How a Sunrun PPA Actually Works
Last verified 2026-09-05. Figures carry their sources at the foot of this page.
A Sunrun power purchase agreement runs 20 to 25 years. That's not a sales estimate — it's the language in Sunrun's own 10-K, filed with the SEC on February 26, 2026: Customer Agreements "typically have an initial term of 20 or 25 years." Under a PPA, you never own the panels. Sunrun or one of its financing partners does, for the life of the contract, and you pay a fixed price per kilowatt-hour for the electricity the system produces instead of paying a contractor to install equipment you'd own outright.
That distinction — pay-per-kWh (PPA) versus fixed-monthly-rent (lease) versus one-time prepayment (Sunrun's 25-year prepaid plan) versus owning the system yourself (cash or loan) — determines who gets the tax credit, who's on the hook for repairs, what happens if you sell your house, and what you're allowed to do with the system for two decades. This page walks through what Sunrun's SEC filings and its own consumer-facing materials say about each of those questions, as of September 5, 2026. Where Sunrun hasn't published a number — the exact escalator percentage, the fair-market-value buyout formula, geographic carve-outs on the performance guarantee — that gap is flagged rather than filled in with a guess.
California Rate Relief doesn't install anything and isn't affiliated with Sunrun. This is a breakdown of Sunrun's own disclosed terms so you can read your actual contract with context.
What You're Actually Signing
Sunrun's consumer FAQ draws the line plainly: "With a lease, you pay a fixed monthly 'rent' in return for use of the system. With a PPA you pay a fixed price per kWh for power generated." Both are non-ownership contracts. Sunrun's site currently markets its standard monthly non-ownership product as the "Sunrun Subscription Plan," described as "hassle-free full service for life," and separately offers a 25-year prepaid version with no ongoing monthly bill. Whichever version you're offered, the mechanism underneath is the same: Sunrun or a financing partner owns the physical equipment, arranges non-recourse financing and tax-equity investment to fund it, and in some cases sells the completed agreement to a third-party investor. You never hold title to the panels, the inverter, or the battery during the term — the equipment sits on your roof, but it is not your asset on paper.
This matters beyond semantics. Ownership determines who can claim the tax credit, who owes property tax on the equipment in states that assess it, and whose name is on the maintenance obligation. Under a PPA or lease, all of that sits with Sunrun. That's the trade you're making for zero money down: you give up the asset and the tax benefit, and in exchange Sunrun is contractually on the hook for keeping the system running for the length of the agreement.
The Escalator: Why There Isn't One Published Number
Sunrun's 10-K states plainly that rates "can be fixed for the duration of the contract or escalated at a predetermined percentage annually." No specific percentage appears anywhere in the filing. Sunrun's own FAQ confirms the escalator is "outlined in your Sunrun agreement" — meaning it's set contract-by-contract, likely varying by state, installer relationship, and product tier, not published as one company-wide rate. If you want a payment with no annual increase at all, Sunrun's FAQ points to its prepaid plan as the escalator-free option.
General industry guides (not Sunrun-specific — this figure should not be read as Sunrun's rate) describe typical escalator tiers around 0.99%, 1.99%, or 2.99% annually across the solar-lease/PPA industry broadly, and note that no-escalator contracts tend to save more over the full term. Whatever tier applies to your specific offer, get it in writing before signing. On a 20-25 year contract, the difference between a 1% and a 3% annual increase compounds into thousands of dollars by year 20 — this is worth more scrutiny than the sticker price of month one.
The Production Guarantee, and Its Fine Print
Sunrun's 10-K states that most Customer Agreements "entitle the customer to a refund for underproduction below a guaranteed amount" — its performance guarantee — with one carve-out: agreements "billed based on generation" (a strict per-kWh PPA) work differently, since underproduction there already lowers what you owe automatically, rather than triggering a separate refund. Sunrun's consumer FAQ describes the mechanic in plain terms: the company compares actual production against the estimate every 24 months and issues billing credits if the system underproduced.
The FAQ also states the guarantee "applies only to monthly lease and PPA arrangements and may have geographic limitations" — but does not spell out which states or regions are excluded. That gap is unresolved as of this writing; if a specific state exclusion matters to your decision, ask Sunrun directly for the geographic scope of your guarantee in writing rather than assuming universal coverage.
End of the Initial Term: Three Choices, One Unpublished Number
This is the single highest-value fact in Sunrun's 10-K for anyone comparing a 20-25 year commitment: at the end of the initial term, you get three options. Renew the agreement for the remaining life of the system — Sunrun states this is "typically at a 10% discount to then-prevailing power prices." Purchase the system outright at its fair market value. Or have Sunrun remove it at no cost to you.
What Sunrun has not published, in the 10-K or anywhere else checked for this page, is the formula behind that fair-market-value buyout number. There's no percentage, no depreciation schedule, no worked example. If your plan is to buy the system at year 20 or 25, don't budget around an assumed number today — request a written quote as that date approaches, since "fair market value" gives Sunrun latitude that isn't quantified in advance.
Selling Your Home With the System Still Attached
Sunrun's dedicated transfer process ("Moving Made Easy") lays out four steps: you submit your buyer's and escrow company's contact information; all parties verify details and confirm the closing date through Sunrun's portal; everyone e-signs transfer documents via DocuSign, with the new homeowner completing what Sunrun calls a "soft credit check (this will not impact their credit score)"; the transfer finalizes when escrow closes. The agreement assigns to the new owner only if they meet Sunrun's credit requirements — per the 10-K, the buyer must qualify and agree to the existing contract's terms.
If the buyer doesn't want to or can't assume it, you can prepay the remaining service balance, typically folded into your home's sale price; the new owner then gets the power for whatever's left of the term, after which Sunrun removes the system for free. Sunrun states it places no lien on the home, though it may record a notice against the title in some states as part of its financing arrangement — this is standard practice across the third-party solar industry (commonly a UCC-1 fixture filing), though the exact filing type Sunrun uses in California specifically wasn't independently confirmed in a second source for this page. Either way, expect any such notice to need clearing as part of a sale or refinance, and raise it with your title company early.
What You Own vs. What Sunrun Owns
Under a PPA or lease, Sunrun owns the physical equipment for the contract's duration and — per its consumer site — provides "24/7 system monitoring" and "free maintenance and repairs" as part of that ownership. You own none of the hardware and carry none of the repair liability.
The tax picture follows the same split. The federal Investment Tax Credit and any bonus credits attach to whoever owns the system — Sunrun or its tax-equity investors — never the PPA or lease customer, structurally, regardless of the credit's size or expiration date. Sunrun's own FAQ implies state-level rebates work the same way: it tells cash/loan customers that rebates "go directly to you," which by contrast means they flow to Sunrun under a lease or PPA. Sunrun's 10-K also notes its investment funds "often are able to sell SRECs to utilities directly or in SREC markets" — worth knowing structurally, though California has no SREC market, so this doesn't apply to a California PPA in practice.
Why the Tax Credit Calendar Matters for a Contract Signed Today
Two federal deadlines, both from Sunrun's own 10-K risk disclosures, bracket this decision. First: the 2025 federal budget law (the OBBB) "ended the Residential Clean Energy Credit" — Section 25D, the credit for homeowners who buy a system outright — effective January 1, 2026. That credit never applied to PPA or lease customers anyway, but as of now it's gone for cash/loan buyers too, narrowing the tax gap between owning and leasing.
Second, and more complex: the commercial credit that makes PPA financing work, Section 48E, is not available for "solar projects... placed in service after December 31, 2027, unless construction on the solar project begins by July 4, 2026" — per Sunrun's own filing. As of today, September 5, 2026, that construction-start deadline has already passed. What that means for a homeowner signing a new Sunrun agreement right now is genuinely unresolved from public information: IRS "beginning of construction" safe-harbor rules have historically let a developer satisfy this test on a portfolio basis well ahead of any individual home's installation, which could mean Sunrun's pipeline already qualifies — but that's not confirmed here. If the 48E-eligibility of your specific project matters to the price you're being quoted, ask your installer directly whether their construction-start safe harbor has been satisfied, rather than assuming either way.
Sunrun's Financial Position, in Context
Given how many solar financiers have failed in the past two years, this matters as much as the contract math. Freedom Forever filed Chapter 11 in April 2026 and converted to Chapter 7 liquidation on July 31, 2026 — it no longer operates, leaving more than 150,000 homeowners in limbo. Sunnova filed Chapter 11 in June 2025; its legacy contracts are now run down by SunStrong rather than originating new business. SunPower filed Chapter 11 in August 2024.
Sunrun, as of this writing, has not filed for bankruptcy. Its investor relations page shows continued quarterly reporting through Q2 2026 (released August 5, 2026), two 2026 asset-backed securitizations ($584 million in April, $267 million in August), and a Fortune 1000 listing for 2026. That's a materially different fact pattern than its failed competitors — but it's a snapshot, not a forecast, and this page did not pull Sunrun's specific balance-sheet or cash-position figures, so treat "still operating and still securitizing" as the confirmed fact, not a guarantee of the next 20 years.
Sunrun's four contract structures, side by side (source: Sunrun 10-K, FY2025, filed 2026-02-26; Sunrun consumer FAQ, fetched 2026-09-05)
| Contract type | How you pay | Escalator | Who owns the system | Where the tax credit goes | End-of-term options |
|---|---|---|---|---|---|
| PPA (pay per kWh) | Fixed price per kWh of power actually produced | Set per agreement — ask for the written number before signing | Sunrun or its financing/investor partners | Sunrun or its tax-equity investors (never the customer) | Renew (commonly ~10% off prevailing power prices), buy at fair market value, or request removal |
| Monthly lease ("Subscription Plan") | Fixed monthly amount regardless of output | Set per agreement — same caveat as PPA | Sunrun or its financing/investor partners | Sunrun or its tax-equity investors | Renew (commonly ~10% off prevailing power prices), buy at fair market value, or request removal |
| Prepaid subscription (25-year) | One upfront payment covering the full term | None — this is the no-escalator option | Sunrun or its financing/investor partners | Sunrun or its tax-equity investors | Same three-way choice at year 25 |
| Cash or loan purchase | You pay the installer (Sunrun or another CSLB contractor) directly | Not applicable — no ongoing payment to escalate | You, from day one | You (but the federal 25D credit ended for systems placed in service after 2025) | None needed — you already own it |
When this is the wrong move
A Sunrun PPA is the wrong fit if you want to claim a system-ownership tax benefit yourself — though with 25D now ended for everyone as of January 1, 2026, this gap has narrowed, it hasn't closed for the 48E-style benefits that still flow only to the owner-financier. It's wrong if you're planning to sell your home within the contract term and your likely buyer pool skews toward cash offers or buyers unlikely to clear a credit check — an unassumed PPA means prepaying the balance out of your sale proceeds, which can complicate a sale timeline. It's wrong if you want to add a battery, expand the array, or re-roof without coordinating around equipment you don't own — every physical change requires Sunrun's involvement and consent, not just a contractor's. It's wrong if you have or plan a HELOC or refinance and haven't first confirmed how a UCC-style title notice from Sunrun will be handled by your lender. And it's wrong if you're unwilling to sign before Sunrun states your specific escalator percentage and the geographic scope of your performance guarantee in writing — both are contract-specific, unpublished company-wide, and material to a two-decade commitment.
Frequently asked questions
Is a Sunrun PPA the same thing as a Sunrun lease?
No, though people use the terms interchangeably. Per Sunrun's own consumer FAQ: with a lease you pay a fixed monthly "rent" for use of the system regardless of how much power it makes. With a PPA you pay a fixed price per kilowatt-hour for the power the system actually generates that month. Both are non-ownership contracts — Sunrun holds title either way. Sunrun's site currently markets its monthly non-ownership product as the "Sunrun Subscription Plan"; whether a given household's paperwork calls it a lease or a PPA structurally depends on how the meter is billed, not on marketing language. Ask which one you're being offered before signing, since the underlying math differs.
How long does a Sunrun contract last?
Sunrun's FY2025 10-K, filed with the SEC on 2026-02-26, states its Customer Agreements "typically have an initial term of 20 or 25 years." The 25-year figure is explicitly tied to Sunrun's prepaid product on its consumer site. Which exact number applies to a monthly-pay lease or PPA in your specific market isn't broken out publicly beyond that 20-or-25 range, so get the term length in writing in your own contract rather than assuming either number.
Will my monthly payment go up every year?
It depends on which agreement you sign, and Sunrun does not publish one standard escalator percentage. Its own FAQ says your bill "will increase based on an escalator outlined in your Sunrun agreement," and that a no-escalator option exists if you choose the prepaid plan instead. Industry-wide, escalator tiers in the 1-3% annual range are common (per general industry guides, not a Sunrun-published figure), but treat any number you hear before reading your actual contract as unconfirmed. This is the single most important number to nail down before signing, because it compounds for two decades.
Do I get the federal solar tax credit with a Sunrun PPA?
No — and as of 2026-09-05, nobody buying solar gets the old residential credit anymore. The Section 25D residential credit only ever applied to homeowners who purchased a system outright, never to lease or PPA customers; Sunrun's own 10-K confirms 25D applied only to "customers who purchase an energy system outright." On top of that, per Sunrun's 10-K, the 2025 federal budget law (the OBBB) ended the Residential Clean Energy Credit entirely, effective January 1, 2026. Under a PPA, the tax benefit that matters — the commercial Section 48E credit — flows to Sunrun or its tax-equity investors, not to you, and is already priced into your rate.
What happens at the end of my Sunrun contract?
Per Sunrun's 10-K, you get three choices: renew the agreement for the system's remaining life (Sunrun states this is "typically at a 10% discount to then-prevailing power prices"), buy the system outright at its fair market value, or have Sunrun remove it at no cost to you. Sunrun has not published the formula it uses to calculate that fair-market-value buyout price, so if you're planning around a specific buyout number, get a written quote near the end of your term rather than estimating today.
What happens if I sell my house before the contract ends?
Per Sunrun's transfer process ("Moving Made Easy"), the buyer can assume your agreement if they pass a soft credit check (Sunrun states this does not affect the buyer's credit score) and sign the transfer paperwork, finalized at escrow close. If the buyer won't or can't assume it, you can prepay the remaining service balance — typically rolled into your home's sale price — after which the new owner gets the power for the rest of the term at no additional charge, and Sunrun removes the system for free once the term ends. Either way, plan for this conversation with your buyer and realtor before listing.
Is Sunrun at risk of the bankruptcies we've seen from other solar financiers?
As of 2026-09-05, Sunrun has not filed for bankruptcy, unlike Freedom Forever (Chapter 11 in April 2026, converted to Chapter 7 liquidation on July 31, 2026), Sunnova (Chapter 11 in June 2025, now run down by SunStrong), and SunPower (Chapter 11 in August 2024). Sunrun reported quarterly results through Q2 2026, closed two asset-backed securitizations in 2026 ($584 million in April, $267 million in August), and was named to the Fortune 1000 list for 2026. That's a solid operating fact pattern, not a guarantee — no company's future financial health can be verified from public filings alone, so factor it in as one data point, not a certainty.
The bottom line
A Sunrun PPA is a 20-to-25-year contract, per Sunrun's own SEC filing, under which Sunrun (or its financing partners) keeps title to the panels and the tax credit, and you pay for the power. The escalator, the production-guarantee mechanics, and the fair-market-value buyout at year 20 or 25 are all contract-specific — Sunrun does not publish one number for any of them, so the actual figures live in the paperwork you'd sign, not on the marketing page. Selling the house means qualifying a buyer or prepaying the balance; neither is guaranteed to be simple. None of this makes a PPA wrong by default — for a homeowner who wants zero money down and zero maintenance liability, it can still make sense. But compare it against a cash or loan purchase before signing, because the two paths now diverge more than they did before January 2026, when the owner-side federal credit disappeared.
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Sources
Rates and incentive programs change. Each figure above traces to one of these.
- Sunrun Inc. Form 10-K, FY2025 (filed with SEC 2026-02-26) — Contract term length (20-25 years), escalator language, performance guarantee language, end-of-term options (renewal discount, FMV purchase, removal), home-sale transfer rights, ownership/financing structure, SREC language, 25D end date, 48E construction/placed-in-service deadlines
- Sunrun consumer FAQ — Lease vs. PPA distinction in plain language, escalator confirmation and no-escalator prepaid option, 24-month production comparison and credit remedy, geographic limitation disclosure, state rebate flow-through implication
- Sunrun monthly solar lease product page — Current product framing ("Sunrun Subscription Plan"), maintenance and monitoring inclusions, system ownership by Sunrun
- Sunrun "Moving Made Easy" transfer page — Four-step home-sale transfer process, buyer soft credit check, prepay-and-remove alternative, title notice practice
- Sunrun Investor Relations, press releases — No bankruptcy filing, Q1/Q2 2026 quarterly reporting, 2026 securitizations, Fortune 1000 2026 listing
- Solar.com, solar lease vs. PPA guide (updated 2026-01-22) — General industry escalator tier context (0.99%/1.99%/2.99%) — explicitly not attributed to Sunrun specifically