Lease, PPA, loan or cash: how each works
Quoted cells are from the California Public Utilities Commission's Solar Consumer Protection Guide (overview page and Version 4 PDF, read 20 Oct 2026); the rest summarise the same pages.
| Cash or loan purchase | Lease | Power purchase agreement (PPA) | |
|---|---|---|---|
| Who owns the system | You | "the solar provider owns the system on your property and 'rents' it to you" | "the solar provider owns the system on your property and sells you the electricity it generates" |
| What you pay | The price, up front or as loan payments | A scheduled monthly payment | A rate per kilowatt-hour for the power produced |
| Payment increases | Set by the loan, if any | "Escalators are typically in the range of a 1 percent to 3 percent increase" a year | Same escalator clauses |
| Typical length | Loan term | 20–25 years | 20–25 years |
| Repairs and maintenance | "You are typically responsible" | The solar provider | The solar provider |
| Selling the house | Some solar loans place a lien on the property | Buyer takes over the contract, you keep paying, or you buy it out, "which could be thousands of dollars" | Same |
| Risk the guide names | Manufacturers "could go out of business during the 10- to 20-year component lifecycles" | "Solar provider could go out of business during the contract period" | Same |
The guide's verdict on money is one line: a purchase gives "typically, greater return on investment". It also says solar "reduces, but does not eliminate" your utility bill, and that a lease, PPA or loan adds a second monthly bill.
The federal tax credit in 2026
IRS.gov's Residential Clean Energy Credit page (last reviewed 4 July 2026, read 20 October 2026) says: "The credit is not available for any property placed in service after December 31, 2025." For 2022 to 2025 it was 30% of the cost.
The IRS FAQ on Public Law 119-21 (FS-2025-05, 21 August 2025) adds that an expenditure is treated as made "when the original installation of the item is completed". A system paid for in December 2025 and finished in January 2026 does not qualify.
If a quote in 2026 still shows a 30% federal credit for a system you will own, ask the seller to show you the IRS page that allows it. The CPUC guide separately warns that anyone telling you to register as an LLC to claim business solar credits "is trying to convince you to do something illegal".
California's Net Billing Tariff (NEM 3.0)
The CPUC says customers who applied for interconnection on or after 15 April 2023 take service on the Net Billing Tariff. Exports are credited at "CPUC Avoided Cost Calculator values (usually lower than import rates)". Customers already on NEM 2.0 keep it "for 20 years from the date they interconnected". The rules apply to PG&E, SCE and SDG&E customers.
The guide spells out what follows: under the Net Billing Tariff "the majority of your electric bill savings will come from using the solar energy in your home", with "a minor additional amount" from export credits. The original customer has the tariff "for at least 9 years". Any savings estimate a salesperson gives you may assume electricity prices rise at most 10% a year, the CPUC's cap as of 2025.
What the installer's record shows
The permit file is the same whether you lease or buy. These are the 10 cities with the most solar permits on our site, plus Anaheim and San Francisco.
| City | Solar permits | Firms | Share filed by the 5 busiest firms | Finished | Usual days to final | Firms with a license problem | Firms gone quiet |
|---|---|---|---|---|---|---|---|
| New York City | 19,067 | 87 | 60.6% | 84.2% | 144 | 14 | 8 |
| Honolulu | 16,068 | 110 | 63.0% | 83.4% | 102 | — | 10 |
| San Diego | 10,027 | 423 | 64.1% | 73.3% | 72 | 11 | 30 |
| Henderson, NV | 6,124 | 83 | 55.6% | 93.2% | 25 | — | 14 |
| Chicago | 5,027 | 58 | 74.7% | 74.6% | 57 | — | 8 |
| Elk Grove | 3,735 | 115 | 73.0% | 96.1% | 109 | 3 | 7 |
| Colorado Springs | 3,035 | 140 | 43.2% | — | 41 | — | 22 |
| Albuquerque | 1,973 | 60 | 70.9% | 83.4% | — | — | 21 |
| Scottsdale | 1,644 | 157 | 26.5% | 76.4% | — | — | 15 |
| Seattle | 1,858 | 69 | 59.0% | 97.0% | 43 | 6 | 2 |
| Anaheim | 1,112 | 258 | 37.0% | 80.1% | 103 | 7 | 10 |
| San Francisco | 441 | 116 | 46.3% | 71.7% | 349 | 2 | 0 |
"License problem" counts firms whose matched state license is now expired, suspended or similar; "—" means the city's file lacks that field or we have no license file to join for that state. "Gone quiet" counts firms with five or more solar permits in the window and none in the last 12 months.
What concentration means for a 20-year contract
In 8 of these 12 cities the five busiest firms filed more than half of all solar permits. In Elk Grove the five busiest filed 73.0% of solar permits; in New York City, 60.6%. Anaheim and Scottsdale are the most spread out, with 258 and 157 firms and no five holding even 40%.
For a buyer, a concentrated market means the big names have long records you can read. It also means the small firms have short ones: in Anaheim 63.2% of solar firms filed exactly one permit. A short record is not a bad record, but it gives you nothing to judge.
The "gone quiet" column matters most on a lease or PPA, because the CPUC guide makes the provider responsible for repairs for 20 years or more, and names the risk that it "could go out of business during the contract period". In San Diego 30 firms that filed at least five solar permits have filed none in the last year; in Seattle, 2. Some moved on to other cities or stopped selling solar; some closed. The file cannot tell which, so ask.
On a lease or PPA, the company on the permit is the installer. The company that owns the system and services it for 20 years may be a different one. Ask for both names in writing and check both.
What this does not tell you
The permit does not record lease or purchase, the price you were quoted, or panel and battery brands. Filed values exist in some cities and not others: San Diego's solar permits do not carry a usable value, while Seattle's usual filed value is $15,040. "Finished" means the city recorded a final inspection; it says nothing about output or bill savings. Our window is about three years, so a firm's earlier record is not here.
A five-minute check before you sign
- Ask for the installer's CSLB license number and, if a door-to-door salesperson came, their HIS registration number. Check both on CSLB Check a License: active, with C-46, C-10 or B.
- Look the installer up on the CPUC's Public Watch List of Non-Compliant Solar Providers. The CPUC says the Watch List process is paused while it is updated, so an absence proves little today.
- Open our solar compare page for your city. Check the firm's permit count, finished share, and whether it has filed anything in the last 12 months.
- On a lease or PPA, ask who owns the system, who services it, and what the buyout costs in year 5 and year 10.
How we know this
Lease, PPA, loan, escalator, contract-length and resale facts are quoted from the CPUC's Solar Consumer Protection Guide (overview page and Version 4 PDF, published October 2025). Net Billing Tariff facts are from two CPUC pages. The tax-credit status is quoted from IRS.gov's Residential Clean Energy Credit page and IRS fact sheet FS-2025-05; we give no tax advice. All were read on 20 October 2026. Our counts come from each city's public permit file for the window shown, joined by business name to the license register where we have one (California, Washington, New York City); name matching can miss, and unmatched firms are never labelled unlicensed. Seattle's category includes batteries.
Numbers come from City of San Diego Development Services approvals; City of Elk Grove TRAKiT building permits on single-family, duplex, mobile-home and ADU homes; City of Anaheim Accela building permits on single-family homes and ADUs; San Francisco DBI building permits on one- and two-family homes, with the contractor from the city's permit contacts file; City of Seattle (SDCI) building, trade and electrical permits on single-family and duplex homes (the city's open-data exports); NYC Department of Buildings permits and DOB NOW filings on one- and two-family homes (NYC Open Data), data through October 17, 2026. Nobody paid to be on this page and nobody can.
See every San Diego solar installer by their permit record →
Questions
- Is it better to lease or buy solar panels in California?
The CPUC's consumer guide says buying with cash or a loan "typically" gives a greater return on investment, but you handle repairs. A lease or PPA needs little or no money up front and the provider maintains the system, but payments usually rise 1–3% a year, contracts run 20–25 years, and selling the house may mean a transfer or a buyout "which could be thousands of dollars".
- Can I still get the 30% federal solar tax credit in 2026?
Not for a system on your own home. IRS.gov says the Residential Clean Energy Credit "is not available for any property placed in service after December 31, 2025", and its FAQ says the expenditure counts as made when installation is completed, so a system paid for in 2025 but installed in 2026 does not qualify (IRS, read 20 Oct 2026).
- What does buying a solar system mean, what is solar panel leasing, and should I lease or purchase?
If you buy, with cash or a loan, you own the system, get the return and handle repairs; the CPUC guide says buying "typically" gives the greater return. If you lease, the provider owns it and "rents" it to you for 20–25 years, with payments that usually rise 1% to 3% a year, and selling the house means a transfer or a buyout. Lease if you cannot pay up front and want no maintenance; buy if you can and plan to stay.
- What is NEM 3.0?
The common name for California's Net Billing Tariff, which applies to customers of PG&E, SCE and SDG&E who applied for interconnection on or after 15 April 2023. Exported power is credited at the CPUC's Avoided Cost Calculator values, which the CPUC says are "usually lower than import rates".
- Does the permit show whether a solar system is leased?
No. A building permit records the address, the installer, the filed value and the inspections. It does not record who owns the panels or how they were paid for.
- How do I check a solar installer's license in California?
On CSLB's Check a License page. The CPUC guide says the license must be active and hold C-46 (Solar), C-10 (Electrical) and/or B (General Building) to install a residential system. If a door-to-door salesperson sold it, ask for their Home Improvement Salesperson registration number too.
Build your own list
Every firm with that kind of permit on record. Pick what you value. The list moves.
Related guides
- How to check a contractor's license in California
- The best month to start electrical, HVAC and solar work (by city)
- ADU vs home addition: what the permit file shows
- What's a good completion rate for a contractor? The benchmarks from 12 trades and cities
For one city
- California Solar Consumer Protection Guide Overview & FAQ (CPUC) (2026-10-20)
- California Solar Consumer Protection Guide, Version 4 (CPUC, PDF) (2026-10-20)
- Net Energy Metering and Net Billing (CPUC) (2026-10-20)
- Net Billing Tariff (CPUC) (2026-10-20)
- Public Watch List of Non-Compliant Solar Providers (CPUC) (2026-10-20)
- Residential Clean Energy Credit (IRS) (2026-10-20)
- FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W and 179D under Public Law 119-21 (IRS, FS-2025-05) (2026-10-20)
- CSLB Check a License (2026-10-20)