Solar leasing companies in California: what they do and how to compare them

What a solar leasing company is

A solar leasing company is the legal owner of a solar system on your home. The CPUC describes a lease this way: the solar provider owns the system “and ‘rents’ it to you for a scheduled monthly payment over a set number of years.” With a lease, the provider is responsible for monitoring, maintenance and repairs, and a minimum level of production is often guaranteed (CPUC, checked September 23, 2026).

The company that signs you is often not the only one involved. The EPA, describing the same model under a PPA, lists a provider that arranges financing, design, permitting and construction; an installer that may be in-house or an independent contractor; and an investor who provides equity and receives the tax benefits (EPA). Contracts also change hands. Sunrun, a publicly traded residential provider, says in its 2025 annual report that certain systems under its lease or PPA agreements “have been sold and may in the future be sold to third-party investors” (Sunrun Form 10-K, filed February 26, 2026). Ask who will own your contract, and who you call for service if it is sold.

How many Californians lease now

Fewer than most sales pitches suggest. California Distributed Generation Statistics, the CPUC-authorized database of every system interconnected at PG&E, SCE and SDG&E, breaks new residential solar projects down by ownership (California DG Stats, data through May 31, 2026, checked September 23, 2026):

So when someone offers you “a lease,” read the contract’s title. Most third-party offers in California are PPAs, which bill per kWh rather than a flat monthly amount. The difference is explained in solar lease vs PPA, and the companies behind PPAs in how to compare solar PPA companies. Berkeley Lab adds a national pattern: lower-income solar adopters were more likely than higher-income adopters to use third-party ownership in 2025 (LBNL, August 2026).

What the 2025 tax law changed for leasing companies

In a third-party arrangement, the EPA says the provider or its investor “acquires valuable financial benefits, such as tax credits”; that is part of how an offer with no money down is financed. The 2025 federal tax law (Public Law 119-21) added a new subsection to 26 U.S.C. § 48E: “No credit shall be determined under this section for any qualified investment during the taxable year with respect to property described in paragraph (1) or (4) of section 25D(d) … if the taxpayer rents or leases such property to a third party during such taxable year.” In § 25D(d), paragraph (1) is solar water heating and paragraph (4) is small wind energy. Rooftop solar electric property is paragraph (2), which the subsection does not list. The Code’s notes apply it to taxable years beginning after July 4, 2025 (26 U.S.C. § 48E(i), checked September 24, 2026). The change that does reach rooftop solar is an end date: for solar whose construction begins after July 4, 2026, § 48E(e)(4) allows no credit for property placed in service after December 31, 2027.

The subsection names renting and leasing; it does not mention selling electricity under a PPA. What it means for a particular offer’s price is for the provider to explain and a tax professional to confirm. Two things are certain: the homeowner credit does not help you, because the IRS says it “is not available for any property placed in service after December 31, 2025” (IRS), and a lease payment that depends on a credit the provider cannot claim may be repriced before you sign. Get the price in the signed contract, not in a quote.

How to compare solar leasing companies

The CPUC’s consumer guide gives the questions; these are the ones that separate one leasing company from another. Ask each company in writing, on the same system design and the same year of your utility bills.

1. License. The CPUC says the provider’s CSLB license “must be active and in classification C-46 (Solar Contractor), C-10 (Electrical Contractor), or B (General Building Contractor).” Ask for the installer’s license too if a subcontractor will do the work, and check both with the CSLB.
2. Total cost over the term. Every payment for 20 or 25 years, not the first month. Escalators are “typically in the range of a 1 percent to 3 percent increase,” and the CPUC says to be cautious above that.
3. Production guarantee. A lease payment does not fall in a bad month. Ask how a shortfall is measured and paid.
4. Maintenance, insurance and the roof. Who repairs the system, who insures it, and who warrants the roof penetrations.
5. Selling the home. Whether a buyer must qualify, whether there are transfer fees, and what you owe if the buyer will not take the lease. The CPUC warns a buyout “could be thousands of dollars.”
6. End of the term. Renewal, purchase and removal options, at what price, and who restores the roof.
7. Renewable energy credits. The CPUC says to ask who owns the RECs and to check the fine print.

Source for the quotations: CPUC, California Solar Consumer Protection Guide, checked September 23, 2026. The state disclosure document every provider must give you shows the total cost and a standardized bill savings estimate; red flags to look for are in solar contract red flags in California.

What one large provider’s filing says its contracts contain

Public companies describe their contracts in SEC filings, which makes them a useful benchmark for the terms to ask any company about. This is not a recommendation. Sunrun’s Form 10-K for 2025 says (Sunrun, filed February 26, 2026):

• Its lease and PPA agreements “typically have an initial term of 20 or 25 years,” with rates “fixed for the duration of the contract or escalated at a predetermined percentage annually.”
• “System maintenance is included” in the lease or PPA, and customers are covered by production guarantees for the length of the term.
• At a home sale, the customer can buy the system or assign the agreement to a buyer who “meets our credit requirements,” and may prepay some or all remaining payments to lower the buyer’s rate.
• After the initial term, customers can renew, “typically at a 10% discount to then-prevailing power prices,” buy the system at fair market value, or have it removed.
• The average FICO score of its customers on monthly-payment agreements “remained at or above 740” at the end of 2025.

If another company’s contract is silent on any of these points, ask. Company-specific reviews are in the Sunrun review and the California solar company reviews.

When the leasing company fails

The CPUC lists it plainly as a con of leases and PPAs: “Solar provider could go out of business during the contract period.” It is not hypothetical. On June 8, 2025, Sunnova Energy International and two affiliates filed Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas, saying they would keep operating while pursuing a sale of certain assets (Sunnova Form 8-K, filed June 9, 2025). What that meant for customers is in the Sunnova review. Before you sign, ask what happens to maintenance, the production guarantee and your contract if the company is sold or shuts down, and keep every document.

Leasing, renting and what a lease does not change

• Property tax. The Board of Equalization says a qualifying system “is excluded whether it is leased or owned,” with no form to file (BOE). The exclusion is scheduled to end on January 1, 2027; details are in whether solar raises California property taxes.
• “Renting” solar. A lease is what people usually mean by renting solar panels; how that works for a house is in renting solar panels for your home. If you rent the home itself, see solar for renters.
• Paying up front. A prepaid lease is a different product with different risks; see prepaid solar leases.
• Selling or stopping. See what happens to a solar lease when you sell and what happens if you stop paying.

A referral request is optional and separate

California Rate Relief is a referral service. We are not a licensed contractor. A referral request does not choose a leasing company, set a price or approve a contract; read the written documents from any company before you sign.