HDM solar financing: A pre-paid PPA with a path to ownership

If you've been researching solar financing options, you've probably encountered the usual suspects: Cash purchases, solar loans, and traditional leases or power purchase agreements (PPAs). But there's another option that's gaining traction, especially after recent tax law changes made it more attractive: The pre-paid PPA.

HDM Renewable Finance has been offering pre-paid PPAs since 2017, years before the 2025 tax law changes made this financing model more widely popular. With over 20,000 systems under management across seven states (and counting), HDM has pioneered a financing structure that lets homeowners get solar installed with a significant upfront discount while maintaining a clear path to full ownership after six years.

“For six years, homeowners get an extra pair of eyes. During that time, we provide a production guarantee, monitoring, insurance, and maintenance on that system—it never costs the homeowner to go this route, ” Austin Spilsbury, director of sales at HDM, said to EnergySage. “At the end of year six, they own it outright, just like we didn't exist—but they got a big discount upfront.”

We'll walk you through how HDM's pre-paid PPA works, who it's best for, and how it stacks up against other solar financing options.

Pre-paid PPAs work differently from traditional PPAs. Here's how the process works:

• At installation: Your solar installer quotes you a system price—let's say $50,000. HDM claims rights to the federal tax credit worth 30% to 50%+ of the system cost (we’ll use 30% for this example, or $15,000). They share about 20% of that system cost with your installer, who passes it along to you as an upfront discount. So, instead of paying $50,000, you pay $40,000 right at installation.

• During the first six years: HDM owns your system. During this time, they’re responsible for monitoring and maintaining the system. 

• After six years: HDM transfers full ownership of the system back to you at no additional cost.

HDM vs. other solar financing options

Seven years of proven track record

HDM started offering pre-paid PPAs in 2017, making it one of the longest-running providers of this financing model in the country. According to an HDM representative who spoke with EnergySage, the company is currently transferring systems back to their original owners, indicating that its ownership transfer process actually works as promised.

Clear path to ownership

HDM's agreements explicitly state that ownership transfers at year six with zero cost to you. While the contract itself lists “fair market value” for IRS compliance purposes, HDM has a memorandum of understanding (MOU) that they share upfront, explaining exactly how the process works and guaranteeing a $0 transfer.

Additional coverage during the first six years

While HDM owns your system, they provide production monitoring and maintenance. This acts as a buffer between you and potential system issues, ensuring your system performs as expected at no additional cost to you.

You want immediate full ownership

Even though the ownership transfer comes at no additional cost, you technically don't own your system for the first six years. If that's a dealbreaker for you, a traditional cash purchase or solar loan might be better.

HDM isn't available in your state yet

HDM currently operates in seven states: California, Nevada, Utah, Oklahoma, Texas, Colorado, and Illinois. The company plans to expand to more states in 2026, but if they're not in your area yet, you’ll have to explore other financing companies if you want to go solar now.

You plan to move within six years

If you sell your home before HDM transfers ownership, you'll need to handle some additional paperwork. The new homeowner can take over the agreement at no cost since it's prepaid, though they'll need to sign a transfer document. Keep in mind that HDM files a UCC-1 on the solar equipment, which legally declares the company’s security interest in those assets as the lender. This means there's a lien on the panels until the six-year transfer happens (the lien is not attached to your house itself). While this typically doesn't derail home sales, it's an extra consideration if you're already planning to move soon.

HDM's prepaid PPA offers a compelling middle ground for homeowners who want the benefits of ownership without needing to claim the federal tax credit themselves. With a proven seven-year track record, transparent ownership transfer process, and significant upfront savings, it's a solid option for homeowners now that they can’t access the tax credit directly.

That said, solar panel ownership isn't for everyone. Under the right circumstances, a traditional solar PPA or lease may be better suited to your needs. Additionally, several other companies have started offering prepaid PPAs since federal tax law changes in 2025 made this model more attractive. Discount rates and terms vary, so make sure to compare your options to find the deal that makes the most sense for you.