California homeowners are facing some of the highest electricity rates in the country, and those costs continue to rise faster than inflation. At the same time, recent changes like NEM 3.0 and the scheduled elimination of the consumer solar tax credit after 2025 have made the path to solar savings more complicated.
For many families, the question is no longer simply, “Should I go solar?”
The bigger question is:
What is the smartest way to go solar without taking on high monthly payments?
Traditionally, homeowners who did not want to purchase a solar system outright had two main options: a solar lease or a Power Purchase Agreement, also known as a PPA. But a newer model is now gaining attention in California: the Prepaid Solar PPA, including options such as the HDM Renewable Finance model.
This type of program may give homeowners a way to access solar savings, reduce long-term utility exposure, and reduce their monthly payments from 30-50% when compared to their current utility bill.
How an HDM Prepaid PPA Works
The HDM Prepaid Solar PPA model is designed to combine several benefits of ownership with the simplicity of a managed solar contract.
Although the Federal Investment Tax Credit is no longer available to homeowners, it IS still available to companies through a commercial tax credit. These companies will purchase the system, receive the 30% tax credit and then offer financing to the homeowner that passes along the tax credit in the form of monthly payments that are 30-50% less than what they currently pay their utility company.
HDM Prepaid PPA: Step by Step
- The homeowner receives a prepaid solar offer, often around 70% of the cost of purchasing a comparable system.
- The homeowner pays the prepaid amount upfront or finances it.
- The prepaid PPA provider owns the system during the contract period.
- The homeowner receives solar energy with either $0 ongoing monthly solar payments if paid entirely upfront, or with a financed monthly payment that averages between 30-50% off what they currently pay their utility company for the same energy.
- Maintenance is typically included during the provider ownership period.
- After a set period, often around six years, the homeowner may have the option to take ownership of the system.
Why Prepaid Solar May Make Sense in California
California is one of the strongest markets for prepaid solar because utility rates are high and future increases remain a major concern for homeowners.
1. Protection From Rising Utility Rates
A prepaid PPA can act as a hedge against future utility rate increases. Instead of being exposed to unpredictable utility bills, the homeowner either prepays for solar energy to eliminate ongoing solar payments or finances the system at a fixed rate that never increases.
2. Better Savings Strategy Under NEM 3.0
NEM 3.0 reduced the value of excess solar energy exported back to the grid. Because of this, many California homeowners benefit more when their system is designed to offset usage directly and, when appropriate, includes battery storage.
A prepaid PPA can help reduce dependence on export credits and focus instead on long-term bill reduction.
3. Access to Solar Savings Without the Homeowner Tax Credit
If the consumer solar tax credit is no longer available, a prepaid PPA may still allow homeowners to benefit indirectly from commercial tax incentives used by the provider.
That can create a lower effective system cost compared to purchasing solar without a tax credit.
Who Should Consider an HDM Prepaid PPA?
A prepaid solar PPA may be a good fit for homeowners who:
- Want $0 monthly solar payments if paid in cash or greatly reduced monthly payments if financed.
- Plan to stay in their home for at least six years.
- Want stronger long-term savings potential.
- Prefer included maintenance during the provider ownership period.
- Want to reduce exposure to rising California utility rates.
- Are interested in eventually owning the system.
The Bottom Line
A prepaid solar PPA, such as the HDM model, may offer a smarter path for homeowners who want long-term savings including maintenance, and substantial monthly savings.
The biggest advantage is certainty. In a state where utility rates continue to rise, locking in solar value upfront can help homeowners protect their budget and increase long-term savings potential.