That is a major hindrance to the expansion of rooftop solar in the U.S., says Hamilton Davis, energy and climate director at the South Carolina Coastal Conservation Alliance. Rooftop-solar leasing "has been very successful in advancing solar in Arizona, Colorado, Massachusetts" and several other states, he says, "but it's illegal in most of the Southeast," which has extensive solar resources that remain almost entirely untapped.

"The utilities realize that solar is here to stay because their customers want it," says Ken Button, president and co-founder of Verengo. "Companies that got their start developing large-scale non-utility powerplants also want a piece of the rooftop-solar market."

Jeff Holland, spokesman for NRG Solar, a subsidiary of independent power giant NRG Energy, Princeton, N.J., says NRG owns or is developing about 2,000 MW of utility-scale solar projects and now is entering the rooftop-solar sector in a big way.

"We're working with a number of [solar] distributors in several states," says Holland. Noting that solar regulations are different in each jurisdiction, he adds, "We are still working through what the best strategy will be" for each locale.

SolarCity, preparing to fend off new rooftop-solar competitors from the utility and independent power sectors, is acquiring other solar companies—in August, it bought Paramount Solar—and forming alliances with electricity retailers that sell power directly to residential, commercial and industrial customers in states that have deregulated their power markets.

The competition is growing. To be a winner in the expanding rooftop-solar market, says SolarCity's Bass, companies will have to include high levels of customer service, fast and simple installation, and solar-power costs that are lower, not higher, than what customers get from their local utility.