Rooftop Solar Leasing Dominating Residential Market in California | KCET
Rooftop Solar Leasing Dominating Residential Market in California
If you've been to a large chain hardware store recently, you've seen the display kiosks in the aisles that tell you you can install solar panels on your home for no upfront costs. The companies behind these ads make up what just might be the fastest growing section of California's renewable energy trade: solar leasing companies.
The basic idea behind solar leasing is that a firm will inspect a property, determine whether it's suitable for solar and how much, then install solar photovoltaic panels. Property owners don't have to shell out thousands of dollars in upfront costs; many pay nothing upfront at all. Instead, they pay a fixed-rate monthly lease fee to the leasing company. The property owners pay less in lease fees than they did in monthly electric bills, and they get the satisfaction of consuming renewable electricity.
With a win-win business plan like that, it's no wonder solar leasing is growing even as other sectors of the PV industry are retrenching. According to SunRun, which pioneered the solar leasing business model, 73% of Californians who install PV on their property now use solar leasing firms. In addition to SunRun, firms such as Solar City, Sungevity, and Solar Leasing of California have entered the market aggressively.
There are critics of the leasing model. In late June Hagens-Berman, a Seattle-based law firm, started seeking interviews with SunRun customers to see if there were grounds for a class action lawsuit over deceptive business practices in California. At issue are the length and terms of the contracts. Most leasing firms' contracts include an escalating lease fee, explained away by the leasing companies as still less than increasing energy costs would have been.
But the assumption that grid electricity prices will continue to increase at 6-7%, a figure often cited by leasing companies, may not hold true in the medium term. Due to the controversial practice of hydraulic fracturing or "fracking," natural gas has been steadily dropping in price and is about to overtake coal as the U.S.'s main source of electricity. Customers locked into a 20-year contract with increasing fees while electricity from the gas-powered grid gets cheaper may find themselves regretting their decision to lease.
Still, business forecasters are optimistic enough about solar leasing as a business model that a number of banks announced last week that they are looking into the possibility of "securitizing" solar power. In other words, banks' underwriters are thinking about creating a new derivatives market based on future income from existing solar power installations. This would allow investors to gamble on the future of the rooftop solar market, theoretically generating capital that could be lent to solar leasing firms for new installations.
Will this be a shot in the arm for the industry, or gateway to yet another financiers' gutting of an entier industry? It's too soon to tell, but the between that and the possibility of a class action suit the next few months will certainly be interesting ones in the land of solar industry wonkdom.
For ongoing environmental coverage in March 2017 and afterward, please visit our show Earth Focus, or browse Redefine for historic material.
KCET's award-winning environment news project Redefine ran from July 2012 through February 2017.
Former Los Angeles County Sheriff Lee Baca was ordered today to turn himself in no later than Feb. 5 to begin serving a three-year federal prison sentence for obstruction of justice and lying to the FBI.
A proposal to declare a climate emergency in Alaska has brought up long-running tensions over development and conservation among the groups that advocate on behalf of Alaska’s Indigenous people.
State officials quietly gave away a significant portion of Southern California’s water supply to farmers in the Central Valley as part of a deal with the Trump administration in December 2018, potentially harming California salmon and L.A. County.
Sharon Ellis' luminous landscapes draw on nearly the whole history of landscape painting. Think American Luminists, Charles Burchfield and his "animated landscapes" and even Light and Space artists James Turrell and Robert Irwin.
- 1 of 232
- next ›