Solar leases, PPAs and loans: the questions to ask before you sign any of them

The ways to pay, and the question that comes first

A company may offer to sell you the system for cash or on a loan, to lease it to you, or to sell you its power under a power purchase agreement (PPA). Whichever it offers, the first question is the same, and it’s short: what’s the total you’ll pay, including every financing cost and fee?

For a system finished in 2026 there’s no federal credit to fold into that total. The IRS says the Residential Clean Energy Credit “is not available for any property placed in service after December 31, 2025.” If a quote ties its price or payment to a federal credit, ask the company to point to the IRS page it relies on.

The Michigan and California sections below are separate, because the rules written down for each state are different.

Michigan: what the state’s agencies and utilities say

Loans and the Attorney General’s case

On July 15, 2026 the Attorney General sued Climax Solar, its owner and financing companies. The Attorney General alleges a scheme affecting approximately 1,700 Michigan consumers and about $81 million in financed transactions, in violation of the Consumer Protection Act and the Home Solicitation Sales Act. The complaint alleges hidden dealer fees of more than $22 million, averaging more than 27 percent of the amount financed, and funds released before systems were finished or utility-approved. These are allegations, in a case before the U.S. District Court for the Western District of Michigan.

Two questions follow from what the case alleges. Ask for the total financed price and every fee before signing, and check that the system is finished and approved by the utility before payments start. In writing, the first one reads: “What’s the total I’ll repay, and what part of the financed amount is a dealer fee?”

Nationally, Berkeley Lab’s 2026 Data Update puts the median installed price of host-owned residential PV installed in 2025 at about $3.0 per watt for known cash purchases and about $4.5 per watt for known loan-financed systems, before incentives. Those are bar labels from a chart, they’re not Michigan figures, and third-party-owned systems are left out. Ask each company for its cash price and its financed price on the same page.

Michigan Saves

Michigan Saves calls itself “The Nation’s First Nonprofit Green Bank.” It was incorporated as a 501(c)(3) nonprofit in 2009, after a grant funded the design of an energy-financing system, and it operates as an independent nonprofit organization. The Michigan Public Service Commission calls it a Michigan based nonprofit organization and says its financing needs a Michigan Saves solar contractor. Consumers Energy, Lansing BWL, Grand Rapids and the MPSC all point homeowners to Michigan Saves to find contractors.

Michigan Saves’ own pages don’t print loan rates, terms or limits, so get those from the lender in writing, with the total repaid, before you set it beside any other offer.

Pitches to treat with care

Consumers Energy tells customers to avoid anyone who promises “you will not receive an electric bill,” claims you can be independent of the grid, or offers solar “with no upfront cost.” It also says it “does not endorse, certify, or recommend renewable contractors.” EGLE says it isn’t aware of any state or federal programs providing solar installation at no cost. If a lease or PPA is sold to you as costing nothing up front, ask to see every payment over the whole term.

Leases and PPAs in Michigan

Before you sign a lease or PPA, get these answers from the company in writing:

1. Can the contract transfer to a buyer of the home, and what does the buyer have to do?
2. Who’s responsible for repairs, for the inverter and for roof penetrations?
3. What happens at the end of the term (removal, renewal or purchase), and what does each cost?
4. How is the monthly payment or per-kWh rate set, and can it change?
5. Who files the utility application and pulls the city permit?

The Michigan Public Service Commission’s tips are to get at least three bids, to ask whether the company is licensed and insured and what warranties come with the system, and to ask for three customer referrals. Deceptive solar marketing can be reported to the Attorney General at 517-335-7622 or MIAG@Michigan.gov.

California: what the law puts on the page

CSLB’s bulletin 20-22 says “the installation of a residential solar system is considered home improvement,” so the contract has to follow the home improvement contract rules.

Financing paths and PACE

CSLB’s Solar Smart page lists buying (cash or loan, including PACE-type programs), leasing and PPA. PACE financing needs a separate financing estimate and disclosure before signing. For PACE, the Streets and Highways Code 5898.17 Financing Estimate and Disclosure satisfies section 7169 for the financing contract only.

The disclosure cover page

Business and Professions Code 7169 requires the Solar Energy System Disclosure Document on the front page or cover page of every solar energy contract, in boldface 16-point type. It shows the total cost and payments including financing costs, how and to whom customers may complain, and the buyer’s cancellation right. The contract and the disclosure must be in the language principally used in the oral sales presentation or the marketing material. CSLB’s form has a line for the total cost of the system, “including financing and energy / power cost if applicable,” as a dollar amount. That’s the line to read first when you set a loan, a lease and a PPA side by side.

Payments and cancellation

A contractor can’t ask for or take a down payment of more than $1,000 or 10 percent of the contract price, whichever is less. Apart from that, no payment may exceed the work performed or materials delivered. The contract must state the price and progress payments in dollars and cents, with approximate start and completion dates. CSLB’s supporting information form puts it plainly: “Except for a limited down payment, it is against the law for a contractor to collect payment for work not yet completed.”

Under Business and Professions Code 7159 you can cancel within three business days, or within five if you’re 65 or older on a contract entered on or after January 1, 2021. If you cancel, the contractor must return anything paid within 10 days of receiving the notice.

CSLB’s Solar Smart page adds three steps: “do not allow your financial institution to make loan payments to your contractor before the work is performed,” get mechanics lien releases signed, and get savings and production claims in writing.

Questions for a lease or PPA

CSLB’s supporting information form asks whether subcontractors will be used, whether the deal is a PPA or lease (where the customer doesn’t own the system), whether the contract can transfer to a new homeowner, and what the loan or financing terms are. Put the same questions to any company. Solar salespeople generally must be registered home improvement salespersons with CSLB, unless the buyer started the sale at a fixed-location retail storefront.

CSLB receives and reviews complaints about solar companies and reports them each year. Its number is 800-321-CSLB (2752).

What to do with an offer

Get one written page from each company that names the type of contract, the total you’ll pay over the whole term, the system size in kW DC, and whether the contract transfers when you sell. Then line up the totals. The quote comparison guide has the rest of the list, and solar and a home sale covers what happens when the house sells.