Hi Matt, There could be a few issues going on.

First how much sun are you giving it? When a tree is young and in a container, it's generally better to give it some afternoon shade (both container and leaves, but especially container). The fact the yellow portions are all on the same side of the fruit indicates sun burn. Generally once the tree has a lot of leaves and can protect it's trunk, branches, and container is when it's good to put it in more sun. When it comes to containers in summer here in AZ, I always say more shade is better, to an extent of course :)

Another issue is if they get that much watering, they also need more feeding. When I have plants that I water frequently (most of my potted plants), I give them bursts of nitrogen through the month by adding some ammonium sulfate to their water. I should note that Citrus like a period of dryness (or just constant surface dryness) when they are in the ground, but this doesn't apply as much in containers and can be very risky if you let the soil dry out too much (especially with that much perlite). It might be worth it to try waiting on watering for a few days once the soil is very saturated, but keep in mind to not ever let it completely dry out. It's much safer to give them surface dryness once you start using larger containers (10 gallon or larger).

In summary, I think it's mainly too much sun for a containerized lemon tree. I would change that factor before changing the watering or anything else. Even one that's young and put into the ground does well with a little shade at first. Eventually when they get bigger they can handle, and love, lots of sun. They don't need much fertilizer and if the tree spikes are doing their job, it should be enough.

Another thing, the sun will be getting less intense right about now and into winter so it might not be too bad for it to get a little sun now, but try to keep it to morning or late afternoon sun while it recovers.

Hi Matt, please get rid of that fertilizer spike. They are no good for potted plants and can actually burn your citrus roots. Citrus need a good fertilizer with NPK with nitrogen being the highest. They need micro and macro nutrients to grow and thrive. Foliage pro is a good fertilizer for citrus..along with Dyna gro..It has all the right micro and macro nutrients that citrus needs A few questions..What size pot are they in? Does your pot have lots of drainage holes? What kind of potting mix did you use? You want a well draining potting mix. Citrus hate having wet feet and soggy soil..you want the roots to have good aireation..Look up gritty mix and 5-1-1. Also, do you know what the pH of your water is? While iandyaz gave you some good advice, I would post your questions and pictures over on the citrus forum. Lots of very helpful and knowledgeable people over on that forum. Sun, we'll draining potting mix, fertilizer with nutrients, the right amount of water and checking for pests consistently will help keep your citrus healthy and thriving.. Good luck.

Yeah, having it on the east side of the house during summer would help a lot. I think it's mainly the overhead and western exposure that will hurt the plant, but as we get into fall it matters less and less, although you probably want it to have a recovery period, and if it were me, I'd remove the fruit so it can put more energy into roots and leaves.

TBH I don't know if ammonium sulfate would be a good idea for a citrus. I use it for most of my potted plants because most of my plants do better with neutral or acidic soil (which is what ammonium sulfate does over time), but I'm pretty sure citrus do better with slightly alkaline soil. I've used Dyna gro on some plants like Jinnylea suggested and I've had good results so that might be a better option for getting it some quick nutrients.

Another thing Jinnylea brings up that might be something to look into- if you are giving it a lot of water when you water it, it's possible it could be retaining a lot of that water in the soil. Try not to soak the soil when watering it, I would recommend just giving it a slow trickle of water when you water it, and only for a few minutes. The only time I ever completely soak the soil of a container is when I first pot a plant and that's mainly to remove air pockets in the soil, and help with settling.

Hello all,

I just thought I'd update everyone on my tree since making the changes.
First I moved the tree to the SE side of the house to get some afternoon shade. I also bought a water/pH/light meter to have a better idea of what's going on. I noticed that the soil was still wet even though the surface looked dry. I was definitely overwatering! I removed all of the fruits and the severely sun damaged leaves. Lastly I put flat stones under the container so it isn't sitting in stagnant water when it rains. I have a good amount of new growth and it is looking pretty healthy again!
I want to thank you all for your suggestions and tips!
I also made some of these changes to my Santa Rosa Plum Tree and it is starting to grow nice leaves as well!

Thanks,
Matt