Thinking about solar, but not sure a traditional loan, lease, or PPA is right for you? A prepaid Energy Services Agreement (ESA) paired with a Concert Finance loan offers a different path. You start with low, predictable payments and end up owning your solar system within roughly 5 years time.
Through this “Transitional Ownership” program, a commercial partner owns the system at first and claims the associated federal solar tax credits & incentives available to commercial entities. The savings from those credits are then passed on to the homeowner through a lower overall system cost & reduced monthly payments. After five years, once the tax credit recapture window closes, ownership of the system is then transferred to the homeowner.
We’ve always opposed traditional solar leases and PPAs, and that hasn’t changed. Energy Services Agreements are fundamentally different, offering a path to solar ownership that is homeowner-friendly, accessible, and affordable.
What is a Prepaid Energy Services Agreement (ESA)?
Historically, there have been 4 ways to pay for solar: cash, a traditional loan, a solar lease, or a Power Purchase Agreement (PPA).
A prepaid Energy Services Agreement (ESA) is a lease-to-own option that falls somewhere between a loan and a lease. There are some major differences, however:
- With a traditional solar lease or PPA, a third party owns the solar system for 20-25 years. At the end of that term the homeowner can either purchase the panels at fair market value, renew their lease, or have the panels removed.
- With a prepaid ESA, a third party owns the system for the first phase (approx. 5 years). After that period, ownership transfers to the homeowner directly. The low, monthly payment for the system remains consistent throughout.
Since the residential solar tax credit ended in 2025, homeowners can no longer claim the 30% credit. Prepaid ESAs use federal commercial solar tax credit and incentives instead, allowing you to benefit indirectly.
How a Prepaid ESA Works
- You sign an Energy Services Agreement and a fixed‑payment loan.
The loan covers the upfront value of your solar installation, already reduced by built-in tax credits and other solar incentives, so you are financing a discounted amount. - A third party owns and maintains the system during the first phase.
For roughly 5 years, a qualified third-party owner owns the system and claims the available commercial tax incentives. During this time, they are also responsible for monitoring & maintenance. - Your system produces power and lowers your electric bills.
From day one, the solar panels on your roof generate electricity that reduces what you buy from the utility, just as if you owned the system outright. You pay your lowered electric bill alongside your fixed monthly loan payment, which is designed to be competitive with or even below what you were paying before solar. - Ownership transfers to you after the initial term.
Once the required tax credit recapture period passes, ownership transfers from the third‑party owner to you (made possible by an early-buyout provision baked into your original loan amount). There is no large balloon payment at this time, you simply continue to pay the fixed loan amount you’ve paid from the start.
Why Consider a Prepaid ESA Now?
Energy Services Agreements qualify for federal commercial solar incentives, allowing homeowners to indirectly take advantage of the federal solar tax credit, which expired for personal use at the end of 2025. This gives you a discounted, financed path to solar that still leads to ownership, without needing any tax liability yourself or waiting for tax season to see savings.
Of note: Cape Cod and parts of the South Shore are classified as “energy communities” under current federal rules, which can unlock additional bonus credits on top of the base commercial Investment Tax Credit. This means that the total incentive value that flows into your discounted system cost can reach or even exceed 30%, depending on project details and program eligibility.
How A Prepaid ESA Differs from a PPA or Solar Lease
| Feature | Energy Services Agreement | Traditional Solar Lease | Traditional Power Purchase Agreement |
| Upfront Cost | Low to zero-down; cost reduced by commercial incentives & any applicable bonus credits | Low to zero-down | Low to zero-down |
| Monthly Payments | Fixed low payment, no built-in escalations | Fixed lease payment, may increase annually | Pay per kWh, rate may increase annually |
| Contract/Term | Short-term initial ESA phase, usually around 5 years, followed by 20-25 year loan term | Long-term, typically 20-25 years | Long-term, typically 20-25 years |
| Incentives & Tax Credits | Third-party claims commercial credits and uses them to lower your system cost | Third-party keeps all or most of the incentive value | Third-party keeps all or most of the incentive value |
| Long-term Outcome | Ends with full ownership and ongoing savings | Usually ends with no ownership and ongoing payments | Transfer terms vary and can complicate the sale of a home |
For homeowners who want to own solar but aren’t ready to pay for a system in full or get a traditional solar loan, a prepaid ESA is the best way to keep upfront costs low without being locked into a 20-25 year lease term where equipment ownership is unlikely or impossible.
Get a Long-Term Solar Partner with My Generation Energy
Regardless of how you pay for solar, choosing the right installer is just as important as choosing the right financing.
My Generation Energy has been designing, installing, and servicing solar systems across Cape Cod and the South Shore since 2008, with a focus on long‑term performance and clear, honest guidance. When you work with our team, you can expect:
- A custom system design based on your roof, shading, energy usage, electric rates, and long‑term goals
- Straightforward comparisons of cash, loan, and ESA options so you can see how each choice affects your budget and savings
- High‑quality equipment and careful workmanship
- An experienced local team that will be here to support you for years to come
If you are curious whether a prepaid ESA is a good fit for your home, the next step is simple: request a free, no‑obligation solar quote today.
