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Propel Energy Services Agreement — 31 Questions, Answered
The full FAQ on Propel's ESA for Massachusetts homeowners — what you own, what the third-party owner owns, how §48E flows into your payment, and exactly how the path to ownership works at year 7, year 10, and end of term.
ESA · not a lease, not a PPA Section 48E pass-through Pre-set buyout schedule
By the NuWatt Engineering Team·Updated Apr 2026·18 min read
TL;DR
What is a Propel Energy Services Agreement (ESA)?
A Propel Energy Services Agreement is a service contract under which a third-party owner installs, owns, and operates the rooftop solar system on a Massachusetts home, while the homeowner pays a structured fixed monthly fee that bundles debt service, operations, maintenance, monitoring, and a performance commitment. Unlike a traditional 20-year solar lease or PPA, the ESA includes a defined ownership-transfer pathway with a pre-set buyout schedule — typically opening around year 5 to 7 once the Section 48E commercial ITC recapture window closes. Final MA pricing, escalator language, and buyout dollar values will be confirmed at program launch (April 2026 or later).
Five questions that define what an Energy Services Agreement actually is — and how it differs from a lease, a PPA, or a loan.
What does Propel actually own — and what do I own?
During the third-party ownership window of the Propel Energy Services Agreement, the third-party owner holds title to the panels, racking, inverter, optimizers, and (if bundled) the battery. You own the roof, the structural attachment points, your home's electrical service, and the energy you consume on-site. You also hold the operational role: keeping the array unobstructed, allowing service access, and continuing to occupy or rent the home. At the defined transfer milestone, full equipment ownership moves to you. This is the program design intent as of Apr 2026; final asset definitions are confirmed in your specific ESA at signing.
Is Propel a lease, a loan, or something else?
Propel is structured as an Energy Services Agreement, not a traditional lease, PPA, or consumer loan. A lease pays for use of equipment for a fixed term with no automatic ownership. A PPA pays for kWh produced. A loan is a debt instrument secured by the equipment you own from day one. An ESA combines a service contract — covering installation, monitoring, operations, maintenance, and (where applicable) performance — with a defined ownership-transfer pathway. The legal form is ESA; the economic outcome is closer to a loan with a tax-credit pass-through built in.
What does the monthly payment cover?
Your Propel ESA monthly fee is a single bundled charge that covers the third-party owner's debt service on the system, ongoing operations and maintenance during the TPO window, system monitoring, the performance commitment, and an allocation toward the eventual ownership transfer. You do not receive separate bills for inverter service, panel cleaning, monitoring software, or warranty registration during the term. Your utility bill, by contrast, is unchanged in structure — Eversource, National Grid, Unitil, or your MLD still bills delivery and any residual supply separately. Final fee components are itemized in your ESA at signing.
How long is the term?
The Propel ESA is designed around two distinct windows. The third-party ownership phase typically runs the years required to capture and recapture-protect the Section 48E commercial ITC — generally five to seven years. After that, an ownership-transfer mechanism takes effect. The total economic horizon (ESA window plus your ownership tail) is usually framed against a 25-year system life. Exact term length and the buyout calendar will be defined in the MA program launch documentation; the Apr 2026 design intent is a 5-to-7 year TPO window followed by homeowner ownership for the remainder of the equipment warranty.
What happens at the end of the term?
At the end of the Propel ESA, ownership of the system transfers to you under a pre-defined pathway — not an open-market negotiation. Depending on the option you elect at signing, this can occur at an early buyout milestone (around year 5 to 7), at a mid-term window, or at full term end. After transfer, every kWh produced is yours to consume or export, the SMART 3.0 tariff stream is yours (subject to MA SMART transfer rules), and you assume responsibility for any remaining O&M outside warranty. There is no balloon payment or unrelated true-up at term end; the buyout amount is set up front.
Section 2
Money Mechanics
Six questions on the federal §48E tax-credit pass-through, the MA $1,000 state credit, SMART 3.0 cash flows, escalators, and prepayment.
Who claims the §48E federal tax credit under Propel?
Under Propel, the third-party owner claims the Section 48E commercial Investment Tax Credit, not the homeowner. Section 48E is not a single hard cliff: projects that began construction on or before July 4, 2026 locked in the full credit timing, and projects that start later still qualify if they are placed in service by December 31, 2027. Because Section 25D (the residential ITC) expired December 31, 2025, this commercial-side credit is the only federal solar tax benefit available to most MA homeowners in 2026 — and it can only be captured through a third-party ownership structure. The credit's economic value is then passed through to you as a lower monthly ESA payment than a self-financed loan would allow at current commercial-debt rates.
Why does that pass-through matter for my monthly payment?
Because the third-party owner reduces its capital cost using the Section 48E credit (and any domestic-content bonus the project qualifies for), the underlying economics of the system are subsidized at the asset level. That subsidy flows into your ESA pricing — the monthly fee you are quoted reflects an installed cost net of the federal credit, even though you never claim it on your own return. This is the same mechanism that powered residential solar leases for the prior decade; Propel applies it to an ownership-bound ESA. The exact pass-through ratio for MA will be confirmed at program launch.
Can I still claim the MA state $1,000 personal income solar tax credit?
No, not during the Propel ESA. The Massachusetts personal income solar tax credit (15% of net solar expenditure, capped at $1,000) requires the homeowner to be the system owner of record. During the TPO window of the Propel ESA, the third-party owner holds title, so the state credit is not available to you. After ownership transfer, the state credit is generally tied to the original year of installation, so a later transfer typically does not re-open eligibility. Cash and traditional-loan buyers retain access to this credit; Propel customers trade it for the larger §48E pass-through built into their payment.
Who gets the SMART 3.0 base and AOBC payments?
During the Propel ESA window, the SMART 3.0 base compensation and any Alternative On-Bill Credit (AOBC) payments are typically directed to the system owner of record — the third-party owner. Those cash flows are factored into your monthly fee, which is how Propel keeps the payment competitive without the residential ITC. After ownership transfer, eligibility to receive remaining SMART 3.0 stream payments depends on the MA DOER's transfer rules in effect at that time. NuWatt will publish the exact MA Propel-plus-SMART transfer mechanics at program launch; this is the program design intent as of Apr 2026.
What's the price escalator on Propel — fixed or variable?
Propel is designed to use a fixed monthly payment with no annual escalator during the ESA window — the opposite of the 2-2.9% per-year escalators typical of legacy MA solar leases and PPAs. That fixed structure is one of the primary reasons NuWatt structured Propel as an ESA rather than a conventional lease: long-term escalators compound brutally over a 20-year horizon, and homeowners consistently underestimate the impact at year 15. Final escalator language (including any inflation-tied rider, if applicable) will be defined in the MA program launch documentation. Confirm against your specific ESA at signing.
Can I prepay or buy down the ESA?
Yes. Propel is designed to allow prepayment without a prepayment penalty, mirroring the structure used in NuWatt's live Maine and Texas Propel markets today. There are typically two prepayment paths: a partial buy-down at signing that lowers the recurring monthly fee, and a full early buyout that ends the ESA and transfers ownership ahead of schedule (subject to the §48E recapture window). If you anticipate selling your home, refinancing, or coming into liquidity within the ESA window, flag that during your design call so the buyout schedule can be selected accordingly. Final prepayment terms are confirmed at signing.
Section 3
Path to Ownership
Five questions on the buyout schedule, ownership-transfer mechanics, warranty handoff, and post-transfer permits — the differentiator vs. a 20-year lease.
When can I take ownership of the system under Propel?
Propel is designed with multiple ownership-transfer windows, not a single end-of-lease handoff. The earliest standard buyout sits just outside the Section 48E recapture window — typically around year 5 to 7 — to preserve the third-party owner's tax position. Additional buyout windows are usually offered around the mid-term and at full term end, giving you flexibility to align ownership transfer with a refinance, a home sale, or a planned cash event. The exact MA buyout calendar will be defined at program launch; the design intent as of Apr 2026 is a year-5-to-7 first window followed by additional pre-set milestones.
What's the buyout structure at year 7? Year 10? End of term?
Propel uses a pre-set buyout schedule, not a market-rate negotiation. Each buyout milestone has a defined dollar amount or formula written into your ESA at signing — so you know on day one what year 7, year 10, and end-of-term ownership transfer will cost. Generally, the buyout amount declines over time as the underlying tax-equity and debt positions are paid down. NuWatt has not finalized the exact MA buyout dollar values; those are confirmed at program launch and lock in for your specific contract at signing. We will not publish placeholder dollar values that could mislead a homeowner before contract review.
Is the buyout at fair market value or pre-determined?
Propel is structured around pre-determined buyout amounts, not fair market value (FMV) appraisals. This is one of the most important differences from a traditional 20-year solar lease, where end-of-term buyout is often FMV — a number you do not know until year 20 and that has caused real homeowner-vs-lessor disputes industry-wide. Under Propel, every buyout window in your ESA has a defined dollar figure or formula written into the contract on day one. Final MA buyout values are confirmed at signing; NuWatt will not quote them publicly before program launch.
What happens to performance and warranty after ownership transfer?
After ownership transfer, the manufacturer warranties on the panels, inverter, optimizers, and (if applicable) battery transfer to you and continue running on their original schedule — typically 25 years on panel product, 30 years on panel performance for the equipment classes Propel uses, and 10-25 years on inverter depending on model. The third-party owner's bundled O&M and performance commitment ends at transfer; you become responsible for service calls outside warranty. Most homeowners simply stay with NuWatt on a service-only basis post-transfer. Final warranty terms are confirmed against your equipment package at signing.
Who handles permits and interconnection during the ESA — and during the transfer?
During the Propel ESA window, the third-party owner is the listed system owner on the building permit, electrical permit, and the Eversource, National Grid, Unitil, or MLD interconnection agreement. NuWatt handles the paperwork end-to-end as the installer of record. At ownership transfer, the interconnection-of-record holder is updated — typically via a notice-of-assignment to the utility — and the SMART 3.0 customer-of-record updates accordingly. You do not need to re-permit the array. NuWatt manages the transfer paperwork; you sign once. Final transfer mechanics are confirmed at MA program launch.
Section 4
Selling Your Home with Propel
Four questions on assumability, appraisal treatment, and buyer qualification — built around two decades of solar-lease lessons.
What if I sell my house mid-ESA?
You have two primary options if you sell during the Propel ESA window. First, the ESA can be assumed by a qualified buyer, transferring the remaining monthly payments and the path to ownership to them. Second, you can prepay the ESA at the applicable buyout amount, deliver the system free-and-clear to the buyer, and roll the cost into your closing. Most homeowners selling between years 3 and 7 use the assumption pathway; homeowners selling at the early-buyout milestone or later often prepay. Final assumability mechanics will be defined at MA program launch.
Does the Propel ESA transfer to the buyer?
Yes, by design. Propel is structured to be assumable by a qualified buyer of the home — that assumability is one of the contract requirements NuWatt set up front, in direct response to two decades of solar-lease horror stories where unassumable contracts sank home sales at year 15. The buyer signs an assumption package, takes over the monthly payment, and inherits the same path-to-ownership schedule you signed. Some buyer-credit qualification is required (see next FAQ). Final MA assumption process and any associated transfer fee will be defined at program launch.
How does Propel affect appraisal vs a traditional lease?
Appraisers treat Propel differently from a 20-year lease because Propel includes a defined ownership transfer. A traditional unowned lease typically adds zero appraised value (and can subtract value if the contract is unassumable or has a steep escalator). An ESA with a documented buyout schedule and a clear ownership pathway is generally treated more favorably — closer to an owned-but-financed system — though appraisal practice varies by appraiser and lender. Bring a copy of your ESA buyout schedule to the appraisal to make the value contribution defensible. Practical appraisal outcomes will continue to evolve as Propel reaches more MA homes.
What are typical buyer-credit requirements for assumption?
Propel ESA assumption typically requires the buyer to meet a soft-credit threshold similar to the original homeowner qualification — generally a mid-600s FICO or above, with no recent bankruptcies and verifiable income to cover the ESA payment alongside their mortgage. The exact MA threshold will be set at program launch and may differ slightly from the live Maine and Texas Propel markets. Pre-listing your home, NuWatt can run a discreet pre-qualification check on serious buyers so you know the assumption path is open before the contract is signed. Final qualification details are confirmed at the assumption application.
Section 5
Massachusetts-Specific
Six questions on ConnectedSolutions, MLD eligibility, Mass Save and the 0% HEAT Loan, SMART switching, NEM 1.0, and the MA waitlist timing.
Does Propel work with ConnectedSolutions battery in Massachusetts?
ConnectedSolutions is the summer/winter battery dispatch program run by Eversource, National Grid, and Unitil that pays per kW dispatched. Under a Propel ESA on a bundled solar-plus-storage project, the third-party owner would typically hold the ConnectedSolutions enrollment and the dispatch payments would flow into the program economics. Final MA Propel-plus-ConnectedSolutions stacking mechanics — including whether any portion of dispatch payments is shared with the homeowner — will be published at program launch. Battery-only customers (no Propel solar) can still enroll directly. This is the program design intent as of Apr 2026.
Will my MA municipal light department (Belmont, Concord, etc.) participate?
Roughly 40 MA municipal light departments — including Belmont, Braintree, Concord, Wellesley, Taunton, Reading, and others — operate outside SMART 3.0 with their own net-metering and rebate policies. Propel eligibility in MLD territory depends on the local interconnection rules, retail-credit structure, and whether the MLD's compensation model supports the ESA economics. Some MLDs will be in-network at MA launch; others will require case-by-case review. Flag your MLD on the waitlist or quote form so NuWatt can confirm eligibility before you commit. Final MLD-by-MLD coverage will be published at program launch.
Does Propel layer with Mass Save heat-pump rebates and the 0% HEAT Loan?
Yes. Mass Save programs — heat pump rebates (up to $8,500 for whole-home cold-climate systems), insulation, weatherization, home energy assessments, and the 0% HEAT Loan up to $25,000 — are delivered by Eversource, National Grid, Unitil, and Cape Light Compact independently of how your solar is financed. Propel does not compete for the same dollar. You can put solar on Propel, electrify your heating with a Mass Save-rebated heat pump, and finance the heat pump on the 0% HEAT Loan, all at the same time. Note: Section 25C (the federal heat-pump tax credit) expired December 31, 2025 — Mass Save is the active stack now.
What if my SMART 3.0 application is already approved — can I switch to Propel?
It depends on how far along the SMART 3.0 application sits. If your application is approved but the system is not yet installed and not yet energized, NuWatt can typically restructure the project under a Propel ESA before SMART activation, with the third-party owner becoming the SMART customer of record. If the system is already energized and SMART payments have started flowing to you, switching to Propel mid-stream is generally not practical. Bring your SMART approval and any installer agreements to your Propel design call so the right pathway can be selected. Final case-by-case mechanics confirmed at program launch.
Does Propel make sense if I have NEM 1.0 grandfathered net metering?
If you currently have NEM 1.0 grandfathered net metering on an existing system, replacing or adding to that system can sometimes jeopardize the grandfathered status — a separate decision worth careful review. For homeowners without an existing system, NEM-vs-SMART trade-offs in MA are largely defined by SMART 3.0 today, and Propel is built around SMART 3.0 economics. Bring your existing interconnection agreement, NEM status documentation, and current SMART eligibility to your design call. NuWatt will not push you off a favorable NEM 1.0 status without a clear net-benefit analysis. Final case-by-case treatment is confirmed at signing.
Is Propel available in Massachusetts now?
Yes — Propel is live in Massachusetts. You can start online today: get an instant solar design for your address, choose Propel to see the $0-down structure, and run the soft-credit prequalification (no impact to your credit score). Your Massachusetts system price, the SMART-3.0-under-ESA specifics, and the agreement's buyout schedule are confirmed during your consultation. See our Propel Solar MA page to begin.
Section 6
Risk and Edge Cases
Five questions on counterparty risk, production guarantees, default, insurance, and reroofing during the ESA term.
What if Propel-the-company is sold or fails?
Your Propel ESA contract sits with a specific contracting entity, not with NuWatt's marketing brand. If that entity is sold, the ESA transfers to the acquirer with the same terms — buyout schedule, monthly payment, and ownership-transfer pathway are all contractually fixed and assignable. If the entity fails, the assets (your system and the ESA receivable) typically pass through bankruptcy to a successor servicer who continues collection on the same terms. Your installed equipment is yours to use either way; the question is who you write the monthly check to. NuWatt's installation, workmanship warranty, and roof-penetration warranty are independent of the ESA financing entity.
What if my system underperforms — is there a production guarantee?
Propel is designed to include a production guarantee during the ESA window: if the system produces less than the kWh threshold defined in your contract over a measurement period (typically annual), the third-party owner makes you whole, usually as a credit against future ESA payments. The threshold is set at a deliberate haircut below the design estimate to account for normal weather variability, so it is a real backstop, not a marketing line. After ownership transfer, the production guarantee ends and the manufacturer's panel performance warranty (typically 25-30 years at 80%+ output) takes over. Final MA production-guarantee terms are confirmed in your ESA at signing.
What if I default on the monthly payment?
Default escalation under a Propel ESA follows a structured path, not an immediate lien on your home. Late payments trigger written notice and a cure period. Continued non-payment leads to acceleration of the contract — generally meaning the buyout amount becomes due — and the third-party owner has the right to remove the system at the homeowner's cost if the contract is not cured. Propel is not a mortgage; it does not have first-position lien rights against your home in the way a HELOC does. If you anticipate hardship, contact servicing early — most situations are workable with a payment plan. Final default terms are defined in the ESA at signing.
What about insurance — who insures the system?
During the Propel ESA window, the third-party owner typically carries property insurance on the system itself. You will be asked to add the third-party owner as an additional insured on your homeowner's policy and to confirm your policy's dwelling and other-structures coverage limits accommodate the rooftop array (most MA carriers do this with no premium increase). After ownership transfer, the system is yours and lives under your homeowner's policy; you may want to confirm coverage limits at that point. Specific MA insurance requirements and certificate-of-insurance language are defined in the ESA at signing.
What about roof penetration warranty if I need to reroof during the term?
Propel installations carry a roof-penetration warranty separate from the ESA — typically 10 years on flashing and mounting points, longer on workmanship. If you need to reroof during the ESA window, NuWatt coordinates panel removal and reinstallation with your roofer; there is a removal-and-reinstall service fee, and the original penetration warranty restarts from the reinstall date. We strongly recommend reroofing before solar installation if your existing roof has fewer than 10-15 years of expected life, which is exactly why our design call includes a roof age and condition review. Final reroof and warranty mechanics are confirmed at signing.
Source of Truth — Read Before You Sign
Final ESA terms, escalator percentages, buyout schedules, and assumability mechanics will be defined at MA program launch. Numbers and timelines in this guide reflect Apr 2026 NuWatt program design intent. Your specific contract — not this page — is the binding document. Confirm against your specific ESA at signing.
Buyout dollar values are quoted in your ESA, not on this page — NuWatt does not publish placeholders.
Section 25D (residential ITC) expired Dec 31, 2025; Section 48E (commercial ITC) is active — projects that began construction by July 4, 2026 locked in the full credit timing, and later projects still qualify if placed in service by Dec 31, 2027.
MA personal income solar tax credit is 15% of net expenditure capped at $1,000 — available to cash and loan buyers, not Propel ESA customers.
Mass Save heat-pump rebates (up to $8,500 whole-home) and the 0% HEAT Loan up to $25,000 stack independently of your solar financing.
Related Massachusetts Solar Guides
The full Propel research stack — comparisons, sibling structures, and the broader MA financing playbook.
Join the Massachusetts Propel waitlist or book a 30-minute design call. NuWatt walks through the ESA term, buyout schedule, §48E pass-through math, and Mass Save layering against your specific home and utility — Eversource, National Grid, Unitil, or MLD.
