A homeowner in Northern California believes they may have stumbled on a savings opportunity on solar power systems, even after missing the federal tax credit.

The scoop

In a prepaid solar lease, the third party that provides the solar panels claims the federal credit rather than the homeowner. Lessees think this arrangement allows them to indirectly enjoy savings — via a discounted upfront cost — even if they've missed the tax credit window.

"From what I understand, there may still be a workaround by using a prepaid solar lease," the Redditor wrote, sharing a screenshot of a provider's quote and payment terms.

Panel users must make a one-time, rather than monthly, upfront payment to cover solar generation for a fixed timeframe. According to the Department of Energy, third-party operators wait for six years to avoid credit recapture before offering homeowners the option to buy. 

How it's helping

Opting for a prepaid solar lease has several advantages, such as protection from rising electricity rates. Since the amount you pay lasts for the duration of the agreement (usually 15 to 25 years), you'll avoid fluctuating costs.

Various financing models are available — including $0 down payment — which is offered by some companies, such as Palmetto. These providers also handle monitoring, maintenance, and repairs or replacements. Tools like EnergySage can help you compare installers and select the best offers, helping you save up to $10,000.

Installing solar panels provides homeowners with energy independence when outages occur and helps cut costs. It also promotes more affordable energy and reduces pollution. 

Even in cloudy winter conditions or off-grid settings, solar can meet electricity needs. Its widespread adoption will lower the cost of equipment and related devices.

Prepaid solar leases show how homeowners can use creative workarounds to access solar. One Virginia homeowner also found a clever solution to navigate HOA restrictions — installing Timberline solar shingles.

Smart upgrades that slash monthly energy bills

You can use these tools to discover solar options that suit your home and lifestyle:

What's the most you'd pay per month to put solar panels on your roof if there was no down payment? $200 or more 💰 $100 💸 $30 💵 I'd only do it if someone else paid for it 😎 Click your choice to see results and speak your mind.

• EnergySage can help you save up to $10,000 on installations by curating competitive bids from local installers

• Not ready to spend up front? Palmetto's $0-down LightReach solar leasing program can lower your utility rate by up to 20%

• TCD's Solar Explorer makes it easy to access exclusive offers from preferred partners

You could save even more by connecting your solar energy to cooling and heating systems, which consume a bulk of your electricity supply. 

Storing excess power with a home battery system can also shave off your bills while making your home more resilient. Mitsubishi Electric offers budget-friendly home HVAC options.

Meanwhile, the Palmetto app allows you to redeem points worth up to $5,000, which you can use for further energy upgrades. 

What everyone's saying

Comments were either hopeful about the workaround or more cautious, encouraging the OP to consider other aspects of their lease deal.

"This is the most cost-effective way to go solar right now," one person wrote.

Another commenter said their installer has offered a 30% discount and a $1 purchase price to acquire the system after five years.

However, a community member cautioned that such a deal can raise tax questions: "Be on the lookout for that $1 instead of 'fair market value,' because the IRS could take notice as intent to purchase (which could invalidate the lease discount)."

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