What is a solar escalator?

An escalator is a clause in a solar lease or power purchase agreement that raises your payment or price per kWh by a fixed percentage every year, often 2% to 3.9%.

How much does a 2.9% solar escalator cost over 25 years?

A $150 monthly payment with a 2.9% escalator rises to about $298 by year 25 and totals about $64,772, roughly $19,800 more than a flat $150 payment.

Free tool

Solar payment calculator

Does your solar lease or PPA payment go up every year? Enter your numbers to see what that escalator really costs over the life of your contract.

Year-by-year payments

Contract year	Monthly payment	Paid that year	Running total
1	$150	$1,800	$1,800
6	$173	$2,077	$11,614
11	$200	$2,396	$22,936
16	$230	$2,764	$35,997
21	$266	$3,188	$51,066
25	$298	$3,575	$64,772

How the escalator math works

Each year your payment is multiplied by 1 plus the escalator rate. With a 2.9% escalator, a $150 payment becomes $154.35 in year 2, $158.83 in year 3, and keeps compounding. By year 25 it is about $298, almost double where it started.

Whether that's a good deal depends on how fast your utility's rates rise and how much power your system actually produces. If your system underperforms, you can end up paying a rising solar payment and a utility bill. Read more in solar escalator clauses explained and solar not saving money.

Estimates only. Your contract may calculate increases differently (for example per kWh on a PPA), include fees, or offer buyout options. Check your agreement.