Solar PPA - Honest Answers
Every Question Homeowners Ask Before Going Solar
These are the real questions - the ones people ask after they've already seen their savings estimate. Answered without the pitch.
The Basics
What's the catch? This sounds too good to be true.
Fair question. Here's what you're actually committing to: a 25-year Power Purchase Agreement with an annual rate escalator (a common illustrative example is 3.5% - your contract states the actual number). You don't own the panels - your qualified installer does. You can't move the system to a new house (but it transfers to the buyer if you sell, subject to the installer's standard approval). And there's a credit check. SCE's rate has risen roughly 7% a year on average since 2013 (historical average, not a guaranteed future rate). If your PPA escalator stays below that pace, the gap between what you'd pay SCE vs. your PPA rate grows over the life of the agreement. The 'catch' is a long-term commitment - but to a rate that starts lower than what you're already paying.
Is this really no money down?
Yes. With a PPA (Power Purchase Agreement), your qualified installer owns the solar system and you buy the power it produces at a lower rate than SCE. Zero down payment, zero installation cost, zero maintenance cost. You just pay a lower electricity bill.
Are the savings guaranteed?
Your qualified installer offers a production guarantee. If the system generates less than the annual kWh amount stated in your contract, they credit you the difference. It's backed in writing - not just a promise. Terms and exclusions apply; review your contract for full details.
25 years is a long commitment.
Your current relationship with SCE has no end date, and there's no cap on future rate cases. A 25-year PPA gives you a contractually fixed escalator (ask your installer for the exact rate) against SCE's rate, which has risen roughly 7% a year on average historically - not a guarantee of future increases, just the trend so far. You're already committed to paying for electricity - this just starts you at a lower rate.
Selling Your Home
What if I sell my house?
The PPA is designed to transfer to the new buyer, who typically completes the installer's standard approval process (similar to what you did) to assume the agreement. It's not a lien on your property and doesn't affect your title. A lower electricity rate can be a selling point in SCE territory, where rates have risen historically. Your agent discloses the PPA like any other home feature - same as a home warranty. Ask your installer for their specific transfer and approval terms before you sign.
Tax Credits & Financial Questions
What about the solar tax credit?
The personal residential tax credit (Section 25D) expired for expenditures made after December 31, 2025, and it only ever applied if you owned your solar system outright (IRS FAQ FS-2025-05). As a PPA customer, you never owned the system, so you were not eligible for it either way. Your installer, as the system's owner, may claim a separate business credit (Section 48E) on its own taxes, and some installers reflect part of that in the PPA rate they offer - but that's a business decision on their end, not something this site can promise. Ask your installer directly whether and how it factors into your quote.
Why is there a deadline?
There's a federal deadline, but it applies to your installer's business, not to you directly. Section 48E is a commercial tax credit your installer claims, not a homeowner credit. Under the 2025 federal tax law, new wind and solar projects generally need to begin construction by July 4, 2026 (already passed) or be placed in service by December 31, 2027 to keep that credit - and a federal court fight over the underlying construction-start rule was still active as of mid-2026, so the details could still change. If your installer can't claim the credit on a given project, their pricing may reflect that. Ask your installer how this affects your specific contract and rate.
Do I need good credit?
A PPA typically requires a soft credit check - generally a 650+ FICO score. If you're close to that threshold, it's worth running the numbers before assuming you don't qualify. There's no hard pull until you move to a signed agreement, so checking costs you nothing. If credit is a barrier, I can also explore whether purchasing makes more sense for your situation.
SCE Rates & California Policy
What about NEM 3.0 - doesn't that make solar less valuable?
NEM 3.0 only affects homeowners who own their system and sell excess power back to the grid at low export rates. With a PPA, you don't own the system - your qualified installer does, and they handle all interconnection. Your bill comparison is simply your PPA rate vs. SCE's retail rate. NEM 3.0 is actually why every PPA today includes battery storage: your excess solar charges the battery during the day, then you draw from it during expensive evening peak hours instead of exporting at low rates. The PPA structure sidesteps NEM 3.0 entirely.
I heard California might reverse NEM 3.0. Should I wait and see?
The court challenge questions whether CPUC undervalued solar exports - it's not pausing any installations. With a PPA, you don't own the system or the export credits, so a NEM policy change wouldn't change what you personally owe under your contract. Separately, your installer's own federal tax credit (Section 48E) depends on construction and in-service timing rules that were still being litigated as of mid-2026 - ask your installer how that affects their pricing today.
Why do I need a battery?
Under California's NEM 3.0 rules, the compensation for solar exported to the grid during the day is much lower than it used to be. A battery stores your daytime solar production so you use it yourself during expensive evening peak hours instead of buying that power from SCE. This significantly increases your actual monthly savings vs. solar alone.
Installer Stability & Company Risk
I had a bad experience with another solar company.
You're not alone - SunPower, Sunnova, and Mosaic all went bankrupt. That's exactly why company stability matters. I only refer homeowners to qualified installers that are currently operating, actively installing, and honoring warranties.
What if my installer goes out of business like SunPower?
SunPower, Sunnova, Mosaic - all bankrupt in 2023-2024. That's a real risk in this industry. Every PPA comes with a warranty that's backed by the installer in writing, and I vet who I refer to. That said, no company is guaranteed to survive 25 years - that's a real risk worth acknowledging. If your installer ever goes out of business, your PPA contract and the physical system remain in place, and a replacement service provider would take over maintenance.
Property & Installation
My HOA might not allow solar.
California Civil Code Section 714 prohibits HOAs from banning solar installations on single-family homes. Your HOA can regulate placement and aesthetics (no panels visible from the street, for example), but they cannot deny your right to install solar. If your HOA tries to block it, show them the statute - it's been state law since 1978.
My roof is older - does that matter?
Yes, and it's worth knowing upfront. Before installation, your installer does a satellite and in-person roof assessment. If the roof has fewer than 5 years of life left, they'll typically recommend a reroof first. Some homeowners combine a new roof and solar into a single project to simplify permitting. I'll walk you through whatever the installer finds - no surprises after you sign.
Still have a question?
I read every reply. Or grab 15 minutes and I'll walk through anything specific to your home, roof, and SCE bill.
Book a 15-Min CallOr text Adrian directly at (951) 290-3014