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Get a Free QuoteThe prepaid ESA is the legal instrument that makes Propel work. This guide unpacks the contract structure, the four counterparties, the three ownership-transfer windows, and why this arrangement exists now that the residential solar tax credit has expired.
A Propel Energy Services Agreement (ESA) is a prepaid solar services contract under which a third-party owner holds your rooftop system for the first 5 years, claims the Section 48/48E commercial tax credit, and passes that value through into a fixed 25-year payment on a Concert Finance loan originated by Medallion Bank. At year 5, 6.5, or 8, ownership transfers to you automatically via the Early Buyout Option at a pre-set price already built into your loan schedule. There is no escalator, no prepayment penalty, and no requirement that you have personal tax liability to capture the credit.
Years 1–5
Tax-equity owner holds title. You pay fixed monthly. Free O&M + performance guarantee.
Year 5 (or 6.5 / 8)
EBO fires. Ownership transfers to you at pre-set price, built into the loan.
Years 5–25
You own outright. Same fixed payment continues until the Concert loan is paid off.
An Energy Services Agreement is a contract under which one party agrees to provide solar electricity (or, more precisely, the physical system that produces it) to another party in exchange for defined compensation. In the traditional form, that compensation is a monthly fee — similar to a utility bill — usually indexed to a kWh rate or a fixed monthly service charge with an annual escalator.
Propel uses a variant called a prepaid ESA. Instead of paying month by month for 25 years of service, you prepay the entire 25-year service obligation in a single lump sum at the start. You do not write a check for that lump sum — it is financed through a separate 25-year loan issued by Medallion Bank and arranged by Concert Finance. The payment you make each month is a principal-and-interest loan payment, not a service fee.
That small structural difference has large legal consequences. Because you prepaid for the system's output rather than leasing the equipment, the third-party owner is treated as the owner of depreciable solar property under the tax code. That owner can legally claim the Section 48/48E commercial Investment Tax Credit. The credit value is then priced into your loan as a reduced principal balance — which is how a 30% federal tax credit ends up in a residential homeowner's payment in 2026, even though the residential solar credit under Section 25D expired on December 31, 2025.
A standard ESA where you pay monthly service fees is still third-party ownership, but it behaves more like a lease from your financial perspective — you never build equity and the payment can escalate. The prepaid variant converts 25 years of service charges into a fixed amortizing loan, which is how Propel delivers true ownership transfer at year 5 instead of a balloon buyout at year 25.
Unlike a conventional solar loan, a Propel project involves four distinct parties. Understanding who does what removes most of the confusion people have when they first read the contract.
Signs the ESA as the service recipient and the Concert loan as the borrower. Makes fixed monthly payments. Takes ownership at the Early Buyout Option window.
A tax-equity investor, organized by Concert Finance, that holds title to the system for the managed 5-year period. This is the entity that legally claims the Section 48/48E ITC.
The fintech platform that structures the Propel product, arranges the tax-equity, and handles re-amortization when the ITC is captured. Concert is not a bank.
The chartered lender that originates and services the 25-year Concert loan. Federally insured; loan payments are sent to Medallion on Concert's platform.
Concert Finance is the fintech infrastructure layer — it originates the product, coordinates the tax-equity, and runs the platform where your account lives. Medallion Bank is the FDIC-insured institution that actually holds your loan on its books and processes your monthly payments. The tax-equity owner is typically a special-purpose entity formed for a given tranche of Propel projects; you never interact with it directly, but it is the legal party signing the ESA on the other side.
Every residential solar option falls into one of five buckets. The Propel prepaid ESA sits at the intersection of third-party ownership (for tax purposes) and loan economics (for monthly cash flow). Here is how each dimension compares.
| Dimension | Propel ESA | Lease | PPA | Solar Loan | Cash |
|---|---|---|---|---|---|
| How you pay | Lump-sum prepayment financed as a 25-yr loan | Monthly rent for the panels | Monthly rate per kWh produced | Fixed monthly principal + interest | Single up-front purchase |
| Escalator | 0% (flat payment) | 1.99%–2.99% typical | 1.99%–2.99% typical | None | N/A |
| Who owns the system years 1–5 | Tax-equity owner | Leasing company | PPA provider | You | You |
| Who claims the 30% ITC | Third-party owner (under §48/§48E) | Leasing company | PPA provider | Nobody (§25D expired 12/31/2025) | Nobody (§25D expired 12/31/2025) |
| Path to ownership | Automatic at yr 5, 6.5, or 8 (EBO) | FMV buyout at end of term (usually 20–25 yrs) | FMV buyout at end of term | You own from day 1 | You own from day 1 |
| Transfer on home sale | Transfer to qualified buyer, or pay off | Lease assumption (buyer qualifies) | PPA assumption (buyer qualifies) | Pay off at closing or transfer | System conveys with home |
| Prepayment penalty | None | Buyout at remaining contract value | Buyout at remaining contract value | Varies by lender (often dealer-fee recapture) | N/A |
The honest read: in 2026 a conventional solar loan and a cash purchase have both lost their single biggest financial lever (the 30% residential credit), while leases, PPAs, and the Propel ESA all still capture the commercial ITC on the homeowner's behalf. What separates the ESA from the lease/PPA is the path to ownership. With a lease or PPA you stay a service customer indefinitely. With the prepaid ESA you convert to an owner at year 5.
The ESA term is engineered around the federal tax-equity window. Section 48E depreciation recapture rules require the tax-equity owner to hold the asset for a defined period after claiming the credit; Propel structures that period as five years. After that window closes, ownership is free to transfer to you at a pre-set price. Propel provides three contractual windows for the transfer — the Early Buyout Option, or EBO.
The default EBO window most customers exercise. Buyout price is pre-set and built into your existing loan schedule — no new check, no appraisal, no negotiation. Ownership passes from the tax-equity entity to you, and you continue paying the same fixed monthly amount on the remaining 20 years of the Concert loan.
A middle option for customers who want slightly more of the managed warranty window but plan to buy out before year 8. Buyout price adjusts modestly per the ESA schedule, and the monthly loan payment continues unchanged after transfer.
The latest contractual buyout point. After year 8, the structural tax-equity window has fully closed and ownership is expected to sit with the homeowner. Useful for customers who value a longer managed O&M window before taking on operational responsibility.
The EBO price is not an additional payment. At signing, Concert sizes your 25-year loan so that the loan's principal balance at the buyout month equals the pre-set EBO price. When the EBO fires, title to the system transfers to you and the loan keeps amortizing on its existing schedule. Your monthly payment does not change, and you do not bring additional cash.
This is a useful feature to explain at the kitchen table: the customer worried about “what happens at year 5” does not need to save up a lump sum. The loan already accounts for it.
Before January 1, 2026, a homeowner who paid cash or took out a solar loan could claim the 30% residential ITC under Section 25D directly on their personal tax return. Most solar financing in the US was built around that assumption. The One Big Beautiful Bill Act (OBBBA) accelerated the expiration: Section 25D sunset on December 31, 2025, and the Section 25C home-efficiency credit ended on the same date.
What remained — and what the ESA is designed to access — is the commercial ITC under Section 48/48E. That credit is still available to entities that own solar property as a business asset, subject to a construction-start deadline of July 4, 2026 for most projects. A homeowner cannot personally claim Section 48E; you would need to be a commercial taxpayer with a depreciable solar asset on your books. A tax-equity owner can.
The ESA is the legal wrapper that makes this transfer mechanically possible. The third-party owner acquires the system, places it in service, and claims the credit. The credit value (30% base, up to 40% with domestic-content qualifying panels, up to 50% in designated energy communities) flows into a reduced principal on your Concert loan. The result is a fixed 25-year payment roughly 30–40% lower than it would be on a post-§25D cash-equivalent basis.
30%
Base §48E commercial ITC
+10%
Domestic content adder (Silfab 440W panels may qualify)
+10%
Energy community adder (IRS-designated)
Adder eligibility is determined project-by-project. Domestic Content is required for all Propel projects — Silfab 440W panels are the default to position every project for the domestic content adder, and the prior $0.20/W installer rebate has been folded into the realized homeowner discount. Energy community qualification depends on the specific census tract of your address and is checked during design.
The actual monthly figure depends on your system size, credit tier, state price-per-watt cap, and adder eligibility. Below are illustrative scenarios using the published Propel pricing engine — gross system cost after a 40% captured ITC (base + domestic content), financed at the current APR tiers over 25 years.
| Scenario | System | Gross cost | After 40% ITC | FICO tier | Fixed monthly |
|---|---|---|---|---|---|
| Maine — typical | 9.0 kW @ $3.14/W | $28,260 | ~$16,956 | 740+ (8.49%) | ~$137/mo |
| Maine — mid-tier | 9.0 kW @ $3.50/W | $31,500 | ~$18,900 | 680–699 (9.69%) | ~$168/mo |
| Texas — typical | 10.5 kW @ $3.30/W | $34,650 | ~$20,790 | 700–739 (9.19%) | ~$177/mo |
| Texas — large home | 12.0 kW @ $3.50/W | $42,000 | ~$25,200 | 660–679 (10.49%) | ~$238/mo |
The figures above are the initial monthly payments. After the third-party owner captures the Section 48E credit — typically around month 12 — Concert applies the ITC proceeds as a principal reduction and re-amortizes the loan. Propel's published re-amortization model reduces the payment by roughly 17–18% at month 13, with smaller step-downs at months 25 and 37.
For the Texas typical scenario above, that means the $177/mo starting payment often steps down to roughly $147/mo after month 13 and settles in the $130s by month 37. From month 37 through month 300, the payment is flat — no escalator, ever.
Illustrative only. Actual monthly payment depends on final design, verified FICO tier, and confirmed adder eligibility. Get a quote to see your exact numbers.
Propel is a strong fit for a specific customer profile. It is not the right product for everyone — and NuWatt is transparent about the cases where another path makes more sense.
Post-2025, any solar provider in your state who tells you the homeowner can personally claim the 30% federal tax credit on a cash or loan purchase of a new residential system is not giving you current information. The residential credit expired on December 31, 2025. The commercial ITC captured through third-party ownership is the legitimate way to price a 30% federal incentive into a 2026 residential solar project.
Getting from “I'm curious” to “I'm interconnected” is a four-step process. The first three steps are reversible — you can stop without cost at any point. The only binding commitment happens at step four.
Share your address, utility, and recent bill. Our tool builds a preliminary system design, estimates kWh offset against your usage, and produces an initial monthly payment range. No credit pull at this stage.
A soft TransUnion pull places you in one of the four RBP (Results-Based Pricing) tiers: 740+, 700–739, 680–699, or 660–679. This does not affect your credit score and gives you the exact APR and fixed monthly payment.
On-site visit to confirm roof condition, shading, main service panel capacity, and interconnection path. Final design, final price-per-watt, and utility interconnection application drafted.
You execute the prepaid ESA with the third-party owner and the 25-year Concert loan with Medallion Bank. Credit pre-qualification is valid for 180 days; final signing must occur within 60 days of approval. First payment is due approximately 75 days after system activation.
Time windows to know:
180 days — credit pre-qualification validity. If you pre-qualify and then take more than six months to sign, a fresh pull is required.
60 days — signing deadline after final credit approval.
~75 days — typical delay between install/PTO and your first Concert payment.
See your exact fixed monthly payment, tier APR, and estimated EBO transfer date — with no credit impact.
A Propel Energy Services Agreement (ESA) is the legal contract that governs the first five years of your Propel solar project. Under the ESA, a third-party tax-equity owner holds title to the solar system on your roof. You prepay for 25 years of the system's output in a single up-front sum, and that prepayment is financed by a separate 25-year Concert Finance loan. The prepaid ESA lets the third-party owner legally claim the Section 48/48E commercial investment tax credit, and that credit value is what funds your below-market fixed payment.
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Propel financing is arranged by Concert Finance. Loans are originated and serviced by Medallion Bank, Member FDIC. The Section 48/48E Investment Tax Credit is claimed by the third-party system owner, not by the homeowner. Illustrative monthly payment ranges on this page are estimates based on Propel's published pricing factors; your actual payment depends on verified FICO tier, final system design, state price-per-watt cap, and adder eligibility, and will be disclosed on your Truth-in-Lending disclosure before signing. This page is informational and does not constitute tax advice — consult a qualified tax professional for guidance on your specific situation.