Prepaid TPO Explained: The Financing Option That Took Over 2026

If you sold solar in 2024, "financing" meant two things: a loan, or a lease/PPA. In 2026 there's a third option in a lot of proposals, and on at least one major sales platform it's now the most common.

According to Artemis's The Signal: Q3 2026, based on installers using the Artemis platform, Prepaid TPO went from 10.2% of signed solar and battery deals in Q4 2025 to 40.7% in Q3 2026. That's four straight quarters of growth (10.2%, 20.4%, 28.1%, 40.7%), and it put Prepaid ahead of classic TPO (leases and PPAs) at 37.6%.

Artemis is careful to say its data "may not represent the full market." But a share that quadruples in a year is a signal worth understanding, even if your own mix looks different.

What Prepaid TPO is

Artemis defines it simply: third-party ownership paid up front by a prepaid financier. In practice it works like this:

• A third party owns the system for an initial term, the same as a lease or PPA. That owner handles monitoring and maintenance during the term.
• The contract is paid once, up front, instead of month by month. The homeowner can pay cash or finance the prepayment with a separate solar loan.
• Ownership usually transfers later. Industry guides from EnergySage and Solar Power World describe a buyout or transfer at around year five or six.

Here's how it compares:

	Loan	Classic TPO (lease/PPA)	Prepaid TPO
Who owns the system	Homeowner	Third party	Third party, then usually the homeowner
How it's paid	Monthly loan payments	Monthly lease or per-kWh payments	One up-front payment (cash or separate loan)
Federal credit	None for the homeowner since 2025	Owner claims the business credit	Owner claims the business credit
Maintenance during term	Homeowner	Provider	Provider

Why it grew (the honest version)

Artemis doesn't explain the shift. It lists "Will Prepaid keep climbing, and is the monthly payment why?" as an open question for next quarter.

The explanation most of the industry gives is the tax code. The homeowner credit, Section 25D, ended for systems installed after December 31, 2025. The business credit, Section 48E, still applies to third-party-owned systems. A prepaid lease gives the homeowner who would have paid cash a way to still benefit from that credit indirectly: the provider claims it and passes part of the value through in the up-front price. We covered the credit side in more detail in TPO Is the New Default.

That's a reasonable read, and it lines up with what Artemis shows about batteries (more on that below). It's still an inference from the tax rules, not something the Artemis data proves.

This is market context, not tax advice.

Where Prepaid shows up most

The Artemis report has one more number that changes how you should pitch it. Prepaid isn't spread evenly across deal types. In Q3:

• 92.7% of battery-only deals were Prepaid TPO
• 60.5% of solar+battery deals were Prepaid TPO
• Solar-only deals still leaned classic TPO: 64.7% classic, 5.3% Prepaid

So "Prepaid took over" is really "Prepaid took over battery deals." If your reps sell mostly solar-only, their financing conversation may look a lot like last year's. If they sell storage, Prepaid is likely the default.

How to explain it at the kitchen table

Homeowners don't need the tax code. They need three sentences:

1. "A company owns the system for the first few years and handles the maintenance."
2. "You pay for it once, up front, at a lower price than buying it outright, because the owner can use a tax credit you can't."
3. "After the initial term, there's a path for you to own it. Here's exactly what the contract says about that."

The third sentence is where reps get into trouble. EnergySage notes that many contracts set the transfer at fair market value rather than $0, and that some installer warranties end around the transfer. Don't promise a free handover the contract doesn't promise. Show the homeowner the buyout language.

What this means for your org

Two practical questions for any dealer owner:

• Do your reps have a competitive Prepaid product to offer? If a battery customer is choosing Prepaid nine times out of ten on Artemis, an org without one is pitching the less-chosen option.
• Can every rep explain it in under a minute? A financing option the rep can't explain becomes "let me check with the office," and that's a lost same-day close.

GRID gives dealers a vetted installer network and a full operating platform at $0, with GRID paid on the install side only when deals fund. If financing options are a gap in your current setup, that's worth a 20-minute conversation.

Book the call →

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Sources: Artemis, The Signal: Q3 2026 (pp. 7, 19, 32, 33, 46), based on Artemis platform data from Q4'25 to Q3'26 for installers using the Artemis platform; it may not represent the full market. EnergySage; Solar Power World. This is market context, not tax or legal advice. GRID is a dealer operating platform and does not sell solar to homeowners.