Solar Escalation Clause Explained: The Hidden Cost in Your Contract

An escalation clause is a provision in your solar lease or PPA that increases your payment rate annually, typically 1-3% per year. Over a 20-25 year contract, this can dramatically increase your total costs.

How Escalation Clauses Work

If your initial rate is $0.15/kWh with a 2.9% annual escalator, by year 20 you'll be paying $0.26/kWh — potentially more than your utility rate.

Were You Properly Informed?

Many solar salespeople downplay or fail to clearly explain escalation clauses. If the escalator wasn't clearly disclosed, you may have grounds for cancellation.