The solar landscape just shifted dramatically. The newly passed One Big Beautiful Bill (OBBB) brings sweeping changes to federal solar incentives. We’ve discussed the specifics (here, here, here, and here), but want to highlight a particular opportunity for solar professionals: TPO.
In this blog we’ll look at why TPO stands out now and what you can do to make the most of it.
What’s changing?
At the center of it all is the sunset of the 30% federal investment tax credit (ITC) for homeowners. As of December 31, 2025, customers who buy their solar systems outright or via loan (covered under Section 25D) will no longer qualify for the federal ITC. That’s a big shift for residential solar financing models, which have been dominated by cash and loans for years. In plain English, the recent shift from cash and loans to TPOs is going to continue. Here’s why: Third-party owned (TPO) systems — such as solar leases and power purchase agreements (PPAs) — still qualify for the 30% credit through Section 48E, provided they’re placed in service by the end of 2027.
This can make TPO the preferred option for some homeowners to access solar incentives after 2025.
What this means for residential solar sales
The market is already reacting. Expect a short-term surge in leads (and ideally sales) through the end of 2025 as homeowners rush to take advantage of the ITC. And remember, the window is closing fast, with all projects needing PTO by December 31, 2025. But after that? Things might look very different.
Here’s what’s coming:
- Loan sales become a harder pitch. Without the 30% tax credit, many loan-financed systems will see longer payback periods and reduced savings.
- TPO continues to gain market share. As early as 2026, most cost-conscious customers will likely choose a lease or PPA to keep monthly bills low.
- Margin compression intensifies. TPO projects typically offer slimmer margins, meaning installers will need to become leaner, faster, and more efficient. Reducing soft costs through automation will be key.
If your proposals rely heavily on solar loans, now’s the time to add TPO to your arsenal.
Why it’s the right time to offer TPO
TPO isn’t new — it already accounts for about 45% of residential installs in the U.S., with companies like Sunrun, Palmetto (LightReach), EnFin, and GoodLeap leading the charge. But in the post-OBBB world, TPO will go from a competitive edge to must have.
That’s because TPO still brings:
- Access to the 30% federal ITC (through 2027)
- Potential for bonus credits (energy communities, domestic content)
- Ability to bundle in ITC-qualifying storage products
- Low or $0 upfront cost for homeowners
- Simplified ownership and maintenance for consumers
- Strong monthly savings with minimal friction
TPO providers can pass tax credit savings on to customers, keeping solar affordable — even as policy support for ownership vanishes.
Don’t forget about FEOC compliance
Starting January 1, 2026, the OBBB also introduces Foreign Entity of Concern (FEOC) rules, which require increasing percentages of solar system components to come from non-Chinese sources. This applies to all systems claiming the ITC — including TPO.
Specifically, to qualify for the 48E credit, at least 40% of total project costs must come from non-FEOC sources — with the threshold increasing over time. Individual components must meet a FEOC source ratio of 50% (for solar panels and inverters) and 60% (for batteries) to be considered FEOC compliant under this rule. See the table below for a breakdown of the FEOC requirements.
| FEOC Requirements | ||
| Requirement | Definition | % threshold |
| Components | Panels and inverters | 50% |
| Storage | 60% | |
| Project | Total project cost | 40% |
If you’re sourcing equipment in bulk, start assessing compliance risk now. Safe-harboring compliant inventory may buy your business precious time to maintain credit eligibility.
How to prepare your solar business
1. Add TPO to your offerings
If you’re not selling leases or PPAs yet, get started now. Partner with financing providers offering TPO programs tailored for residential markets. Many of them, including Aurora-integrated partners, are actively expanding their installer networks.
2. Train your sales team on TPO
Selling TPO means a different conversation. Your team needs to clearly communicate:
- The benefits of solar without ownership
- How monthly savings work
- What’s included (maintenance, monitoring, escalation rates)
- The realities of long-term agreements (20–25 years)
Avoid hype or vague promises. Be transparent and trustworthy — especially as TPO adoption accelerates.
3. Streamline your project workflows
Speed and accuracy are critical under new policy timelines. Aurora’s TPO integrations can help you:
- Quote and design TPO projects directly in your proposal software
- Review your supply chain for 48E compliance
- Ensure alignment with financing partners’ requirements
- Reduce redesigns and accelerate approvals
- Eliminate costly errors and delays
You need software that works with — not against — your TPO process.
4. Educate customers (and create urgency)
Help homeowners understand their shrinking window for ownership-based incentives. If they want to own their system and access the tax credit, their system has to be installed before the end of 2025 — which means they need to act now. For those exploring solar in 2026 and beyond, TPO may be a path to meaningful savings.
5. Optimize for margin and volume
To maintain your margins, and keep solar attractive to customers as incentives expire, it’ll be more important than ever to find ways to cut soft costs. Winning solar companies will:
- Use AI & automation to boost operational efficiency
- Speed up permitting and PTO
- Maintain competitive install timelines
- Deliver customer value efficiently
Policy changes will favor companies that can adapt quickly and provide value to customers even with fewer incentives. Don’t wait to get lean.
Aurora’s TPO tools make it easier
Whether you’re adding TPO for the first time, or scaling up your existing lease/PPA offerings, Aurora Solar helps make your transition frictionless. With Aurora, you can:
- Quote TPO financing options side-by-side with other payment methods
- Automatically configure system designs to meet TPO partner requirements
- Use Sales Mode to generate instant, accurate proposals in front of the customer
- Accelerate your approval and install timeline
💡 Learn more about Aurora’s TPO integrations →
Final takeaway
The OBBB rewrote the rules — and TPO is now at the center of residential solar’s future. For solar pros, the message is clear: adapt fast or fall behind.
By aligning your sales, design, and installation workflows around TPO — and leveraging integrated platforms like Aurora Solar — you won’t just navigate this policy shift, you’ll build in resilience to help your business stay strong no matter what challenges come your way.
[Explore Aurora’s TPO tools →]
