When asked the question of what stands in the way of solar power adoption, I've often answered that among the barriers is the lack of innovative financing techniques to make the installation of solar panels affordable for the homeowner.
SolarCity, in collaboration with Morgan Stanley, is answering the call to bring such innovative financing to the mass market through its SolarLease program, under which homeowners need only to put $2,000 down, and subsequently pay a fixed monthly fee (not a rate) for a fixed amount of solar power. In other words, SolarCity will arrange for the installation of the solar panels, continue to own such panels, but lease it to the homeowner for the provision of clean solar energy. More importantly, it significantly reduces the upfront costs of purchasing an entire home solar system.
Makes a lot of sense. Afterall, which homeowner really wants to fork out $25,000 for an entire solar system (more than 10 times the upfront fee for the SolarLease program) and physically own those solar panels? Its the power that these panels generate that the homeowner is interested in. SunCity, as the owner of the solar panels, will take advantage of commercial solar tax credits (which are higher than residential solar tax credits) and pass the savings down to the customer. According to the SolarLease webpage, the monthly fixed fee that SolarCity charges would be less than what a homeowner would expect to pay from its utility.
As this article from Greentech Media points out, SolarCity is not the first company to introduce "third-party financing" (or 3P-finaning) to the solar world. The likes of Tioga Energy, MMA Renewable Ventures and SunEdison have been doing it for a while for larger commercial projects. But SolarCity maybe among the first, if not the first, to provide 3P-financing directly to homeowners.