Solar PPA companies in California: what they are and how to compare offers

What a solar PPA company is

A PPA company sells you electricity, not equipment. The CPUC puts it this way: “the solar provider owns the system on your property and sells you the electricity it generates,” and “you typically pay for all the power the solar system generates (at a fixed per-kilowatt-hour rate).” The contract “will specify the kilowatt-hour rate you pay in the first year and every year after that,” and the CPUC says that rate “should generally be lower than your current electricity rate” (CPUC, checked September 23, 2026).

The EPA calls these firms solar services providers and describes four parties to a PPA: the provider, which “functions as the project coordinator, arranging the financing, design, permitting, and construction”; the installer, which may be the provider’s own team or “an independent installer”; an investor, which “provides equity financing and receives the federal and state tax benefits”; and the utility, which keeps serving you when the system produces less than you use (EPA). The name on the ads, the crew on your roof and the owner of your contract can be three different companies.

How common PPAs are in California

California Distributed Generation Statistics, the CPUC-authorized record of systems interconnected at PG&E, SCE and SDG&E, shows PPAs made up 41.7% of residential solar projects that received permission to operate in 2025 (144,703 projects) and 35.1% in 2026 through May 31 (58,295). Leases were 3.1% and 4.6%, and customer-owned systems 54.5% and 58.7% (California DG Stats, checked September 23, 2026). If a salesperson describes a “solar lease” that bills you per kWh, the contract is probably a PPA; read its title. What sets leasing companies apart is in solar leasing companies in California.

The federal credit behind PPA pricing is on a clock

Part of what finances a PPA is the federal business credit: the EPA says the investor in a PPA “receives the federal and state tax benefits” the system is eligible for. The 2025 federal tax law put an end date on that credit for solar. Under 26 U.S.C. § 48E(e)(4), the credit “shall not apply to any qualified property placed in service by the taxpayer after December 31, 2027” at a solar or wind facility, for facilities whose construction begins more than 12 months after July 4, 2025. Energy storage at those facilities is excepted (26 U.S.C. § 48E, checked September 23, 2026). Sunrun, a publicly traded residential provider, summarizes the change in its 2025 annual report: solar facilities “which begin construction after July 4, 2026 must be placed in service by the end of 2027” (Sunrun Form 10-K).

What that means for you: a PPA price quoted in 2026 or 2027 may depend on the provider finishing the installation in time. Ask whether the price changes if installation slips, and get the price in the signed contract. The homeowner credit plays no part in a PPA, because the provider owns the system.

How to compare solar PPA companies

Get written offers from at least three companies on the same system size and your last 12 months of usage; the CPUC recommends three bids. Then compare:

1. Price per kWh, against your own utility price. The test, with the utilities’ current average rates, is in how to judge a solar PPA price per kWh.
2. The escalator. The CPUC says escalators are “typically in the range of a 1 percent to 3 percent increase above the rate you paid in the previous year” and to be cautious above that. Ask for the year-by-year price schedule.
3. Exported power. A PPA usually charges for every kWh the system makes. At PG&E, SCE and SDG&E, exports are credited at values the CPUC says are “usually lower than the retail rate” (CPUC). Ask how much of the modeled output the offer assumes you use at home, because an oversized system means paying the PPA price for power you export at a lower credit.
4. The production estimate and guarantee. The CPUC lists a minimum energy guarantee as common with PPAs. Ask how it is measured and what happens if output falls short.
5. Selling the home and buying out. The CPUC says a buyout “can cost thousands of dollars.” Ask whether a buyer must qualify, whether there are transfer fees and how the buyout price is set in each year.
6. Who owns and services the contract. Ask whether the company may sell your agreement to investors and who you call for service if it does.
7. License and disclosure. An active CSLB license in class C-46, C-10 or B, and the state’s Solar Energy System Disclosure Document, which the CPUC says a provider must give you by law.

Source for the CPUC quotations: California Solar Consumer Protection Guide, checked September 23, 2026. What an escalator does to later years is in solar escalator clauses explained.

Paying up front, and buying the system later

Many PPA companies offer a prepaid version: you pay for the expected power at the start. Sunrun’s filing describes how it handles a shortfall on prepaid agreements: if the estimated production is less than actual production “after the first full one to two years,” prepaid customers are refunded the difference each year, and extra production is theirs at no charge. At the end of the initial term its customers can renew, buy the system at fair market value, or have it removed (Sunrun Form 10-K, filed February 26, 2026). That is one company’s contract, not a rule. Compare it with what yours says, and see the prepaid PPA checklist and what happens to a PPA when you sell.

If the PPA company goes under

The CPUC lists it among the cons of a PPA: “Solar provider could go out of business during the contract period.” Sunnova Energy International, a residential solar provider, filed for Chapter 11 on June 8, 2025, saying it would keep operating while it pursued a sale of certain assets (Sunnova Form 8-K). Ask any PPA company what happens to your price, maintenance and production guarantee if it is sold or fails, and keep the full signed contract. Company-specific reviews, including Sunnova and Sunrun, are in the California solar company reviews.

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 PPA company, set a price or approve a contract; compare the written documents from any company before you sign.