What Is a Prepaid Solar Lease? A New Way to Go Solar in Arizona

For years, Arizona homeowners considering solar have generally had three choices: purchase a system with cash, finance it with a solar loan, or enter into a traditional solar lease or power purchase agreement with monthly payments.

There is now another option worth considering: a prepaid solar lease.

Desert Solar Energy is offering homeowners access to the Participate Energy Prepaid Lease, an innovative solar financing option designed to provide many of the advantages people associate with purchasing solar while significantly reducing the upfront cost compared with buying an equivalent system outright.

What Is a Prepaid Solar Lease?

A prepaid solar lease is exactly what the name suggests: instead of making monthly lease payments for the next 20 or 25 years, the homeowner pays the lease upfront.

The solar system is installed on the home under a long-term lease, but there are no additional recurring lease payments during the lease term. If the homeowner chooses to finance the initial prepayment through a third-party lender, they would, of course, have payments associated with that separate financing.

Participate Energy's prepaid lease has an initial 25-year term. Participate structures the program to account for available solar incentives, allowing the upfront prepaid lease amount to be substantially lower than the equivalent cash purchase price of the same system.

That creates an interesting alternative for homeowners who like the economics of purchasing solar but don't necessarily want to pay the full cash price of owning the system.

Why Is the Prepaid Lease Especially Relevant Now?

The solar financing landscape changed significantly at the end of 2025.

The federal residential solar tax credit that homeowners previously used when purchasing qualifying solar and battery systems expired at the end of 2025. Historically, that credit could offset 30% of the qualifying cost of a homeowner-owned system.

That changes the economics of purchasing residential solar.

Participate Energy's Prepaid Lease is designed differently. Instead of requiring the homeowner to purchase the system and personally claim the residential tax credit, the lease structure allows available incentives associated with the project to be incorporated into the economics of the lease.

The result can be a significantly lower prepaid lease price compared with purchasing the same solar system for cash.

What Are the Benefits of a Participate Energy Prepaid Solar Lease?

1. Lower Upfront Cost Than an Equivalent Cash Purchase

This is potentially the biggest advantage.

Participate Energy states that its prepaid lease can provide an upfront lease price significantly below the equivalent cash price of the same solar system.

That allows homeowners to obtain the benefits of generating solar electricity without necessarily paying the full purchase price of the equipment.

2. No Monthly Solar Lease Payment

Traditional solar leases typically require a homeowner to make monthly payments over many years.

With a prepaid lease, the lease obligation is paid upfront.

That means there are no additional recurring lease payments throughout the 25-year term, unless the homeowner separately chooses to finance the initial prepayment.

For homeowners who have the cash available, this can create a very simple arrangement: make one payment upfront and allow the solar system to produce electricity for the home for years to come.

3. No FICO Score or Credit Underwriting Required

Another unusual feature of Participate Energy's program is that no FICO score or traditional credit underwriting is required to participate.

That's an important distinction from many solar loans.

Traditional financing usually depends heavily on credit score, debt-to-income ratios and other lending requirements. With the Participate Prepaid Lease, homeowners don't have to qualify for the lease based on a FICO score.

If you choose to obtain a separate loan to finance the prepaid amount, however, that lender may have its own credit requirements.

4. No Property Lien Through the Lease

According to Participate Energy, its Customer Participation Agreement does not require a UCC lien on the home.

For homeowners concerned about encumbrances associated with solar financing, that can be an attractive feature of the program.

5. The Lease Can Transfer When You Sell Your Home

One of the biggest questions homeowners have about any solar lease is:

"What happens if I sell my house?"

Participate designed the prepaid lease to be transferable.

If the homeowner sells the property, the new homeowner can take over the agreement without a credit check or additional underwriting. A transfer notice is required as part of the process.

Because the lease has already been prepaid, the new homeowner isn't being asked to assume years of monthly solar lease payments.

That can make the conversation considerably simpler when selling a solar-equipped home.

6. An Option to Purchase the System Later

A prepaid lease doesn't necessarily mean the system must remain leased forever.

Participate Energy's initial lease term is 25 years, but homeowners have an option to purchase the system at fair market value after the initial six-year period.

This creates a potential path from leasing to ownership.

A homeowner could take advantage of the economics of the prepaid lease today and later decide whether purchasing the system makes sense for them.

7. Solar, Solar + Battery, and Battery-Only Options

The Participate program isn't limited to solar panels.

Eligible homeowners can use the program for solar, solar plus battery storage, or qualifying battery-only projects.

For Arizona homeowners, combining solar with battery storage can be particularly attractive.

Solar panels generate electricity during daylight hours, while a battery can store excess energy for use later. Depending on the system configuration and equipment selected, batteries can also provide backup power when the utility grid goes down.

Prepaid Lease vs. Buying Solar With Cash

The easiest way to understand the program is to compare the two approaches.

With a cash purchase, you pay the full purchase price of the solar system and own the equipment.

With a Participate prepaid lease, you make a reduced upfront lease payment, Participate retains ownership during the lease, and you receive the use and energy benefits of the system without ongoing lease payments.

There are advantages to both approaches.

Some homeowners simply prefer owning their solar equipment from day one. Others may find that reducing the initial amount of money required to install solar is more valuable.

The right choice depends on the homeowner's financial goals, how long they expect to own the property, their electricity consumption and the specific economics of their proposed solar system.

Is a Prepaid Solar Lease Right for You?

A prepaid lease can be particularly interesting for homeowners who:

• Want to reduce the amount of electricity they purchase from their utility.
• Have considered purchasing solar with cash but want a lower upfront cost.
• Don't want a traditional monthly solar lease payment.
• Don't want their ability to qualify determined by a FICO score.
• Want an agreement designed to transfer when the home is sold.
• Like having the option to purchase the solar system later.
• Are considering solar combined with battery storage.

It won't necessarily be the best option for every homeowner, which is why comparing the numbers matters.

See How a Prepaid Solar Lease Compares for Your Home

At Desert Solar Energy, we believe homeowners should understand exactly what they're getting before signing a solar agreement.

We'll look at your actual electricity usage, available roof space, solar production potential and energy goals to design an appropriately sized system for your home. We can then show you how the Participate Energy Prepaid Lease compares with other available ways to go solar.

The goal isn't simply to put solar panels on your roof. It's to determine which combination of equipment and financing makes the most sense for your home and your long-term electricity costs.

If you're considering solar in Tucson or Southern Arizona, contact Desert Solar Energy for a personalized solar evaluation and ask us about the Participate Energy Prepaid Lease.

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