US solar residential financing is expected to reach $5.7 billion according to GreenTech Media Research. The new report suggests solar financing for residential homes will grow from $1.3 billion in 2012, to $5.7 billion in 2016, more than four times the current rate.
Much of the strength anticipated in solar residential financing within the next few years will come from third party financing companies, including SolarCity, which have sprung up in recent years. This growing avenue is helping to make solar energy more accessible to the public, making up more than 50% of new solar residential capacity in states including Arizona, Colorado, California, Massachusetts.
Meanwhile, states also seeing bigger market share from third party financing are: New York, New Jersey, Connecticut, Maryland, Delaware, Texas, Vermont, Washington, and Oregon.
“Prior to 2010, there were few residential third-party ownership (TPO) vendors,” said report author and Vice President of GreenTech Media Shayle Kann.
“Since then, the success of companies such as SolarCity, Sunrun, and SunPower has led to a spate of new entrants into the market. Today, we count at least ten TPO companies operating, and a number of others still getting off the ground,” he said.
With solar prices continuing to fall investors have also become is also helping to attract financial backing from investors. A total of $3.1 billion has been provided to over 28 funds. US Bancorp has supplied the most, giving $1.35 billion towards fourteen funds.
“Each company has introduced its own unique version of the residential financing model,” Kann said.
“These vendors differ in their services, their relationships with solar installers, their geographic footprints, their financing sources, and their customer acquisition strategies. As a result, there is now a vibrant competitive market for third-party owned residential solar in the U.S.”
With 684 megawatts of solar installations in the third quarter of 2012 – a 44% increase compared to the third quarter of 2011 — solar energy is advancing quite nicely as a serious part of the US Energy mix, thanks to climate change concerns. With US President Barack Obama using the State of The Union to fight climate change and promote clean energy, the continued growth of residential financing will help make solar an attractive option for homeowners as people become more aware of solar energy’s potential.
A University of Winnipeg graduate who received a three year B.A. with a combined major in Economics and Rhetoric, Writing & Communications. Currently attempting to be a freelance social media coordinator. My eventual goal is to be a clean tech policy analyst down the road while I sharpen my skills as a renewable energy writer. Currently working on a book on clean tech and how to relate it to a broader audience. You can follow me on Twitter @adamjohnstonwpg or at www.adammjohnston.wordpress.com