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Clean Power solar power service growth

Published on March 28th, 2012 | by Zachary Shahan

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Over 70% of Californians Go Solar Using a Service (Don’t Buy Their Solar Power Systems)

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solar power service growth 2012
I know solar power enthusiasts who hate solar leasing and other forms of 3rd-party-owned solar. The reason for the hate is that the money an individual or household could receive from electricity bill savings (or electricity production) goes to a corporation instead. While I understand the criticism, I am certainly not in that boat. Why? Because millions of people are going solar through the benefits solar leasing and “solar service” companies offer… and because of these companies’ savvy marketing.

There is a benefit to not having to put down the money for a solar power system. There is a benefit to having drastically lower electricity bills immediately, even $0 electricity bills, without having to put a chunk of money in for that. Yes, if you have the money to actually buy a solar power system, DO THAT. But if you have determined that you don’t, you can start saving money today with solar leasing!

A new report out this week by Sunrun, “the nation’s leading home solar company,” and PV Solar Report, “an authority on solar market data,” shows that a shocking 73.4% of Californians who go solar are now going solar using this option (as of February 2012). They use the terms “3rd-party-owned solar” and “solar power service” to describe this option (which actually includes solar leasing and home solar power purchase agreements). But no matter what you call it or which option you go with, the benefits come down to what I mentioned above. And, in the long run, people can save a ton!

“Sunrun invented solar power service in 2007 as a way for homeowners to go solar without spending $30,000 or more to buy the panels,” the company notes. “Sunrun owns and maintains the panels and homeowners pay a low rate for power. The model increases local economic growth by infusing outside investment dollars into neighborhoods and communities. Consumers also have the added benefit of free maintenance and monitoring on their systems.”

solar power service growth

Last year, in June, solar power service passed up purchasing of solar power systems as the #1 way to go solar in California. Obviously, the sub-sector continues to grow. Compared to the first two months of 2011, 3rd-party-owned solar grew 174% in California.

solar power service growth 2012

The report notes that, so far in 2012, this solar sub-sector “has generated over $100 million in growth for the California economy.”

“Every consumer in today’s economy is looking for ways to save money, and now they can do that with a solar option that allows them to make the switch without owning the panels,” said Stephen Torres, founder and managing director of PV Solar Report. “This trend is taking hold on a national scale and PV Solar Report continues to track this and other critical data to provide up-to-date insight on how the solar market is growing.”

More information on the report: “PV Solar Report’s analysis is based on data from the California Solar Initiative (CSI) and an executive brief is available here. The CSI includes data from the California utilities SDG&E, PG&E and SCE. PV Solar Report is also expanding its services to New Jersey and more information can be found at www.pvsolarreport.com.”

Source: Sunrun
Images: 1st chart via PV Solar Report, 2nd chart via Sunrun






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About the Author

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy since 2009. Aside from his work on CleanTechnica and Planetsave, he's the founder and director of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.



  • EB

    I need Solar Panels but I was told by Solar companies that without a 700 credit score I could not qualify. What’s going on.

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  • dune77

    Good for you, I’m sure your mommy and daddy are real proud of your Ms/MBA but let me tell you this industry has alot of highly trained and highly skilled indivuals that are competent to do what you think you need all this education for, if that was the case what about Bill Gates, Michael Dell, the list goes on and on of college dropouts or no college at all. If a person has the desire and the commitment to work hard and learn, he or she want be denied even if people like yourself try to set your standards on a industry that is still in it infancy stages, I get what you are saying but let me tell you, we have alot of educated people like yourself who screw up companies all the time look, at our goverment case in point.Doing lease financing it’s not alll the complex that you are trying to get people to believe. I will put myself up against any one of your highly educated employees that work at your company and I can out sell any one of them .It doesn’t matter if you are technically sound, if you can’t sell the product what’s your value even with all your degrees.

  • http://pulse.yahoo.com/_5EDH4U3H2CBS2FPMW3OZIIHVHQ Ron

    Now that $0 down, FHA Title 1, low interest solar loans are available, only a fool would lease a solar system. With these new solar loans you don’t need any equity in your home and you can qualify with a much lower credit score than a solar lease. The best part with a solar loan instead of a lease is that you get to keep the 30% federal tax credit and other financial incentives for yourself and you own the system instead of renting it and you won’t have a problem selling your home like you will with a solar lease. Solar leases and PPAs are history.

    • http://cleantechnica.com/ Zachary Shahan

      you have a link for more info on those solar loans?

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  • Bob_Wallace

    Seems like there are two separate issues here and we might benefit by separating them.

    1) More people are installing solar.

    That, IMO, is a very good thing. Let’s celebrate it.

    2) Some people who are installing solar might not be making the best financial decision about how to get panels on their roof.

    That’s too bad.

    Some people don’t have an option, they don’t have the cash or credit to allow them to purchase. And (as long as the leasing company company isn’t ripping them off) solar that you don’t own is better than no solar at all.

    Other people are possibly not making the best decision because they’re doing short term thinking.

    Look at the people who could, right now, do just fine with a 100 mile EV yet are spending $15k to $20 for a 30MPG gasmobile which will cost them more to own and drive over a few years.

    ‘If by covetousnesse or negligence, one withdraw from them their ordinary foode, he shall be penny wise, and pound foolish.’”

    • http://cleantechnica.com/ Zachary Shahan

      Completely agree.

  • http://www.aztecsolar.com/solar-services/residential-solar Sacramento Solar Panels

    By saving money through leasing solar power, you can eventually save enough in order to afford for your own solar panels. However, in the meantime, those who lease solar power are still drastically reducing their carbon footprint, all while saving money. Which is what solar power advocates push.

    • Neal

      who cares about the carbon footprint! thats a bunch of junk that no one cares about. Say it in terms people care about – saving money.

  • Wahlink

    I looked into solar lease for my home and in general I like the sound of it as I don’t currently have enough to finance a new solar system. Where they lost me, however, was when I asked about what happens to the lease should I decide to move/relocate. I was told that I would either have to get the new owners to take over the lease or pay for the system outright ( a lot of $$). While I personally would love such a system on my roof I realize that not everyone does and in this housing market I didn’t want to risk it. Now if there was a clause that said that if I move and the new owners don’t want the system on the roof or didn’tt want to take over a lease that it would be removed and the lease terminated I would have signed up in a heartbeat.

    • Bob_Wallace

      Your hesitancy is understandable.

      A couple of things to keep in mind, the housing market is recovering in most places and there’s a fairly large study that found that in California (the only state studied) people who had installed solar got a higher price for their house at sale.

      In fact, the amount of extra sales price (based on comps) was greater than the cost of the solar system.

      http://newscenter.lbl.gov/news-releases/2011/04/21/bright-spot-for-solar/

      • Not_buying_it_bob

        “People who had installed solar got a higher price for their house”, probably because until recently most people who had solar had PURCHASED solar. Even if the study looked at people who leased systems, the “extra sales price was greater than the cost of the system” line doesn’t matter, because people aren’t paying the cost of the system… check the APR on leasing systems. And you need to find someone willing to take on your specific lease…. you sooooooo work for a solar leasing company bob… give it a rest. Purchasing is the best option. Some leasing options make sense. Most don’t. depends on the company/agreement. Be diligent when reading your contracts people… or go check out some message boards from people who leased systems. It’s scary stuff.

    • http://cleantechnica.com/ Zachary Shahan

      Interesting.

  • Stan

    This is an add for solar leasing companies…..they are twisting everything around for their own benefit.
    I am the director of a company that sells an average of 100 systems per year….I am also an MS/MBA from an IVY. I fully am qualified to tell you, that leasing is in the best interest of the leasing company.
    There is no such thing as “coming up with the money” if your solar people are competant…my reps are trained to do a competant financial plan, impliment the best avenue for the individual customer, and then execute that plan. I will never hire a rep who doesn’t have at least an undergrad degree, and even then, he/she has to be at the conversational level to work for me. This isn’t the car business, and we, in this industry, have a responsibility to the state, country, and the planet to rise above greed and do everything possible to make happy, “glad we did it” solar owners”
    Last night, I went on a sales appt. with a new rep. I help him just a little when it came to financing….before we left (with the sale) between the system savings, rolling the system into a mortgage which also paid off their 2nd, and reduced their mtg. interest rate by 2 points….the total cash flow net was almost $600 per month. You can’t do that unless you’re an educated professional with a financial background.

    • WOV

      That IVY sure had some lax spelling standards!

    • http://cleantechnica.com/ Zachary Shahan

      I’m sure the leasing companies are making money. They need to be making something. That said, they are still getting people to go solar who wouldn’t otherwise, and getting them some good electricity savings. I think that’s valuable.

      If companies selling solar can get anyone a solar system (no matter the income level) and offer a better long-term ROI, i think the lesson here is that solar leasing companies are outdoing their competitors in marketing and communications. So, their competitors really need to step it up in that respect.

      (Of course, there’s also the point that a lot of people are horrible at long-term thinking and investment. Still, it’s the onus of the companies trying to make money on a green technology to make more people better at that.)

      (Note: just to be clear, this post was not sponsored in any way.)

    • Note2darlene

      Stan,
      You don’t have to have an undergrad degree to do that dear. . I do that sort of thing everyday. My diploma is from the school of hard knocks.

    • ronwint

      In other words 70% of Californians gave away there federal tax credit worth about $10,000.00 on a typical 6kw solar system and agreed to paying up to 20 years worth of lease payments that probably included an annual lease payment increase on a system with Chinese made solar panels that they won’t own after paying out all that money. Not very bright, California.

  • Trumoor

    So what happens when the incentives go away? and the leasing companies go out of business?

    • Bob_Wallace

      The incentives are ‘up front’. They will have been collected and spent.

      If the leasing company goes out of business someone is going to own the panels. Most likely the creditors when the leasing company goes bankrupt.

      If they wanted the new owners could probably come and take down their equipment. Most likely, they would not want to do so. Used solar isn’t going to be worth a lot in a market where the price of panels has fallen below $1/watt.

      The “new owners” would be best off to continue the lease and collect income or to offer the home owner a good deal, perhaps let them assume ownership and pay off the system over time.

      The latter option I would think the more attractive for a bank or whomever now owned the systems. They could structure the sale so that they get a lot of their money back over a number of years and not have to operate a leasing company, dealing with repairs, etc.

    • WOV

      The incentives have been steadily phasing out for a decade, according to plan, and they’ll be gone in about 4 years, while these companies keep on making money.

      • Johnnie Little

        Interesting that you say that. Can you back this statement up? Oil and Gas still have incentive and that has been for years. Solar has managed to survive on very little incentives, but seeing these all but phase out, I highly doubt that and challenge that statement.

        • Bob_Wallace

          Solar has an automatic phase out.

          Since the federal government kicks in 30% for residential solar the actual dollar amount of the subsidy rides down with the falling price of systems.

          (Now what we need to do is to get our solar prices to where Germany’s are, Almost 3x cheaper than what we pay for exactly the same systems. That would cut solar subsidies tremendously.)

        • http://cleantechnica.com/ Zachary Shahan

          Every study or statement from an energy insider that i’ve seen on the matter puts solar at grid parity within a few years or so. You are right, this is decades or even a century faster than dirty energy options.

          Already hit grid parity in some countries: http://cleantechnica.com/2012/03/15/solar-learning-curve-price-drop-golden-goal-bloomberg-charts/
          and you can play around with when it’s expected to in other countries here: http://go.bloomberg.com/multimedia/solar-silicon-price-drop-brings-renewable-power-closer/

        • WOV

          Google “Tracking the Sun” , annual report from Lawrence Berkeley National Labs has good graphics and metrics on state level solar subsidy phaseout 2004 – present.

      • http://cleantechnica.com/ Zachary Shahan

        Trumoor: in other words, solar will be cost-competitive (not even taking health and grid costs of dirty energy into account) with a ton less in lifetime subsidies than fossil fuels or nuclear.

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