay, and the specific contract in front of you.
By the Next Gen Solar editorial team · Published July 21, 2026 · Last reviewed July 21, 2026
The four common structures
Residential solar in DC and Maryland is generally arranged one of four ways. The labels vary between companies, but the underlying questions are always the same: who owns the equipment, who pays for it and when, and who keeps the incentives.
| Structure | Who owns the equipment | How you pay | Typical incentive position |
|---|---|---|---|
| Cash purchase | You, from day one | Full price upfront | Owner-side incentives and SRECs generally go to you, subject to the rules of each program and your contracts |
| Solar loan | You (the lender holds a security interest until payoff) | Monthly loan payments; terms vary by lender | Same general position as a cash purchase; confirm whether the lender places any lien or fixture filing on the system or property |
| Solar lease | The leasing company | A contracted monthly lease payment, which may include an escalator | The owner generally retains owner-side incentives and SRECs unless the contract assigns them differently |
| Power Purchase Agreement (PPA) | The PPA provider or project entity | You pay for the electricity the system produces at a contracted rate; some PPAs, including $0 PPAs, involve no solar payment under the agreement | The owner generally retains owner-side incentives and SRECs unless the contract assigns them differently |
A lease charges a fixed payment for having the system; a PPA charges based on what the system actually produces. Some PPA structures, including the $0 PPA offered on qualifying DC roofs, involve no upfront cost and no solar payment under the agreement, with the project owner monetizing the system through incentives and SRECs. Utility charges remain your responsibility under any structure.
Maintenance and repairs: contract-defined, not automatic
A common shorthand says "with a PPA the company handles everything." That is usually the intent, but the accurate statement is that maintenance responsibility is defined by the contract. Before signing anything, read the maintenance, insurance, and repair sections and confirm in writing:
- Who monitors production, and what happens when output drops below expectations
- Who pays for inverter replacement, which is the component most likely to need service during a 20-plus year system life
- Who carries insurance on the equipment, and how roof damage attributable to the installation is handled
- Whether panel removal and reinstallation for a future roof replacement is covered, and at what cost
- What service response commitments, if any, the contract actually states
With ownership, these responsibilities fall to you, backed by whatever manufacturer and workmanship warranties apply. Warranty terms differ by manufacturer and installer, so compare the documents rather than assuming a standard.
How your bills change under each structure
Under every structure you remain a utility customer. Distribution charges, fixed customer charges, and any electricity you draw from the grid beyond what the system offsets stay on your utility bill. What changes is the second payment stream:
- Cash purchase: no second payment; your utility bill reflects net metering credits per your utility's tariff
- Loan: a fixed loan payment, independent of how much the system produces
- Lease: a fixed lease payment, independent of production; check for annual escalators
- PPA: a payment tied to actual production at the contracted per-kWh rate, or no solar payment under a $0 PPA structure
No specific savings amount can be promised under any structure. Savings depend on your roof, your usage, your utility's rates and tariff, and the contract terms. Treat any guaranteed-savings claim with caution and ask for the assumptions in writing.
Incentives and SRECs follow ownership and contract terms
Incentive eligibility is set by law and program rules, and allocation between you and a solar company is set by contract. Two points matter most for DC and Maryland homeowners deciding in 2026:
First, per IRS guidance on the Residential Clean Energy Credit, the federal residential credit is not available for property placed in service after December 31, 2025. Homeowners purchasing a system now should not count on that residential credit and should consult a tax professional about what, if anything, applies to their situation under current law.
Second, Solar Renewable Energy Certificates (SRECs) belong to whoever the applicable program rules and your contract say they belong to. Under leases and PPAs, the system owner generally retains them. Under ownership, they are typically yours to register and sell, and DC and Maryland operate separate SREC markets with different prices that fluctuate with market conditions. Whatever structure you choose, get the SREC allocation in writing before signing.
Selling or transferring your home
Every structure has a home-sale story worth understanding before you sign, not at the closing table:
- Owned systems generally convey with the house like any fixture; loan payoff terms depend on the lender
- Leases and PPAs typically offer transfer to a qualified buyer, buyout options at defined points, or prepayment; the specifics are contract terms, so read them
- Ask whether the provider records a UCC-1 fixture filing or similar notice, and how it is released or transferred at sale
- Ask what happens if a buyer declines to assume the agreement
Due-diligence checklist before signing anything
- Get the full contract, not a summary, and read the term length, escalators, and end-of-term options
- Confirm in writing who owns the equipment and who receives each incentive and the SRECs
- Confirm maintenance, insurance, inverter replacement, and roof-related responsibilities
- Ask for the production estimate and the assumptions behind it
- Confirm what happens on home sale, early termination, and system underperformance
- Verify the installer's licensing with the relevant DC or Maryland authority
- Check current incentive program status with the official sources linked below, since rules and funding change
- For tax questions, consult a tax professional; solar companies cannot give tax advice
If you want to see how a specific structure would look on your roof, our DC page explains the $0 PPA we offer on qualifying DC roofs, and our Maryland page covers purchase, loan, and PPA proposals.
Sources and update policy
This guide was written by the Next Gen Solar editorial team and last reviewed on July 21, 2026. Programs, agency procedures, utility requirements, and incentive rules change. Before relying on any statement here, verify current eligibility and requirements with the primary sources below or with the relevant agency or utility.
- IRS: Residential Clean Energy Credit · Federal guidance on the residential credit, including the rule that it is not available for property placed in service after December 31, 2025.
- Maryland Energy Administration: Maryland Solar Access Program · Official program page; funding rounds and status change, so check current availability there.
- DC Department of Buildings: Energy and Green Building, Solar · DC permitting authority for residential solar work.