Why Solar Leases Are Being Pushed and What Homeowners Need to Know Before Signing

Over the last year, we’ve seen a noticeable surge in solar lease sales. This isn’t happening by accident.

The federal solar tax credit is still available for two more years, and many solar companies are aggressively shifting their sales strategies to take advantage of it. 

For homeowners, this has led to a troubling pattern: solar leases and power purchase agreements (PPAs) are being heavily misrepresented. And sometimes, not disclosed at all.

We want to be very clear about what’s happening, what’s being said, and why it matters.

What Is a Solar Lease or Power Purchase Agreement (PPA)?

A solar lease or PPA is not ownership.

When a homeowner signs a lease or PPA, the solar company or a third-party investor owns the equipment on the roof. The homeowner does not receive the federal tax credit, does not build equity in the system, and is typically locked into a long-term contract, often 20 to 25 years. 

Payments are required regardless of how well the system performs, and these agreements frequently include transfer restrictions, buyout penalties, or liens that can complicate refinancing or selling the home.

Calling this type of arrangement “free solar” is simply untrue.

Note solar leases and PPA’s are not the same thing. Read more about solar leases versus PPA’s.

The New Sales Pitch We’re Seeing (And Why It’s Misleading)

Recently, we’ve spoken with homeowners who were told things that were flat-out false.

“Your solar system is a part of a government funded program.”

One homeowner was told repeatedly that their solar system was part of a government-funded program and that there would be no cost at all. At no point were they told they were signing a lease or power purchase agreement. That is not how government incentives work. The federal solar tax credit does not pay for systems upfront. 

It only reduces taxes owed by the owner of the system. And in a lease or PPA, the homeowner is not the owner.

“Your solar company is your new electric company. You’ll just have one bill.”

Another homeowner was told that the solar company would become their new electric company and that they would only pay the solar provider going forward. 

This is also misleading. 

Solar companies are not utilities and do not replace them. Homeowners still rely on the utility company for grid access and may continue to receive utility bills. 

In many PPA contracts, the price paid to the solar company increases over time, even if utility rates stay flat. If the system underperforms, the homeowner is still obligated to pay under the contract.

These claims are not misunderstandings. They are sales tactics.

Why Leases Are Being Pushed Right Now

Solar leases are being aggressively sold because they are financially attractive to solar companies, not homeowners. 

When a lease or PPA is signed, the company or its investors receive the full tax credit, secure long-term guaranteed payments, and shift most of the risk to the homeowner. Sales representatives can also close deals faster by avoiding upfront price discussions, which makes leases easier to sell. This is true even when they are a poor long-term fit.

For homeowners, this often results in less transparency and more financial exposure.

The Biggest Problem: Lack of Informed Consent

The most serious issue we see is not simply that solar leases can be unfavorable. It’s that many homeowners are never clearly told they are entering one at all.

If a homeowner does not understand that they are signing a lease or PPA, that they do not own the system, that they will not receive the tax credit, and that they are committing to decades of payments, then they were not given the information needed to make a real choice. Contracts signed under these conditions raise serious concerns.

What Homeowners Should Do Before Signing Anything

Before agreeing to any solar proposal, homeowners should insist on clear answers to a few basic questions:

• Do I own the system, or am I leasing it?
• Who receives the tax credit?
• How long is the contract?
• What happens if I sell my home?
• Can the payment increase over time?

If these questions are avoided, rushed, or answered vaguely, that alone is a warning sign.

Final Thought

Solar can be a powerful tool when done correctly. But misrepresenting leases as “free,” “government-funded,” or “utility replacement” programs is deceptive and can leave homeowners trapped in agreements they never intended to sign.

If you were told one thing and later discovered you signed something very different, you’re not alone. And you may have options.

Understanding what you actually agreed to is the first step toward protecting yourself.