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Solar is Not a Scam. Bad Solar Deals Are.
Solar can significantly lower your electric bill — and in many cases, eliminate most or all of it. With the right solar and battery system, you can reduce dependence on the utility company, protect yourself from rising rates, build credits, and keep power during outages.
But when solar is sold the wrong way, it becomes a 25-year financial trap. The problem isn't solar. The problem is predatory selling — 25-year contracts with annual escalators, low-quality system designs, hidden commissions, inflated kilowatt-hour rates, and salespeople trained to sell you a first-year payment instead of the full truth.
Here's the question every homeowner should ask before signing anything:
Why would you leave one bill that increases every year just to sign another 25-year contract that also increases every year — while still being left with a utility bill that increases every year too?
That defeats the entire purpose of solar. The goal should be simple: design a system that eliminates most or all of your electric bill. If you finance it, the payment should be fixed, the system should eventually be paid off, and the cost should not keep increasing forever. That's ownership. And it's fundamentally different from a lease or PPA.
What Is a Solar PPA or Lease?
A solar Power Purchase Agreement (PPA) and a solar lease are financial arrangements where a third-party company owns the solar panels on your roof. You don't own the system. Instead, you pay for the electricity it generates — typically for 20 to 25 years.
With a lease, you pay a fixed monthly payment to "rent" the system. That payment usually increases every year.
With a PPA, you pay for the actual electricity produced, at a rate that typically starts lower than your utility rate but escalates annually — commonly 3% to 3.5% per year.
The pitch is always the same: no money down, lower payments, maintenance included, easy approval. That sounds appealing. But the first-year payment is the sales pitch. The 25-year total is the truth.
Lease/PPA vs. Owning: The Math Most Homeowners Never See
Here's where it gets real. Let's compare the same solar system under three scenarios: a PPA, cash purchase, and financed purchase.
The system: 24 high-performance 450W panels (10.8 kW) with 1 Tesla Powerwall battery, producing approximately 17,280 kWh per year.
Option 1: Cash Purchase (Option One Solar Prepaid Program)
Regular system price: $32,000
25% prepaid discount: -$8,000
Your cost: $24,000
Effective cost per kWh: ~$0.08
You own the system outright. No monthly solar payment. That's buying tomorrow's energy at today's price.
Option 2: Financed Purchase (No Dealer Fees, No Points)
Financed amount: $24,000
Interest rate: 5.75%
Term: 20 years
Monthly payment: ~$168.50
Total paid over 20 years: ~$40,440
Effective cost per kWh: ~$0.12
After 20 years, the system is yours. No prepayment penalty — if you sell your home and want to pay it off early, you simply pay the remaining loan balance.
Option 3: Solar PPA
Annual production: 17,280 kWh
Starting PPA rate: $0.24/kWh
Year 1 monthly cost: ~$346
Annual escalator: 3.5%
Total cost over 25 years: ~$161,533
Read that again. The same system production through a PPA costs approximately $161,533 over 25 years.
The Comparison
Cash purchase (prepaid): $24,000 | ~$0.08/kWh
Financed purchase: $40,440 | ~$0.12/kWh
Solar PPA: $161,533 | $0.24/kWh (starting)
A PPA costs 6.7x more than a cash purchase. About 4x more than financing. For the cost of one PPA, you could prepay for solar on four to six homes.
The Kilowatt-Hour Rate Tells the Truth
Most lease and PPA salespeople show you a monthly payment. But the number that matters most is the true cost per kilowatt-hour.
We regularly see PPA and lease offers at $0.24/kWh or higher. Meanwhile, Option One Solar's ownership programs average $0.08/kWh for cash buyers and $0.12/kWh for financed buyers.
That means a homeowner signing a PPA at $0.24/kWh is paying two to three times more for the same electricity. That's not savings. That's a sales trap dressed up as savings.
The 30% Offset Trap
Many lease and PPA systems are intentionally underbuilt — designed to offset only about 30% of your electricity usage. That leaves 70% of your utility bill still there, rising at 7-10% per year on top of your PPA payment rising at 3.5% per year. You've traded one rising bill for two rising bills.
What That Looks Like Over 25 Years:
PPA payment starting at $90/mo with 3.5% escalator: $42,066
Remaining $350 utility bill increasing 7%/year: $265,664
Combined 25-year cost at 7% utility increases: $307,730
Combined 25-year cost at 10% utility increases: $455,123
A low-payment PPA that only partially offsets your bill leaves you paying $300,000 to $450,000+ over 25 years. That's how homeowners think they're saving — and end up trapped.
The Annual Escalator: Your Payment Rises Every Year
With ownership financing, your payment is fixed for 20 years. With a lease or PPA, your payment increases every year — typically 3-3.5% annually. Your Year 12 payment is about 40% higher than Year 1. By Year 25, you're paying significantly more per month than you started with — while your utility company is also raising rates.
The "Maintenance Included" Myth
Lease and PPA salespeople say: "Maintenance, monitoring, insurance, and battery replacement are all included." If the PPA costs $161,533 over 25 years and an owned system costs $24,000-$40,440, the homeowner is paying over $100,000 more for the lease/PPA structure. You're paying so much extra that they can afford to include maintenance and still pocket enormous margins.
A Tesla Powerwall battery replacement is under $5,000. An inverter replacement is around $2,000. Nobody overpays by $100,000+ to protect against future replacement costs that are a fraction of that. Look at the math. The math tells the truth.
The Prepayment Penalty Trap
If you finance through Option One Solar and pay off early, you pay the remaining loan balance plus accrued interest. Nothing more. No prepayment penalty. With a lease or PPA, early buyout is expensive — you're not paying off a loan, you're buying out a 25-year revenue stream the leasing company was counting on.
"But It Transfers When I Sell My Home"
Another claim: "A PPA is easy to transfer when you sell." The leasing company wants to keep that contract alive. A properly owned solar system is an asset. A high-rate, 25-year PPA with annual escalators is a liability the next buyer must be convinced to take over.
Hidden Commissions and the Broker Problem
At Option One Solar, inside sales earns 2% commission, outside reps earn 4%. Hidden $10,000-$20,000 commissions buried inside residential solar leases and PPAs are predatory. Brokers don't install, service, or stand behind the system — they sell the deal, collect a massive commission, and move on.
Why the Discovery Process Matters
A solar proposal should never be based on a quick guess, a satellite image, and a payment target. At Option One Solar, our discovery process reviews:
Actual historical usage and consumption patterns
Utility rate structure and time-of-use billing
Battery needs and backup power goals
Future energy plans (EV charging, pool, additions, heat pumps)
Roof condition, shading, and obstructions
Total cost of ownership
We don't just sell a payment. We design a system that's right for you. Under California's current utility rules, solar without the right battery strategy doesn't deliver its full potential.
So, Does a Solar PPA Ever Make Sense?
For residential homeowners in California, the honest answer is: almost never. PPAs can make sense for commercial projects, but for homeowners, the math overwhelmingly favors ownership.
10 Questions to Ask Before Signing Any Solar Contract
Before you sign, ask these questions — and demand answers in writing:
What is my true cost per kilowatt-hour?
Does my payment increase every year? What's the annual escalator?
What is the total 25-year cost?
Who owns the system — and do I ever own it?
What happens if I sell my home?
How much of my electric bill will remain after installation?
Is the system designed to offset 30%, 70%, or 100% of my usage?
Was my actual utility data reviewed or a satellite estimate?
What are the hidden commissions in this contract?
What would this system cost if I paid cash?
If the salesperson can't answer clearly — stop. Don't sign. Get a second opinion.
The Bottom Line
A PPA at $0.24/kWh with 3.5% escalator = $161,533 over 25 years. An owned system = $24,000-$40,440. That's a 4x to 6.7x difference.
Solar can be one of the best financial decisions you ever make — if it's designed correctly, priced fairly, and structured so you actually own the asset on your roof.
If you're considering a solar lease, PPA, or financing, talk to Option One Solar first. We'll review any proposal, show you the real math, and tell you the truth. Already have a solar quote? Don't sign yet — get a free proposal review.
Published by Option One Solar — Southern California's solar and battery experts. Serving San Bernardino, Riverside, San Diego, and Orange counties.
