Why the War Between Financiers and Hardware Giants Is Keeping Solar Expensive—and How We’re Taking Control Back

In Australia, a homeowner can buy a rooftop solar system for well under $1.00 per watt—often $0.50 to $0.80 USD per watt fully installed—and add modular home batteries at commodity global prices. Even with lower retail electricity rates than California, Australian systems routinely pay for themselves in three to five years. At a five-year payback (roughly a 20% annual return on capital), solar and storage stop being an agonizing financial decision that requires a high-commission salesperson at the kitchen table. They become an obvious, word-of-mouth household upgrade, no different from replacing a water heater. Nearly one in three Australian homes now has rooftop solar.

Meanwhile, in Northern California, PG&E residential electricity rates have climbed 69% over the past decade to $0.45–$0.60+ per kilowatt-hour. Physics and rate math say the Bay Area should be the fastest-payback solar-and-battery market on earth. Instead, most Bay Area homeowners collecting quotes from traditional solar companies see $45,000 to $65,000 price tags and 10- to 13-year payback periods.

When energy researchers like Saul Griffith (author of Electrify and co-founder of Rewiring America) and solar pioneer Andrew Birch analyze this gap alongside data from Lawrence Berkeley National Laboratory’s Tracking the Sun report and NREL’s cost benchmarks, they point out that raw hardware—the silicon solar cells and lithium-iron-phosphate (LFP) battery cells—now accounts for a small fraction of what an American homeowner pays. Roughly 65% to 70% of the U.S. price tag is non-hardware "soft costs."

To be fair, part of that gap is physical and regulatory: California enforces strict structural, seismic, and fire codes, municipal permitting is fragmented across hundreds of local building departments, and navigating PG&E’s NEM 3.0 Solar Billing Plan requires hourly battery optimization. But those local engineering realities are only half the story. The deeper reason U.S. prices remain stuck—and why most installers cannot engineer around those local frictions—is a broken four-party power structure.

Every residential or small-business solar and battery project involves four distinct actors:

• The Homeowner: who provides the roof, pays for the electricity, and lives with the equipment for 25 years.
• The Local Installer: who surveys the property, engineers the electrical tie-in, pulls the permits, climbs the roof, bends the conduit, and answers the phone when something goes wrong.
• The Hardware Company (OEM): who manufactures the solar panels, inverters, and batteries.
• The Financing Company: who underwrites the lease, power purchase agreement (PPA), or solar loan, and monetizes tax credits.

In a healthy market, the homeowner and the local engineer-installer run the project, while hardware manufacturers and capital providers compete in the background as transparent commodity inputs. Over the past decade in the United States, that hierarchy inverted completely. Today, the homeowner and the installer have been boxed out of decision-making while a quiet war for control is waged between national financing companies and incumbent hardware giants.

If you look under the hood of a typical U.S. solar company, the installer is no longer acting as an independent engineer. National financing companies dictate nearly every aspect of the installer’s business: exactly which equipment brands they are allowed to install, how much battery or inverter capacity they can pair together, which software tools they must use to model solar production, which mobile apps their crews must use on site, and what monthly installation volume quotas they must hit to remain an approved dealer.

From the financing company’s perspective, this total control is rational: Wall Street asset-backed securitization desks are underwriting portfolios of tens of thousands of roofs from afar, so they believe that because they hold the capital risk, they must standardize and control every variable.

When it comes time to pay the installer for completed work, national financing companies operate like an insurance company’s claims-denial department—searching for any technicality to delay or withhold payment. Installers are routinely required to upload 40 to 60 stage-by-stage photos into the financier’s portal. If a single photo of a serial number or conduit run is missing, framed at the wrong angle, or uploaded at insufficient resolution, the financier freezes tens of thousands of dollars in installer working capital. That financial friction and administrative bloat does not disappear; every dollar of it is padded into the price quoted to the homeowner.

The fatal flaw in the national financier model is that electricity tariffs, building codes, and housing stock in the United States are hyper-local. A risk committee in New York, Utah, or Florida does not know how to optimize a system for a 1920s San Francisco home with a 100-amp main panel, a steep clay-tile roof, California Residential Code R330.8 garage clearances, CleanPowerSF versus Ava Community Energy rates, and PG&E’s late-summer evening export tables. True value engineering has to be done region by region, utility by utility, and inspector by inspector. By stripping engineering discretion away from the local installer, national financiers outlaw the exact local optimizations required to bring costs down.

Worse, national financing companies are structurally incapable of delivering good long-term customer support. Because they treat installation as interchangeable commodity labor, they route jobs to the lowest-bidder installation crews. Then, three years later when an inverter faults or a communication gateway drops offline, the homeowner calls the financier’s 1-800 number—and hits a wall.

Why? Because the financing company has no local electricians of its own. Every time you call for service, the financier’s financial incentive is to deny or slow-walk your ticket so they can avoid signing a one-off service contract to pay another company $500 to $1,000+ just to drive a truck to your house. And when a third-party subcontractor finally shows up weeks or months later, they arrive with zero context on how your home was wired or why your system was configured the way it was.

If national third-party financing companies create so much friction, why don’t all installers simply offer straightforward customer-owned cash sales? Personally, we love the simplicity of direct customer ownership—and we offer it on every proposal. But federal tax policy created a massive structural distortion that every honest installer has to confront.

When Congress passed the One Big Beautiful Bill (OBBB), it ended the 30% residential tax credit (§25D) for homeowners buying systems directly in 2026, while leaving the commercial investment tax credit (§48E) and accelerated depreciation intact for commercially owned systems. Those commercial ownership incentives are so large that it is nearly impossible for an installer to deliver the lowest upfront cost to homeowners—or scale a healthy business to reach true economies of scale—without capturing them.

Most local installers responded by surrendering to national Third-Party Ownership (TPO) financiers, handing over control of their hardware stack, their pricing, and their customer relationship just to access that commercial tax credit.

We refused to make that trade. Instead of handing your roof over to a Wall Street lease company, Potrero built our own Prepaid Energy Service in-house. Under the Prepaid Energy Service, you pay a single upfront service fee that is 20% lower than a direct cash purchase, with $0 monthly payments and no escalating lease bills. We capture the commercial tax credit value, pass the upfront savings directly to you, fund a dedicated 25-year Operations and Maintenance reserve, and give you a clean path to take direct title to the equipment after the initial five-year tax compliance window at an expected $0 net buyout. Until federal subsidies stop favoring commercial ownership over simple customer ownership, bringing that structure in-house is how we cut out the third-party financier and keep control with you and the engineers who built your system.

While financing companies squeeze the market from one side, incumbent hardware manufacturers squeeze it from the other. Because financing companies are intensely risk-averse, they restrict their Approved Vendor Lists (AVLs) to a tiny handful of heavily capitalized, incumbent brands. On many financing platforms, an installer is effectively barred from installing anything other than Tesla or Enphase.

Meanwhile, hardware manufacturers spend millions of dollars and jump through endless bureaucratic hoops trying to buy their way onto financing companies’ Approved Vendor Lists. Those gatekeeping costs—along with the massive brand overhead of closed-ecosystem incumbents—are passed straight to the homeowner. That is why a homeowner gets quoted $15,000+ for a single 10 to 13.5 kWh proprietary battery, when modular, UL-9540 commercial-grade 48V lithium-iron-phosphate batteries (like the EG4 PowerPro units we install) deliver nearly three times the storage capacity (28.6 kWh) for the same investment.

At the same time, both the financing companies and the hardware OEMs are waging a tug-of-war to control your smartphone app—and your wallet after installation:

• Secretly scraping off-bill grid revenue: During California’s peak summer evenings, a home battery can earn hundreds of dollars per year supporting the grid through demand-response and Virtual Power Plant (VPP) programs. National financiers and closed OEMs routinely bury clauses in their terms of service that enroll your battery and quietly scrape off the lion’s share of that revenue for themselves.
• Walled-garden appliance lock-in: Both financiers and hardware OEMs want to own the app on your phone so that when you add an EV charger, a smart electrical panel, or a second battery, you are forced to buy their overpriced proprietary accessory rather than an open-standard product.
• Cutting out the local installer: By locking the software layer in a proprietary cloud, OEMs and financiers shut out the local installer—even though the installer is the only party who can actually drive to your property and service the physical electrical system.

Reaching Australian-level prices and a 5-year payback in California is not a pipe dream—it is an engineering and market-structure problem. When you return total visibility and control to the local engineer-installer in direct partnership with the homeowner, every layer of bloat starts to fall away:

First, we value-engineer the hardware through modularity. Think of Potrero like Costco for home energy: if you only want a tiny system, we are a bit below average on price, but when you want to go big—sizing a battery bank for true whole-home backup, heat pumps, and EV charging—our open-protocol architecture (shade-tolerant Optivolt panels, EG4 hybrid inverters, and EG4 PowerPro batteries) creates a massive structural price separation.

Second, we optimize locally from start to finish. Because a single dedicated Potrero project manager and our in-house Bay Area field team oversee your project from design through commissioning, we can use automated SolarAPP+ permitting where eligible, engineer clean conduit runs that pass local inspection the first time, and configure your system around your exact PG&E and local CCA rate schedule.

Third, we replace hidden revenue scraping with a clean 50/50 partnership. Through the Potrero Energy Management Service (EMS), our local computer optimizes your battery for bill savings and grid-support programs at $0 software cost—and every dollar of extra off-bill grid revenue your battery earns is split 50/50 between you and Potrero. Our incentives are 100% aligned with yours.

Finally, what about the classic question financiers use to justify their bureaucracy: "What if a local installer goes out of business?" Our conviction is simple: you protect a homeowner through open engineering standards and dedicated reserves, never through a walled garden. Because every piece of hardware we install uses open, non-proprietary protocols, any licensed electrician can service, swap, or expand a component in 2036 without tearing out your system—and under our Prepaid Energy Service, a co-funded Operations and Maintenance reserve is ring-fenced specifically to keep your system running for 25 years.