The federal solar tax credit expired. Most homeowners don't know the workaround.

On December 31, 2025, the federal Residential Clean Energy Credit — the 30% tax credit that millions of homeowners used to offset the cost of going solar — quietly expired. For most homeowners thinking about solar in 2026, that's a $5,000–$15,000 gap that needs to come from somewhere.

Here's what most people don't realize: the credit didn't fully disappear. It just shifted who can claim it.

What expired and what didn't

Two things happened at once. The version of the credit that individual homeowners could claim on their personal taxes ended December 31, 2025. But the commercial version of the Investment Tax Credit (ITC) — the one businesses claim when they own and lease equipment — is still very much alive.

That distinction is the whole game.

How the prepaid lease works

The workaround is a structure called a prepaid lease. Here's the short version:

• A third party (the lease provider) owns the solar system on your roof
• Because they're a business, they qualify for the commercial 30% ITC
• They pass that savings through to you in the form of a discounted upfront lease price
• You make one upfront payment and own the energy production for 25 years
• 25-year system warranties and ongoing maintenance are included
• At year 6, you have the option to take ownership of the system outright

The credit isn't gone — it's just being captured by a different party and rebated to you through the lease price.

Two ways to pay the prepayment

Most homeowners don't pay the lease in cash up front. There are two paths:

1. Finance it through our partners. We work with financing partners offering rates as low as 4.99% APR for qualifying applicants, with no down payment and no out-of-pocket fees. The financed payment is locked in for the life of the loan — no rate hikes, no surprises. Final rate depends on credit qualification.

2. Pay cash. If you have the capital available and prefer to skip financing entirely, paying the prepaid lease in cash is fully supported.

Either way, you end up with the same 25-year system, the same warranties, and the same ownership option at year 6.

Why a fixed payment is the real win

Even setting the tax credit aside, the structure of solar payments is a bigger deal than most people realize.

Right now, you're renting your power from the utility. They don't owe you a fixed rate. Your bill goes up every year — and in California it's been climbing 6–9% annually for the last decade. There's no ceiling. No notice. Just a higher number on next month's bill, forever.

A prepaid (or financed) solar system flips that completely. Your payment is fixed for the life of the system. Whatever you agreed to in year one is what you'll pay in year fifteen — even as your neighbors' utility bills double.

Look at it this way: every month you keep paying the utility, you're effectively making a monthly donation to a rate-increase engine you have zero control over. A fixed solar payment redirects that money into your own home — into something that builds equity, has a defined end, and eventually transfers to ownership.

What about year 6 and selling the home?

One of the most common concerns we hear: what happens if I sell the house?

With a prepaid lease, the system doesn't place a lien on your property. The lease provider owns the equipment, not a claim on your home. There's nothing to "clear" at closing the way a HELOC or refinance might require.

You can sell the home at any time, and a sale does not require or trigger a buyout. You do not need to "own" the system in order to sell. The lease simply transfers to the new buyer — they inherit your locked-in solar rate, the remaining warranties, and the same year-6 ownership option you would have had. It's functionally the same as transferring an electric bill.

The year-6 ownership option is built into the contract as a separate path, available only if you want it. After the sixth anniversary of installation, you can choose to take ownership of the system outright. The purchase price is calculated using the system's fair market value, offset by any remaining obligations — and in many cases, the result is a very low or even zero incremental cost. When ownership transfers, the installer's workmanship warranties transfer along with it.

The key point: ownership is optional. Selling the home is always available, without buyout, without underwriting on the new buyer, without complications.

Who this is for

Prepaid leases aren't the right fit for everyone. They tend to work best for homeowners who:

• Want solar in 2026 without waiting for federal policy to shift again
• Are open to a structured financial product over a straight purchase
• Want a fixed monthly payment instead of an open-ended utility bill
• Want the lower upfront cost without the tax-credit timing risk

If you'd rather just buy the system outright, that's still an option — it just costs more now without the individual credit. We'll walk you through the math and let the numbers decide.

The honest take

The expired tax credit is one of the most-missed pieces of context in solar conversations right now. We get questions every week from homeowners who think solar got 30% more expensive overnight. It didn't — for most people, the prepaid lease structure recovers most of that delta, and with financing as low as 4.99% APR and zero upfront cost, the path in is more accessible than most homeowners realize.

The trick is knowing the option exists, and working with someone who can structure it correctly. That's where a broker matters: we shop multiple prepaid lease providers and financing partners to find the right combination for your home, your usage, and your timeline.