{"id":15789,"date":"2025-03-06T21:37:56","date_gmt":"2025-03-06T21:37:56","guid":{"rendered":"https:\/\/aurorasolar.com\/?p=15789"},"modified":"2025-03-17T19:23:20","modified_gmt":"2025-03-17T19:23:20","slug":"the-rise-of-third-party-ownership-tpo-in-solar-trends-benefits-and-industry-shifts","status":"publish","type":"post","link":"https:\/\/aurorasolar.com\/the-rise-of-third-party-ownership-tpo-in-solar-trends-benefits-and-industry-shifts\/","title":{"rendered":"The rise of third-party ownership (TPO) in solar: Trends, benefits, and industry shifts"},"content":{"rendered":"\n

The solar industry is no stranger to change, and one of the biggest agents of that change recently has been high interest rates. With the days of zero-interest loans a thing of the past (for now), homeowners and solar companies have sought out ways to make a solar install more affordable. Enter third-party ownership (TPO).<\/p>\n\n\n\n

According to reports, TPO volumes increased by 32% in 2023<\/strong><\/a>. This trend continued through Q3 of 2024 with TPO market share growing to 43% nationally<\/strong><\/a>. When looking at key state markets (AZ, CA, CT, FL, IL, MA, NJ, NV, NY, PA, PR, TX), TPO share was 56%. This financing model is proving to be a game-changer \u2014 especially for homeowners who want the benefits of solar without the upfront costs.<\/p>\n\n\n\n

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TPO has (re-)entered the chat.<\/figcaption><\/figure>\n\n\n\n

Why is TPO growing?<\/strong><\/p>\n\n\n\n

As we touched on above, several factors are fueling the rise of TPO in the solar industry:

\u2705 High interest rates<\/strong> are making cash and loan financing less attractive, leading more homeowners to explore TPO options like leases and Power Purchase Agreements (PPAs).
\u2705 The Inflation Reduction Act (IRA)<\/strong> introduced 10% tax credit adders<\/strong><\/a> for qualifying TPO projects, making these options even more financially viable.
\u2705 Increased accessibility <\/strong>\u2014 TPO is helping lower-income households go solar. In 2023, 33% of solar adopters<\/strong><\/a> with an annual income below $50,000 used TPO<\/strong>, compared to only 18% of high-income households ($200,000+).<\/strong> Many industry experts<\/a> expect a market recovery in 2025, and some attribute it to the growth in the TPO segment.<\/p>\n\n\n\n

\u201cWe do expect a market recovery in 2025,\u201d explained Zo\u00eb Gaston, Principal Analyst, US Distributed Solar \u201cwith 14% growth primarily driven by the momentum in the third-party ownership (TPO) segment and investment tax credit adder (ITC) qualification.\u201d<\/p>\n\n\n\n

Want to learn more? Check out our <\/em>Winning with TPO<\/a> webinar to get all your questions answered.<\/em><\/p>\n\n\n\n

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Click the image to register for our TPO webinar!<\/figcaption><\/figure>\n\n\n\n

The road ahead<\/strong><\/h3>\n\n\n\n

While TPO is growing, it can come with challenges. High interest rates are a double-edged sword, pushing homeowners toward TPO but also affecting demand for non-TPO financing models. <\/p>\n\n\n\n

According to Ohm Analytics, \u201cTPO\u2019s market share is expected to continue to increase slightly into 2025 and into the mid-to-high 40% range as some providers expand to additional markets.\u201d <\/strong>This shows that demand for flexible solar financing is continuing its upward trajectory.To capitalize on this trend, solar companies have to look at solutions that streamline the TPO process \u2014 for them and their customers \u2014 helping them reduce change orders, accelerate approvals, and ensure compliance with financier requirements.<\/strong><\/p>\n\n\n\n

The potential impact<\/strong><\/h3>\n\n\n\n

It’s easy to talk about how TPO can help make solar more attractive to homeowners, and help installers sell more, but how does it work in practice? <\/p>\n\n\n\n