When installing residential solar in Massachusetts, how you pay for your system matters just as much as your panels. Homeowners across Cape Cod, the South Coast, and Greater Boston have several ways to finance solar, including solar loans, solar leases, Power Purchase Agreements (PPAs), and prepaid Energy Service Agreements (ESAs).
This guide breaks down the pros and cons of solar loans, solar leases, PPAs, and ESAs, how they work, and how My Generation Energy has helped local homeowners choose the option that best fits their situation.
| Feature | Prepaid ESA | Solar Loans | Solar Lease | Traditional PPA |
| Ownership | “Transitional ownership” (third-party, then homeowner) | Homeowner | Third-party company | Third-party company |
| Upfront Cost | Low-to-zero down | Low-to-zero down | Low-to-zero down | Low-to-zero down |
| Monthly Payments | Fixed payment | Fixed loan payment | Fixed payment (that often increases annually) | Pay per kWh of solar (rate may increase) |
| Incentives | Third‑party claims commercial credits & uses them to lower your cost | Used to lower system cost | Third-party keeps incentive value | Third-party keeps incentive value |
| Contract Length | 5 year ESA phase, 15-20 year loan phase | Typically 10-20 years | Typically 20-25 years | Typically 20-25 years |
| End of Term | Full ownership | Full ownership | Typically no ownership | Typically no ownership |
Solar Loans
A solar loan is a financing option that lets you install solar now and pay for your system over time, while still owning the equipment. You make monthly loan payments, and your system’s energy production reduces what you pay your utility, often keeping your combined solar and electric costs at or below what you were paying before solar.
My Generation Energy often works with local institutions like Cape Cod 5 or UMassFive Credit Union for solar loans.
Pros of solar loans:
- Long‑term ownership and control over your system
- Access to incentives and full value of your solar production
- Often lower lifetime cost than a lease or PPA, especially with competitive rates from local banks and credit unions
Cons of solar loans:
- You’re responsible for qualifying and managing the loan
- Interest costs depend on your credit and lender terms, and high fees or rates can reduce savings
Energy Service Agreements (ESAs)
A prepaid Energy Service Agreement (ESA), sometimes referred to as a “prepaid PPA,” is a lease‑to‑own option that sits between a traditional solar loan and a lease. A commercial partner owns the system at first, uses federal commercial solar incentives to reduce your overall system cost, and then transfers ownership to you after an initial phase that typically lasts around five years.
For homeowners who want to own solar but aren’t ready for a traditional loan or full cash purchase, My Generation Energy sees prepaid ESAs as a better alternative to traditional leases or PPAs.
Pros of solar loans:
- Leads to full ownership and ongoing savings
- Lets homeowners indirectly benefit from commercial solar incentives, even though the residential tax credit has expired
- Keeps upfront costs low while still aligning with an ownership‑focused, homeowner‑friendly approach
Cons of solar loans:
- Structure is more complex than a straightforward loan, so it’s important to understand the agreement terms
- Still involves a third‑party owner during the first phase, which means you’ll want a trusted installer and financing partner
Solar Leases
With a traditional solar lease, a third‑party company installs and owns the solar panels on your roof, and you pay a fixed monthly lease payment to use the system’s energy. The payment often increases annually and at the end of the lease term you may have the option to buy the system, renew the lease, or have the panels removed.
Because of these drawbacks, My Generation Energy has long opposed traditional solar leases. We prefer options that lead to homeowner ownership and control.
Pros of solar leases:
- Lower upfront cost compared to paying cash
- Simple monthly payment structure
- Solar maintenance is often handled by the leasing company
Cons of solar leases:
- You do not own the panels, which limits your access to incentives and reduces lifetime savings
- Lease terms can complicate home sales and transfers if you move
- Monthly lease payments can be higher than solar loan payments over the same term
Traditional Power Purchase Agreements (PPAs)
A Power Purchase Agreement is another third‑party ownership model. Instead of paying a fixed lease payment, you agree to buy the electricity the system produces at a set rate per kilowatt‑hour. The PPA provider owns the equipment and sells you power, often at a starting rate below your utility’s price, with escalators over time.
For homeowners who want long‑term savings and flexibility, My Generation Energy generally recommends avoiding traditional PPAs in favor of ownership‑focused options like cash, loans, or a prepaid ESA.
Pros of PPAs:
- Minimal upfront cost
- Can lower bills early on if the PPA rate is below your utility rate
- Maintenance responsibility typically falls to the PPA provider
Cons of PPAs:
- No ownership, limited control, and less incentive value for the homeowner
- Escalating rates can erode savings over time
- Long terms and transfer requirements can complicate selling your home
My Generation Energy: Your Local Solar Financing Experts
Regardless of how you pay for solar, the installer you choose has a major impact on your long‑term experience, performance, and savings. My Generation Energy has been designing, installing, and servicing high‑performance solar energy systems since 2008. We focus on options that keep homeowners in control and deliver strong long‑term value.
When you work with our team, you can expect:
- Custom system designs based on your roof, shading, electric rates, and goals
- Clear comparisons of solar financing options so you can see how each choice affects your budget and savings
- High‑quality equipment and workmanship from a trusted local company that will be here to support you for years to come
