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Clean Power US PV Installer Market GTM

Published on July 6th, 2014 | by Adam Johnston

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SolarCity, Vivint Solar Top US Solar Residential Installers In Q1 2014

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July 6th, 2014 by
 
SolarCity and Vivint Solar were the top US 2014 Q1 solar residential installers, according to a recent report. GTM Research’s most recent survey of leading solar PV residential installations found some other interesting results as well.

US PV Installer Market GTM

Image Credit: US PV Installer Market via GreenTech Media

SolarCity and Vivint Solar continued their domination of the market, totaling 38%. SolarCity had 29%, beating out its 2013 overall share of 27%. However, it was off the mark from its Q3 2013 results of 33%. Vivint had a 9% share in 2014 Q1.

Completing the top five were: Sungevity, Verengo, and Solar Universe.

The most compelling point from this survey was the ongoing consolidation within the market. The top ten installers control more than half of the residential market at 51.8%. Meanwhile, in 2010, the top ten companies only performed 29.7% of US residential installations. That’s an increase of 22.1% in four years. You can see in the chart above that the top five installers also rose to a record high share of the market.

GTM Research solar analyst Nicole Litvak said the consolidation has been “primarily due to the leading installers growing organically,” despite lots of acquisitions during the year.

“Most of the growth in the residential market can be attributed to the top installers, which have not only effective sales strategies, but also huge referral potential from a large base of existing customers,” Rivak said.

Within the past twelve months, the solar PV residential market has advanced 38% on a year-over-year basis .

Litvak also said that Sungevity, Solar Universe, and NRG Home Solar (outside of the big two) saw their year-over-year growth climb considerably.

It’s been a positive run for the US home solar installation market. Last month, we reported that residential installation capacity outpaced commercial installation capacity for the first time in Q1 2014, 232 MW to 225 MW. GTM forecasts more than 1 GW of residential forecasts this year, thanks to more financing options.

Add the recent purchase of solar panel manufacturer Silevo by SolarCity and the home installation market will continue to see ongoing changes and consolidation.

Three things are for certain: change, consolidation, and innovation will be themes of the day in the solar PV residential market.

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About the Author

is a University of Winnipeg graduate who received a three-year B.A. with a combined major in Economics and Rhetoric, Writing & Communications. Adam is currently attempting to become a freelance social media coordinator. His eventual goal is to be a cleantech policy analyst, and is currently sharpening his skills as a renewable energy writer. Adam is also working on a book on cleantech and how to relate it to a broader audience. You can follow him on Twitter @adamjohnstonwpg or at www.adammjohnston.wordpress.com.



  • ronwint

    Wow! Just think about all those homeowners who are now probably going to have problems selling their homes with a solar lease or PPA attached to it. 10% discount anyone……….anyone ?

    Welcome to the world of the “Underwater Solar Lease”.

    • Calamity_Jean

      Do you have any evidence for this allegation?

      • Bob_Wallace

        Bloomberg published an article in which one homeowner opined that his solar lease cost him 10% of potential resale value. No data.

        And they quoted one appraiser who opined that leases would lower sales price. No data.

        This piece of worthless fluff journalism has set anti-renewable legs aquiver.

        • Patrick Lawson

          The real estate offices that handled that transaction in Maricopa county are the top “green” real estate agents in the state. In fact, they educate other realtors who want to receive their Green and Ecobroker designations.

          The appraiser quoted is the one who is responsible for the energy efficient addendum to the fannie mae appraisal report and provides training to appraisers who want to properly value solar PV.

          …all experts in the field.

          You can’t just make a 20, 30, 40 thousand dollar improvement to a home, encumber it with financing and then give no consideration to the effects on that properties value.

          Solar is great. I’m a huge proponent of it possibly being the best home improvement someone can make.

          That said, the lease has some serious problems. It was a great way to introduce homeowners to the idea of no money out of pocket and cash flow positive financing options and it was a great way to introduce investors to solar, but it’s time is over.

          Unless the industry as a whole wants to see a serious backlash it’s time to start getting educated in regards to other financing options.

          • Patrick Lawson

            It occurred to me that it’s not exactly fair to state “loans are better than the lease, get educated.” and then not provide any tools.

            https://www.azenergyloans.com/files/2014/07/solar-loan-comparison.xlsx

            The above link is to a simple loan comparison calculator that I’ve created. It’s reflective of current terms and rates available for solar PV 100% financing. I’ve found it to be very useful when considering the economics of a solar proposal.

          • http://zacharyshahan.com/ Zachary Shahan

            best solar calculator i know is EnergySage’s. using that one for 10 homes in 10 different states, i found a 50-50 split for which is better — a loan or a lease. i was surprised, thinking the loans would be better.

            that said, some better loans recently hit the market, and i do think purchases with loans will eventually beat out leases, but i don’t think it’s right to outright bash leasing/PPAs and claim it isn’t a smart option for some consumers.

          • Patrick Lawson

            Zachary, thank you for the comment. I remember your article on that calculator and I value your opinion.

            The only issues I have with those calculations is that the loan terms are not displayed. Additionally, as someone with 10+ years finance experience I’m a little perplexed by the changing lease/loan terms based upon geography. Remember: A lease is just another form of financing. Just like the investors behind loans, the lease investors want a fixed return. The varying payments in the 10 state scenario was a bit of a head scratcher for me.

            I can only really speak to the market that I’m in, Arizona. In my market I’ve yet to see a lease beat a loan on payment.

            I don’t mean to bash the lease or PPA. However, in my experience it’s the go-to option for most sales people in their presentation. My niche is in financing energy efficient homes and I have a special focus on solar. In working with local real estate agents I’ve yet to hear of a negative experience with an owned system, but I’m hearing of more and more issues as a result of the fixed monthly lease.

            In my mind, integrators really need to make sure they fully understand ALL financing options and then make sure that they educate their sales people. Otherwise, the current paradigm of :”sell against the solar city lease payment” will continue and a lot of companies are going to be unprepared when solar city pursues their loan program in earnest….

          • Bob_Wallace

            Got data?

            Here’s the problem with that “top appraiser”. If he’s given the title of “most knowledgeable” and he declares that leased solar lowers the value of homes then the value of homes with leased solar will drop. A self-sustaining myth will be created.

            If another appraiser or listing agent discounts a home by 10% because it has a leased solar package then that will determine, to a large extent, the selling price. Financial agencies will loan only to the appraised value of the property.

            With owner-owned solar we have a large amount of data. And, overall, solar increases the value of the home more than it costs to install solar.

            Why would something similar not happen in a “free market” for leased solar? House A is identical to House B, except House A has a $300/month electricity bill and House B has no electricity bill. For House A your monthly expenses will be $300 more. That’s a new car.

            Now there may be some initial reluctance among buyers to purchase a house with leased solar, but anything unfamiliar can cause people to be reluctant.

          • Patrick Lawson

            http://www.appraisalinstitute.org/residential-solar-photovoltaic-leases-market-value-dilemma-/

            “She”, Sandra Adomatis, has done more for the solar industry than most people recognize. It’s not as if she is arguing against the value, but you can’t simply make a 180 degree turn in appraisal methodology because it’s convenient for the solar industry.

            There are compelling arguments for the added value of pre-paid leases and while I personally have not seen value given in home appraisals I expect it to become the norm. Fixed monthly leases are a different story because you can simply stop making the lease payments.

            In the free market a buyer who wants to pay a premium for a house is free to do so. However, if they want a loan they need an appraisal and someone else s property (leased solar) is not sufficient collateral.

          • Bob_Wallace

            Sorry, the appraiser in the Bloomberg article was named Christopher (IIRC).

            Until there is data what we have is speculation.

            And if an appraiser is down-pricing due to the presence of a solar lease then they will create that data rather than have it determined by actual market value.

          • Patrick Lawson

            I don’t recall a Christopher in the June 24th article,

            ‘Rooftop Solar Leases Scaring Buyers When Homeowners Sell.’ However, it’s kind of a moot point.

            As a lender I would challenge any appraiser trying to take value from a home because the solar is leased and I’m confident I would win that argument. However, if value was an issue (short appraisal on a purchase transaction) there’s no way I could win an argument that leased solar, and I’m speaking directly to the monthly lease, should add to the homes appraised value.

            If you think the methodology used by appraisers when valuing leased solar is flawed I’d encourage you to reach to appraisers in your market who have experience valuing solar PV.

            There was a time when I argued for the positive valuation of leased solar…and then I started talking with appraisers. Here in Arizona there are only 4 appraisers that have multiple credentials when it comes to the valuation of solar PV, so it’s didn’t take long for me to receive my education regarding the valuation of leased solar.

      • ronwint

        Here’s just a small sampling:

        A Homeowner: “We signed a solar lease with xxxxx xxxx. Wish we had done more research (Even though we did do some). Even though it’s 0 down and low monthly payments, we didn’t realize that our payments will be going up every year. At the end of our lease our payments will be over $300, A MONTH. We hardly ever paid over $300 a month with SCE. Only once or twice a year in the summer. Also, we have been contemplating the possibility of Short selling our house, and are seeing that these solar panels are going to be a HUGE hinderance in doing this. Even if we wanted to do a regular sale, with the housing market prices the way they were, if we could get what we owe on the house, we would have to add another $50,000 to the sale price because of the solar panels. Bottom line….if you can’t afford to pay for them or finance them, DON’T LEASE! We are really sorry we did.”

        A Homeowner: “We are trying to sell our home with a solar lease that just started a few months ago. We didnt plan on moving so soon, but the sequester changed that so it is what it is. Here is the issue. It has been a nightmare trying to sell our home with the lease attached to it. We lost one sale after the home inspection due to the buyers deciding they didnt like the lease. Plus we are having issues getting people in to the home once they find out about our lease. The funny thing is that the panels work great and we even put together a print out proving that our system saves a lot of money. People seem to be scared of the lease being 20 years long and they cant look past that. If anyone has any ideas I would appreciate them. Also, take my advice in that selling a home with a solar lease is not at all easy and makes an already stressful process even worse.”

        A Real Estate Professional: “The curse ! I tried to sell one in the Desert and even though it was only about $150 / month, no Buyer would touch it. That property ended up going to Foreclosure! Good luck !”

        A Homeowner: “We are leasing a $26,000 solar system, and in order to qualify to take over the lease the buyer must have a 700 credit score or above. So if we ever sell the house we would have to wrap the remainder of the lease of the solar system into the cost of the house. Depending on how long we are in the house that would bump the price of the house up significantly.”

        A Homeowner: “I was recently involved in a potential sale that failed due to two year old xxxxxx xxxxx lease. Solar leases are still quite new and many of the folks than have taken them have not yet tried to sell their homes. Mr. xxxxxx glossed over the detail that will cause a potential sale to grind to a screeching halt like what if the buyer doesn’t have a 680 credit score? What if the buyer doesn’t want the system? How much does it cost to actually move the system/ Is it worth it? When the lease is terminated, will xxxxxx xxxxx remove all mechanical attachment points/flashings/penetrations and repair the roof to as new condition with the same warranty the rest of the roof carries or will they simply abandon the old racking in place and take the high value solar panels?”

        A Real Estate Professional: “I too have recently been in a transaction where a solar lease is involved. The property is selling for well above $2,000,000 and the buyer did NOT want to take over the solar lease–thinking it was a very bad investment and he would have much preferred to have bought solar equipment outight. It took a lot of negotiating to bring the buyer and seller together on this issue so I agree that many of the people with the leases have not yet experienced what prospecttive buyers will think about it. It will remain an item to be negotiated. Also, I think it is a poor idea to put the panels on the front of the house–which some people have done. It does not look good for the indiviual house or for the neighborhood.”

        A Real Estate Professional: “If you are considering leasing a solar system, please read this first. I have actually come across this in my business. Not only problem with buyers qualifying but shying away from these homes because they don’t understand the lease. There can be issues to a solar lease if a homeowner decides to sell their home.”

        Look for more and more of these type of comments to flood the Internet as more homeowners attempt to sell their homes with solar leases and PPAs attached to them.

    • JimBouton

      Why would you think that? I have a PPA with SolarCity and I am targeting that I will fully recoup all of my investment in under 6 years. The next 14 years after that will be free energy. (I paid upfront, but the math works even if you spread the payments over 20 years.)

      I don’t think you have any basis to make the statement. I feel sorry for the people that decided to wait (and wait) for solar while “giving” that money to the utilities. I’m guessing you are one of those guys?

      • ronwint

        No, I’m not one of those guy’s. Solar is a great investment as long as you’re not foolish enough to sign a lease contract. Even a pre-paid lease contract.

        With current purchase pricing at less than $2.25 per watt after the tax credit alone, it’s now far less costly to own than it is to lease.

        My purchased system paid itself off in in 4 years 8 mos. Now 100% of the power that my system produces is free for the remaining 20 to 25 year life expectancy of my system and I own as asset that I can sell and use the proceeds to upgrade to the latest technology any time I wish.

        You, on the other hand, don’t own anything. You’re only renting their system, which means that in order to fully benefit from all the pre-paid money that you gave the leasing company, you’re stuck with it for the full term of your lease.

        You can’t upgrade it or sell it because it doesn’t belong to you. Imagine what your home will look like 13 years from now with that same aging technology on your roof ? Talk about a lack of curb appeal.

        And good luck ever selling your home with a used system attached to it. What potential home buyer will want to buy your home with a used system, when they can buy a brand new system and keep the 30% federal tax credit and any applicable cash rebate for thousands less than what your home will have to sell for in order for you to recoup your repaid lease “investment”.

        A solar lease is not an investment, It’s nothing but a liability.

        • JimBouton

          I can tell you are not a finance major.

          First, a PPA is not a lease. I don’t own the equipment. I only own the power that the equipment produces. That part, I am guaranteed over the 20 year period.

          I like that arrangement better than purchasing for a few reasons. The first was cost. It was a lot less to just “buy” the power rather than the equipment. Anything happens with your equipment, well that is your problem. Anything happens with my equipment, well that is SolarCity’s problem.

          I do agree that signing a “lease” for the equipment might create a problem if you decide to move halfway through your lease, and now you need to convince a new buyer to accept the lease payments. (But, now is where I am pretty sure you flunked Finance.) The same issue exists for you. The difference is that you plunked down all of your money up front, whereas the guy that leased might have invested that money and can now just give the new owner enough cash to pay for the remaining lease payments. Time value of money probably wins out.

          I think I have a much stronger argument of a PPA (and paying it upfront) versus what you did, which is buy it.

          First, I can tell the new owner exactly how much energy it will produce (guaranteed) or SolarCity will send him cash back.

          Second, if the owner says he does not want to deal with replacing panels or inverters, dealing with the wiring, or any maintenance, then you are stuck trying to convince him of the value. For my PPA, SolarCity is on the hook to make it all work, not me.

          Third, when my PPA is done, then they remove the equipment free of charge (or offer a buyout.) In either case, I can have it removed once it is old enough. You on the other hand will need to pay someone to replace it.

          Lastly, you can’t see my panels from the “curb.” They are in the alley and the last thing I would care about is curb appeal on the roof of my two story house. Nevertheless, I think the panels I have look fantastic. Again, in my case, I can tell the new owner that they will eventually be removed.

          Last point, I paid $9,800 for a system that is 8.33 kw. I am guaranteed that it will produce 11,641 kwh per year (or they pay me $.04 a kwh that they come up short.) Let’s compare your pricing and electricity now. I’m waiting.

    • hdfreak

      Moving to CA soon.. did a rental house search based on the keyword “solar.” Results were: 0. It was my top priority for search criteria and I would have rented one based on that, if I could have found one. Just a matter of time before that search criteria becomes as common as “washer/dryer hookups” and becomes a selling point.

  • JamesWimberley

    Are these large companies succeeding in driving down costs? And a separate question: do they tell the truth about their costs, to retail customers or government statisticians? In Germany, with many small installers selling systems for cash to householders (if they borrow they do it themselves from the bank), there’s little reason for anybody to inflate the costs returned to BSW or the Netzagentur. Not so in the USA, with incentives tied to investment.

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