SolarCity Pulls “MyPower” Loan Product
Despite all of the hype, it seems that SolarCity’s MyPower loan product didn’t turn out to be the game-changer that company execs had wanted it to be, as they’ve apparently now decided to pull the plug on the offering. Yes, that’s right, the MyPower loan product is now no longer available.
Considering that the product was described at launch in October 2014 by CEO Lyndon Rive as being “by far the best product out there,” the fact that the product has now been completely pulled probably isn’t a very good sign for the company.
To provide some background here, the selling point behind the MyPower loan was that it worked similar to the power-purchase-agreements that SolarCity uses for its PPA & lease offerings but also allowed for ownership.
“(SolarCity) was taking the idea of just paying for your electricity usage but also adding what people want: to own their system,” explained Nicole Litvak, senior solar analyst with GTM Research. “It seemed like it would be a simple transition. It turned out to be totally the opposite.”
Greentech Media provides more:
When the product was launched in late 2014, Rive said nearly half the company’s business could be loans by the end of 2015. Instead, the official guidance of 25% could not be met, even from the outset. In first quarter of 2015, MyPower accounted for 15% of total installations, a figure that ended up at 13% for the whole of the year.
The product was a complicated sell. Many prospective SolarCity customers are drawn to a lease because they are interested in the first-year savings compared to their traditional electric bill that a solar PV system can provide, noted Litvak. With MyPower, as with other solar loans, customers had to hand over their federal Investment Tax Credit funds or pay some form of penalty.
It wasn’t the forking over of the tax credit that was the chief problem, however, Rive told GTM. Instead, it was the fact that many of SolarCity’s customers did not qualify for the 30% Investment Tax Credit. “In hindsight, I definitely underestimated that,” he said, adding that SolarCity’s customer base was far from being made up solely by the wealthy homeowners who are often portrayed as typical solar customers. “I underestimated the success we’ve seen, which is fantastic.”
Another apparent issue is the 2.9% escalator. The SolarCity CEO made note of this issue in his interview with GTM, commenting that, “tying the loan repayment to the production of the solar PV system was a mistake, and a feature that would not reappear in future loan products.”
There was also the issue with the payback period being longer — up to 30 years rather than 20.
“Thirty years is just a long time for consumers,” noted Litvak. “Even with being able to transfer to a new homeowner.”
Commenting on the direction forward, the SolarCity CEO noted, when talking about a replacement: “It is just going to be (simpler). We want something that’s as (simple) to sell as a PPA instead of the sales team going to PPA as the default option.”
Notably, here on CleanTechnica and sister site SolarLove (thanks to research done by Pick My Solar), we haven’t been particularly thrilled about the MyPower offer. For more on that (if you somehow missed it), see:
SolarCity MyPower Loan — Payback Fine Print Not Pretty
SolarCity’s MyPower Home Solar Prices Far Above Average
Images by GTM Research
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