Key Takeaways
- Nearly two-thirds of solar sales companies expect most 2026 projects to be third-party owned, with 55% of installers calling TPO their most-used financing structure.
- The Section 25D tax credit expired December 31, 2025. Prepaid solar leases and PPAs get around that by keeping ownership with a third party who claims the commercial credit under Section 48E instead.
- Lessor coverage (monitoring, maintenance, repairs) ends at ownership transfer, usually around year six. What’s left is manufacturer warranty coverage, which is parts only, not labor or truck rolls.
- 53% of installers say prepaids confuse homeowners; 43% say prepaid providers are hard to vet, per Ohm Analytics.
- SI-30 covers the post-transfer gap with consistent terms regardless of lessor or financing type.
- Approved prepaid lessors: HDM Renewable Finance (Maxwell Power), Participate Energy, Propel by Concert Finance.
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Nearly two-thirds of solar sales companies expect most of their 2026 projects to be third-party owned, and 55% of installers say TPO has already become their most-used financing structure.
Prepaid leases and PPAs sit at the center of that shift, and for good reason. We’ve discussed prepaids, how they work, and why companies and homeowners are drawn to them before.
But the same structure that makes prepaid solar attractive also creates a coverage gap most homeowners never see coming, and it’s one homeowners need to know about, and your sales team needs to be able to answer.
Table of Contents
Why Prepaids Took Over in 2026
The residential solar tax credit under Section 25D expired on December 31, 2025. Homeowners who buy a system with cash or a loan can no longer claim the 30% federal credit directly. Prepaid solar leases and PPAs solve that problem by keeping ownership with a third party for the first several years, typically six, while that party claims the commercial tax credit under Section 48E and passes some of that value back into the price.
The homeowner prepays the system’s value upfront, minus anywhere from 10-30% depending on how much the lessor is passing along to the customer, sometimes financed through a loan, in exchange for a system that costs meaningfully less than a direct purchase. After the six-year mark, ownership can transfer to the homeowner at little or no additional cost. It’s a real, defensible way to get homeowners into solar ownership faster, and it’s a big reason prepaid solar has become a standard offering rather than a niche financing option.
The Warranty Coverage That Comes With a Prepaid
During the prepaid solar term, coverage looks strong. Two layers are typically in place:
Manufacturer warranties. Panels, inverters, and optimizers come with standard manufacturer coverage, usually 10 to 25 years depending on the component. These warranties cover parts. They generally do not cover labor, truck rolls, or diagnostic time, which is a distinction most homeowners never learn until they need a repair.
Lessor coverage. While the third party owns the system, they’re responsible for monitoring, maintenance, and repairs. If an inverter fails in year three, the lessor sends someone out and covers the cost. This is one of the most attractive parts of the prepaid pitch. For the length of the hold period, the homeowner is genuinely protected.
The problem is what happens once the system transfers ownership.
Where the Coverage Actually Falls Apart
Ownership transfer is the moment prepaid coverage gets complicated, and it’s the part sales conversations tend to gloss over.
Once the lessor’s hold period ends and the system transfers to the homeowner, the lessor’s maintenance obligation ends. What’s left is whatever manufacturer coverage remains on the equipment, and that coverage still only covers parts. A failed inverter in year seven, right after a homeowner has gotten used to being fully covered, now means a full-cost service call: parts might be free, but labor, diagnostics, and the truck roll are not. That’s a bill many homeowners never budgeted for, arriving at the exact moment they thought they’d finished paying for solar.
And for solar installers, who have likely been the ones doing any maintenance for the homeowners up to this point, it means they now need to have difficult conversations with upset homeowners, or eat the cost of service.
Ohm Analytics research backs up how often this trips up the sales process itself. 53% of installers say prepaids are confusing to homeowners, and 43% say prepaid providers are hard to vet or trust. Both numbers point to the same root issue: homeowners and even sales reps don’t have a clear, consistent answer for what happens after the transfer.
There’s a second, quieter risk here too. Lessors may utilize O&M teams other than the original system installer during the hold period, taking away the relationship between the customer and original installer. If that relationship isn’t there, that’s potential lost business for an installer.
Why Solar Insure Is Vital to a Prepaid Solar Deal
This is the exact gap SI-30 was built to close, and it’s why we’d encourage every provider running prepaid deals to include it as standard practice, not an upsell.
It answers the question every rep hears. “What happens to my system in year six?” is the most common objection on prepaid deals. With SI-30 in place, the answer doesn’t change based on ownership timing, which lessor is involved, or whether the original installer is still in business.
It doesn’t add complexity to an already complex sale. SI-30 carries the same terms whether the system was purchased with cash, a loan, or a prepaid lease. Reps don’t have to learn a separate set of rules for prepaid customers.
It’s independent of the lessor. Every approved lessor handles ownership timing and transfer costs a little differently. SI-30 is the one constant a provider can promise regardless of which lessor the homeowner ends up with.
It keeps the provider in the relationship. An SI-backed warranty applied at the point of sale gives the homeowner a reason to come back to the original provider, not just the lessor’s O&M arm, when something needs attention after transfer.
It’s a close-rate lever. A rep who can answer the year-six question with confidence closes more prepaid deals than one who has to hedge.
None of this replaces the coverage a homeowner already gets during the prepaid term. It picks up exactly where that coverage ends.
Currently Approved Prepaid Lessors
Solar Insure is currently approved to work with:
- Maxwell Power (formerly HDM Renewable Finance)
- Propel by Concert Finance
The above options are the most well-known national names, but we’ve also approved our warranties with some smaller, regional prepaid options. If you are curious which options are available with SI-30 warranties, contact your Account Manager or our customer service team at 714-625-8204.
If you’re working with a prepaid lessor that isn’t on this list, submit it for review: https://www.solarinsure.com/prepaids#Apply-to-Align
We’ve also put together a Prepaid 101 guide for homeowners that walks through how these structures work in plain language. If you’d like a co-branded version to hand to prospects, request one here: https://airtable.com/app0mPUShjuWxQGwV/pagqfTEh3AjhQhoL8/form
Download our homeowners guide to prepaids:
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