TPO stands for Third Party Ownership and its the best mechanism to capture tax credits on residential installations. The residential tax credit expired at the end of 2025. The commercial tax credit is still available. A residential system can be commercialized per IRS requirements through TPO. TPO allows for capturing of the 30% commercial tax credit and depreciation. Additional tax credits can also be claimed: If the property is in a DOE defined energy community it qualifies for an additional 10%, If equipment used in the installation has a significant amount of content from the US, it can qualify for an additional 10% domestic content adder. The TPO party can then share these benefits to the homeowner via a discount on the overall cost of the solar & battery system that can range from 15 – 35% depending on the provider, equipment used, and location. You also get this discount up front instead of waiting to file your taxes as was required with the residential tax credit.

Most TPO providers will own the system for 5 to 6 years so that the tax credits can be captured. During this period, the homeowner receives the power generated by their solar and battery system. After this period, ownership reverts back to the homeowner with the balance of warranties. Depending on how the TPO provider has structured the agreement, the homeowner may or may not owe additional funds at the end of the 5-6 year period. These are also generally known as pre-paid leases.

Pre-paid leases are much better options than monthly leases as pre-paid leases make ownership transfer easy if selling your home and there are no annual escalators in payments. A standard lease is generally a 20 year commitment, which can be very costly to exit early, even when selling your home.

We have several great pre-paid leases that we can quote for you. We also have financing options with fixed monthly payments and no prepayment penalties.