Updated August 25, 2026. Quick answer: The escalator is not a detail of a solar lease. On a 20- or 25-year term it is the economics of the deal. A payment rising 2.9 percent a year is about 1.29 times its starting figure by year 10 and about 1.72 times by year 20, and the sales presentation almost never shows the last year next to the first.
What an escalator is, in the seller’s own words
The CFPB describes power purchase agreements carrying escalators “that increase the rate in future years and range from 1 to 5 percent”, on typical contract lengths of “six to twenty-five years”.
Sunrun’s own annual report to the SEC confirms the same mechanism from the other side of the table: “Our Customer Agreements are typically for 20 or 25 years and require the customer to make monthly payments to us,” and “the majority of unbilled receivables arise from fixed price escalators included in the Company’s long-term Customer Agreements.” The escalator is not incidental – it is a significant part of what the contract is worth to the company.
What compounding does over a full term
| Escalator | Year 1 | Year 5 | Year 10 | Year 15 | Year 20 | Year 25 |
|---|---|---|---|---|---|---|
| 1% a year | 1.00× | 1.04× | 1.09× | 1.15× | 1.21× | 1.27× |
| 2.9% a year | 1.00× | 1.12× | 1.29× | 1.49× | 1.72× | 1.99× |
| 5% a year | 1.00× | 1.22× | 1.55× | 1.98× | 2.53× | 3.23× |
Multipliers on the year-one payment, computed from the contract rate alone. The 1% and 5% bounds are the CFPB’s reported range; 2.9% is a worked example, not a market average.
A $120 monthly payment at 2.9 percent is about $155 in year 10 and about $207 in year 20; the same payment at 5 percent is about $186 and about $303.
Then the term ends and the rate resets
Sunrun states that after the initial term “our Customer Agreements typically automatically renew on an annual basis and the rate is initially set at up to a 10% discount to then-prevailing utility power prices”. Whatever the pitch said about locking in a rate, the lock has a defined end, and what follows is indexed to the utility price you were told you were escaping.
The comparison the pitch does not run
A useful pitch shows the year-one payment, the final-year payment, and the total across the full term. If a presentation gives you only the first of those three, the other two are the ones to ask for in writing before signing anything.
The other comparison a lease presentation does not run is against owning the equipment outright, where there is no escalator to compound because there is no recurring payment to escalate. Buying installed and buying a kit to install are both on that side of the ledger; this site’s solar kit matcher sorts the second one by project type, utility situation, load range and storage. Neither is automatically the better deal – but a full-term total is the only number that compares them honestly.
What this page does not settle
Scope: the 1 to 5 percent range is the CFPB’s (August 2024); the 2.9 percent used in the table is a worked example, not a market average – no source read here measures one. Sunrun’s filing proves the mechanism, not the market. No forecast of utility rates is published here, so this page compares the contract to itself rather than to a prediction.
Sources
- CFPB, Issue Spotlight: Consumer Risks in Solar Financing (Aug. 2024) — https://files.consumerfinance.gov/f/documents/cfpb_solar-financing-issue-spotlight_2024-08.pdf
- Sunrun Inc., Form 10-K for FY2025 — https://www.sec.gov/Archives/edgar/data/1469367/000162828026012289/run-20251231.htm
- Sunrun Inc., Form 10-K for FY2025, Notes to consolidated financial statements — https://www.sec.gov/Archives/edgar/data/1469367/000162828026012289/run-20251231.htm
- Sunrun Inc., Form 10-K for FY2025, Risk Factors — https://www.sec.gov/Archives/edgar/data/1469367/000162828026012289/run-20251231.htm
Related: What Happens to a Solar Lease When You Sell the House – or When You Die · The Solar Loan Dealer Fee · what other liens on a home cost.
General information drawn from the primary statutes, regulations and filings named above, not legal, tax or financial advice. Read your own governing documents or contract before relying on any general description, including this one.