How the Prepaid Solar Lease Works: Save 30% Upfront

Most Arizona homeowners know they want solar, but the question that stops them is how to pay for it. A loan means monthly payments. A purchase means a large upfront cost. The prepaid solar lease is different from both, and for many Phoenix Valley homeowners it has become the easiest way to go solar and save money from day one.

What is a prepaid solar lease?

A prepaid solar lease is exactly what the name says. You pay for the solar system upfront as a single lump sum, and in exchange you get a substantial discount off what the energy from those panels would otherwise cost. Through Phoenix Valley Solar, that discount is 30%, meaning you are locking in clean energy at a rate well below what you would pay to APS or SRP for the same electricity over the life of the system.

The core difference from an outright purchase is that you are paying for the right to use the energy the panels produce, not buying the hardware as an owned asset. There are no monthly lease payments because you have already paid. No loan, no interest, no debt. Just lower electricity bills for the next 25 years.

How the 30% savings works

When you enter a prepaid solar lease, the system is priced so your effective energy rate is 30% below the current utility rate. The average APS residential customer in the Phoenix Valley was paying around 14 cents per kilowatt hour in 2025. A 30% reduction locks your effective rate close to 10 cents. On a home using 1,500 kilowatt hours per month, that translates to roughly $60 saved every month, or about $720 per year.

Over 25 years those numbers grow considerably, especially considering APS has historically raised rates between 4 and 6 percent per year. The energy you locked in at a prepaid rate does not change with those increases. Your neighbors on a standard APS plan will keep paying more each year. Yours won't move. Run the numbers for your specific home through our solar calculator to see what the real savings look like.

No loan, no credit check, no monthly payment

This is the part that surprises most homeowners. A solar loan sounds appealing until you realize you are paying interest for 10 to 20 years, and the monthly payment has to undercut your current electric bill by enough to make the math worthwhile. With a prepaid lease, there is no loan at all. No lender, no interest rate, no new debt on your household balance sheet.

Because you are prepaying rather than financing, there is no credit check required. Homeowners who have been turned down for solar loans, or who simply do not want to take on new debt, often find this is the structure they were looking for. The Phoenix Valley Solar team works with qualified installers across the valley to structure these agreements around each homeowner's situation.

Who qualifies for a prepaid solar lease?

Qualification is based mainly on your home and your roof. The system needs enough south or west facing roof space to accommodate the panels, and the roof should be in reasonable condition. You do not want to remove panels to reroof a few years after installation. Most single family homes in the Phoenix Valley qualify without issue.

There is no income requirement and no credit score minimum since there is no financing involved. Homeowners in Phoenix, Scottsdale, Chandler, Gilbert, Mesa, Tempe, Peoria, Goodyear, and across the valley have gone this route. If you are unsure whether your home qualifies, the fastest way to find out is to contact us or get a quick estimate through our solar calculator.

How it compares to a regular solar lease

A regular solar lease and a prepaid solar lease are related but meaningfully different products. With a regular lease, you pay nothing upfront and instead make monthly payments to the company that owns the panels. Your savings are smaller because the leasing company captures a significant portion of the margin. If you sell your home, the lease has to transfer to the new buyer, which can complicate a transaction.

With the prepaid version you have already settled the cost at a 30% discount. The arrangement is cleaner at the time of a home sale. Your total savings over the life of the system are substantially larger because you captured that discount at the start rather than paying smaller monthly amounts over decades while the leasing company takes the difference.

Prepaid solar lease savings for Phoenix homeowners

Phoenix homeowners face some of the highest cooling costs in the country. Air conditioning alone can push summer APS bills above $400 for a typical 2,000 square foot home. As we covered in detail in our post on APS rate increases and how they affect Phoenix homeowners, those bills have climbed steadily and show no sign of reversing.

A prepaid solar lease changes that equation entirely. Your cooling load does not get cheaper, but the energy you use to run your air conditioning costs far less when it comes from a prepaid solar array rather than the APS grid. Homeowners who go this route consistently report their summer bills dropping by half or more after solar is installed.

Scottsdale, Chandler, and Gilbert

Scottsdale, Chandler, and Gilbert rank among the fastest growing cities in the country. More residents and more homes put sustained upward pressure on demand, which typically drives utility rates higher over time. For homeowners in these cities, a prepaid solar lease functions as a long term hedge against those increases.

Scottsdale homeowners with larger homes and higher monthly usage tend to see bigger absolute dollar savings from a prepaid lease because there is more consumption to offset. Chandler and Gilbert are home to thousands of newer homes, many built with solar ready rooftop designs, making them strong candidates for installation with minimal structural modification.

Mesa and Tempe

Mesa is the third largest city in Arizona and Tempe sits at the geographic center of the metro. Both cities have a mix of older and newer housing stock. Older homes often have higher energy consumption because insulation and window efficiency standards were less stringent when they were built, which creates more opportunity for meaningful solar savings.

A Mesa or Tempe homeowner using 1,800 kilowatt hours per month, a figure common in a larger older home running air conditioning through the summer, could see annual savings well above $800 on a prepaid lease. That is money staying in the household budget rather than going to APS.

Why Phoenix Valley Solar uses the prepaid lease model

Phoenix Valley Solar operates as a solar broker, not a single installer. That means we compare options across multiple qualified installers to find the best pricing and system design for each homeowner. The prepaid lease fits that approach because it delivers maximum savings without adding debt. We have seen too many homeowners locked into solar loans at high interest rates that eat into their actual savings. The prepaid structure tends to win when you run the full numbers over the life of the system. Learn more about how the broker model works on our about page.

Phoenix averages 6.5 peak sun hours per day, placing it among the most solar productive markets in the country. As we detailed in our post on Arizona sun hours and why Phoenix gets more solar power than almost anywhere, that production advantage makes the economics of a prepaid lease even stronger here than in most other states. More sun hours means more energy produced per panel, which means more value from every dollar put in.

Frequently asked questions

What happens at the end of the prepaid lease term?

Most prepaid solar leases run 20 to 25 years. At the end of the term you typically have the option to renew the agreement, have the panels removed, or in some cases purchase the system outright. In many situations the panels still have useful life remaining and homeowners choose to continue under a renewal arrangement.

Can I get a prepaid solar lease if I plan to sell my home in a few years?

It depends on the specifics of the agreement. Some prepaid leases transfer with the home at sale, which can be a genuine selling point for buyers who are already paying below market rates for electricity. Others allow a buyout option at the time of sale. Contact the Phoenix Valley Solar team to understand how a specific agreement would handle a potential transaction.

Does the prepaid lease still save money if APS raises rates?

Yes, and this is one of the strongest arguments for the prepaid structure. Because your energy rate was set at the time you signed, future APS rate increases only apply to electricity you pull from the grid beyond what your solar array produces. The solar energy itself cost what you already paid, not a cent more.

Is there really no credit check for a prepaid solar lease?

Correct. Because you are paying upfront rather than financing, there is no credit approval process. Your qualification is based on your home and roof condition, not your credit history or score.

How do I get started with a prepaid solar lease in Arizona?

The easiest first step is to run your numbers through our solar calculator to get a baseline estimate of your savings potential. Then contact us and we will connect you with a qualified installer to walk through the specifics of a prepaid lease for your home.