Buying New Construction in California? Your "Included" Solar Might Be a Lease You Didn't Realize You Signed

Buying New Construction in California? Your "Included" Solar Might Be a Lease You Didn't Realize You Signed

Since January 1, 2020, California's Title 24 Building Energy Efficiency Standards have required solar on nearly every new single-family home and low-rise multifamily building in the state. If you've bought new construction in California anytime in the last several years, your home almost certainly came with solar. What a lot of buyers never fully register is what "came with" actually meant.



The Mandate Behind the Panels

The mandate doesn't require the builder to give you solar — it requires the home to have it. Builders satisfy that requirement in one of a few ways: building the cost of an owned system into the home's purchase price, arranging a lease or PPA through a preferred solar partner, or in some cases participating in a shared community solar arrangement for the development. Which one you got depends entirely on how your specific builder chose to comply, and that decision was made long before you walked into the sales office.

Owned, Leased, or PPA — the Builder's Solar Partner Decides, Not You

Production home builders frequently sign exclusive arrangements with a single solar company — historically names like SunPower, Sunrun, or Sunnova — to handle every home in a subdivision. That solar company isn't selected by you, and you typically aren't shopping the deal the way a homeowner adding solar to an existing house would. The financing structure — owned, leased, or PPA — is usually determined at the development level, not negotiated house by house.

This matters because a leased or PPA system means you don't own the panels on your brand-new home, and you're carrying a 20- to 25-year monthly obligation to a company you may never have directly chosen or spoken with before closing.

Buried in the Closing Paperwork

A home purchase closing involves dozens of documents signed in a short window: the purchase agreement, the mortgage, disclosures, warranties, and — if the solar is leased or a PPA — a separate solar contract with its own term, its own escalator clause, and its own transfer-approval requirements if you ever sell.

Because it's presented alongside everything else in the closing stack, it's easy to sign without registering that it's a freestanding 20-year contract, structurally identical to a lease sold door-to-door — with the same escalator clauses, the same transfer-approval hurdles at resale, and the same difficulty getting out early that we cover in our guide to canceling a solar lease in California.

What Happens If the Builder's Solar Partner Goes Bankrupt

New-construction solar isn't insulated from the wave of installer and lender bankruptcies that's hit California's solar market. If the company your builder partnered with — SunPower or Freedom Forever among them — has since filed for bankruptcy, your lease or PPA doesn't disappear with it. It typically gets sold or assumed by a successor entity, the same way it would for any other homeowner's contract, and you're left navigating a bankruptcy process for a system you never independently selected in the first place.

Red Flags Worth Checking

• You don't know whether your new-construction solar is owned, leased, or a PPA — many new-home buyers genuinely don't
• You never received a standalone copy of the solar contract separate from your closing documents
• Your mortgage payment and your solar payment are two separate bills, and nobody explained that clearly at closing
• The builder's preferred solar partner has since gone bankrupt, been acquired, or rebranded
• You're planning to sell and just learned the solar has to be transferred or bought out — the same complication covered in our guide to selling a home with a solar lease

What to Do

1. Pull your original closing documents and find the solar contract specifically — it should be a standalone agreement, not just a line item in the purchase agreement.
2. Determine ownership structure — owned, leased, or PPA — since that changes every option available to you.
3. Check whether the original solar company is still in business and, if not, who currently holds the contract.
4. Compare what was disclosed about the solar system at closing against what you're actually paying now.
5. If the solar terms were never clearly disclosed as a separate obligation, that's worth a professional review, the same as any other misrepresented solar contract.

Frequently Asked Questions

Does California's solar mandate mean my new home's system is owned outright?
Not necessarily. The mandate requires the home to have solar; it doesn't require the builder to give you ownership. Builders satisfy the requirement with owned systems, leases, or PPAs depending on their arrangement with their solar partner.

Can I opt out of solar on new construction in California?
Limited exceptions exist for homes with insufficient roof space or heavy shading, but for most new single-family and low-rise construction, solar of some form is required by the building code, not optional.

If my builder's solar partner went bankrupt, do I still owe payments?
Yes. A bankruptcy typically transfers or sells the contract to a new servicer; it doesn't cancel your payment obligation.

Is a builder-bundled solar lease any different legally from one sold door-to-door?
The underlying contract terms function the same way — same escalator clauses, same transfer requirements — but the sales context is different, which can matter for a misrepresentation claim if the solar terms weren't clearly disclosed as separate from the home purchase itself.

Not sure whether your new-construction solar is owned, leased, or a PPA — or dealing with a builder's solar partner that's gone bankrupt? California Solar Exit reviews solar contracts for homeowners across Los Angeles, Orange County, San Diego, the Inland Empire, Sacramento, and the Bay Area.

Call (213) 579-5156 for a free review, or book a consultation online.

Daniel Merritt, Senior Solar Contract Analyst
California Solar Exit — this content is for general informational purposes only and does not constitute legal advice or create an attorney-client relationship.