At SolarCity, which pioneered the no-money-down solar leasing model, losses have accrued in 12 out of 15 quarters as a publicly traded company even as it tapped into swelling consumer demand. It agreed in August to be acquired by Musk's Tesla Motors Inc. after racking up $3.35 billion in debt to fund growth.

"The trap that residential solar companies have been caught in is trying to get as much market share and volume at all costs," said Angelo Zino, an analyst at S&P Global Market Intelligence in New York. "The winning approach would be focusing on value creation. It's being able to sell your product at a higher price than what it costs to install it."

The rooftop solar business model is under attack on several fronts. The industry relies on so-called net-metering policies, where consumers sell excess power back to local utilities. As solar gets more popular, utilities are pushing back by attacking net-metering programs in multiple states.

"Every single country that has done solar eventually scales back significantly and reduces its incentives because it has negative consequences on the grid," said Gordon Johnson, an analyst at Axiom Capital Management Inc. in New York.