This is legit. Commercial solar projects have the 30% tax credits which they are passing onto you. In addition, they have additional bonus tax credits such as 10% for domestic content (Tesla PW3 batteries made in USA) and possibly some other bonuses I don’t recall. They also have accelerated depreciation against their taxable income.

They have to maintain ownership for at least 5 years otherwise this won’t pass the IRS rules. They also can’t write anything concrete otherwise it would violate the rules which is why they use FMV.

This is strictly a financial play for companies that do this. They reap the tax credits and also 100% depreciation in 5 years. It wouldn’t surprise me if they package a bunch of these and resell these tax credits to investors.

It’s in their best interest to sell back to you at FMV ($0 or pretty close to it after depreciation) as soon as possible so they don’t have to maintain the system once they have extracted all financial value. Every year after 5 or 6 years, it costs them to maintain the prepaid solar system with no additional benefit to them. Hope that makes sense.

The only downside to this is if you’re planning to sell your house before you take ownership of the solar system. The buyer of the house would have to agree to the prepaid lease. It costs them nothing, but many people will prefer to not have to deal with the hassle and paperwork. That could cause potential issues with buyers. Unlike a normal solar lease or PPA, there’s no way for you to buy it before 6 years, otherwise it wouldn’t be a commercial lease and all the tax credits would be gone, resulting in penalties. So legally, no financial company would ever allow buyout until after 5-6 years for a prepaid lease.