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Published on August 6th, 2014 | by Zachary Shahan


SolarCity CEO Frames SolarCity Offering As “Free Solar Panels”

August 6th, 2014 by  

Originally published on Solar Love.

free solar panels solarcity fox business

SolarCity, of which cleantech hero Elon Musk is Chairman and his cousin Lyndon Rive is CEO and co-founder, currently dominates residential solar power installations in the US. Honestly, SolarCity is offering the same thing as several other companies, but SolarCity seems to really nail the messaging.

In the Fox Business video below, the host tries to find out “the cost” of going solar. Lyndon Rive is excellent at pointing out repeatedly, that there’s no “cost” to doing that. SolarCity will put solar panels on your roof for $0, then it just sells you the energy produced by those solar panels. These are free solar panels, in other words, but not free energy. The good news is that these free solar panels will typically cost the homeowner or business about 10–15% less than what the homeowner or business would pay for electricity from the grid.

There’s nothing new here. This has been going on for years. But the host seems genuinely surprised. And the framing of this as free solar panels rather than solar leasing, which is what it is often called, is quite clever. I’m actually surprised now that we don’t see ads for “Free Solar Panels” all over the place. We do see “$0 down” a lot. But I don’t recall seeing “free solar panels” anywhere.

Anyhow, here’s the video, followed by some more bullet points on interesting statements from the video:

Here are some of the other interesting points from the video:

  • 26% of residential solar panel installations in the US were done by SolarCity in 2013 (3 times more than by #2 Vivint Solar and 4.5 times more than #3 Verengo Solar) — well, the video just said that 1 out of every 4 residential solar panel installations are done by SolarCity, and it flashed a line on the screen that said it now accounts for 29% of residential installations, but I figured I’d add a little more context and detail.
  • SolarCity’s decision to buy Silevo, a high-efficiency solar panel startup, didn’t have anything to do with the tariffs on Chinese solar panels, but it did speed up the acquisition a bit. The reason for the acquisition was that vertical integration will bring down solar power costs.
  • SolarCity still intends to buy solar panels from Chinese solar panel companies like Yingli Solar and Trina Solar.
  • Charlie Munger, a Republican who is Vice-Chairman of Berkshire Hathaway Corporation, reportedly once said to Fox Business, “If we don’t harness the wind, the sun, and water, we’re just stupid.”

Good interview with SolarCity CEO Lyndon Rive. Surprising that it was on Fox Business!

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About the Author

Zach is tryin' to help society help itself (and other species) with the power of the word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as a solar energy, electric car, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don't jump to conclusions.

  • GCO

    Free house!

    Zero down! Just sign here! Yeah, it’s actually a rental with a 20-year lease. Just 240 monthly payments. No worry, you can exit this arrangement at anytime, by simply buying the property.

    Is advertising rentals as “free anything” acceptable to you? Not to me.

    Hey, want a free car too?

    Nothing against SC, except their disgusting marketing tactics. And apparently you’ve been contaminated too.

    50% savings is what I’m getting, really, plus the system is mine to keep.
    Ah yes, none of what I pay has gone, nor will ever go, to a necessarily for-profit leasing company. That’s the difference.

    People signing up with SC sadly don’t realize how much better they’d be served elsewhere.

  • jeffhre

    The Solar City Lawyers must have been very, very tired, after exiting the meeting where the CEO approved the “free solar panel” approach for a major network.

    OK – I’m going to edit my original thinking. Free solar panels – that could describe a PPA…

  • GCO

    Advertising “free” for something they not only retain ownership and control of, but charge for usage, is dishonest IMHO. Are taxis “free cars”?

    It’s more, trick people into granting the company a 20-year lease of their roof in exchange for an often very modest rebate on their utilities.

    “10~15% off electricity bills”? Pathetic. No wonder SC makes money.
    Hopefully most people will realize that they can do much better (e.g. 50%) with any other PV installer.

  • Mike

    “Free Solar” is a slogan that has been thrown around a lot in New Jersey for the last 2 years.

    Most advertisements, however, have been fliers, billboards, and direct mailing. As far as I know, this is the first time “Free Solar” has been advertised on a major network.

  • Vensonata

    We could say you give them your rooftop for free, they could be making 40% profit on the kwh cost ….but hey the grid companies can’t compete so more power to solar city.

  • oic

    It took a b it of time to understand what is solar city because they don’t explain it very well on their website or youtube page. Its actually a distributed non-centralized utility company. Generally most utility companies out there, be in coal, nuclear, wind or solar companies, they build a massive utility plant in ONE spot, which require investment capital provided by the company. Solarcity does the same thing but not at one spot but on top of ppl’s houses, which is why panel’s are free. I ts actually a smart business plan. I’ve always hated solar energy because of the inital cost. $10k+ installation – not worth it. Solarcity have taken the risk from me

    • GCO

      SC also took a good chunk of the benefits from you though…

      While leasing may make complete sense in your situation, most folks will get much better ROI with a system they own, purchased outright or financed via green loans, etc.

      Get multiple quotes and do the math, people.

      • Offgridman

        While Solar City may not be passing on all of the benefits it is their money getting the panels on roofs and getting a lot of people that can’t afford to to go solar.
        It certainly beats the offer from the utility in Arizona that wants your roof for 25 years with only a twenty dollar per month credit. In ten or twenty years that is going to seem like chump change compared to the actual electric bills.

        • jeffhre

          LOL, I read that it was about $30 a month 🙂 And though certainly not draconian like Arizona Power, Solar City does have an escalation for inflation in their contracts.

          • Offgridman

            I’ll admit that the dollar amount could be the thirty and not twenty, the egregious part is the fixed amount for twenty five years. Even if only a few hundred people fall for it the utility ends up with the equivalent of a small to mid sized solar farm with no initial property costs, no property taxes and no transmission loss or line maintenance costs because they have a captive consumer right underneath the panels.
            And how much easier is it going to be to sell a home locked into that type of ripoff agreement than to sell one with leased panels. At least at the end of the lease you can own the panels with their slightly diminished output.
            As Bell Labs and the space program have shown we have no idea how long silicon will continue to put out power, even after seventy five years of continuous production by some of the earliest panels.

          • Bob_Wallace

            ” s eventy five years of continuous production by some of the earliest panels.”

            Link please? Forty years is the oldest in operation with which I’m familiar.

            (And did you type directly into a reply box or from email/something else? I’m wondering about the spaces I’m seeing in posts such as the one in “s eventy”.)

          • Offgridman

            When replying I hit the link in the email and open a reply box, as trying to do it directly from the email causes me problems to. At times when writing have run into problems also, more often for myself is words running all together rather than extra spaces. Clearing the cache and cookies and reopening the browser has always resolved it.
            Sorry but I don’t have a direct link for the panel life quote and I could be off a few years in either direction. Ten or fifteen years ago on one of the PBS science shows (Discovery? Nova?) they told about Bell Labs bringing back some of the original panels used in the rural telephone power tests from late thirties or maybe it was the late forties. They hooked it back up to a load and monitored with test equipment and at the time of the show was still putting out 2/3’s or 3/4’s of original output. With the point of the show being that the improvements to panels since that time should mean even better performance for the newer panels over the long term. I would imagine that it is now being monitored by AT&T at this point since they took over so many of the original Bell test facilities.
            The forty year number you mentioned would be for the panels made and used for the space program but I understand that they have been surprised by the continuing operation of those also especially in the long term satellite and probe programs. Saw a couple months ago where an open source project was going to reuse one of the old satellites for checking out a comet (?) with the cooperation of NASA because the panels were still putting out enough power to run the ion drive and computers even though the batteries were about kaput.

          • Bob_Wallace

            Forty year old continuously operating solar array at University of Oldenburg.

            Removed and individually tested at age 35. 3,88% total loss. 0.1% per year loss.
            That’s the oldest system I’ve been able to locate. Cells for the space program were manufactured in the 1950s but I doubt if any survive. And they would have been mounted in a high UV area which would cause more rapid degrading.

          • Offgridman

            Well the ones on the Voyager satellites were shown to still be functioning in the past couple of years but they aren’t in high UV areas as they head out of the solar system.
            Perhaps it is a quote that shouldn’t have been used without a more valid source. But something that I get wondering about is the panel farms being built in the past ten years as to what will happen to them in 50-75 years. They most likely will still be producing 80-90% or higher of original capacity. So at that point will the newer panels be enough more efficient to make the removal and replacement economically viable. Or will it just be better to build new farms of the new panels and keep using the old too?
            The utilities try to pretend that a solar farm will only be viable for 20-30 years like the old fossil fuel power plants, but from everything else that I have seen this just won’t hold true. It is another facet of the disruption of traditional grid supply. So it will be interesting to see how this works out as time goes by.

          • Bob_Wallace

            Copying –

            The National Renewable Energy Laboratory (NREL) performed a meta-analysis of studies that examined the long term degradation rates of various PV panels. They found that the 1% per year rule was somewhat pessimistic for panels made prior to the year 2000, and today’s panels, with better technology and improved manufacturing techniques, have even more stamina than their predecessors. For monocrystalline silicon, the most commonly used panel for commercial and residential PV, the degradation rate is less than 0.5% for panels made before 2000, and less than 0.4% for panels made after 2000. That means that a panel manufactured today should produce 92% of its original power after 20 years, quite a bit higher than the 80% estimated by the 1% rule.

            Crystalline silicon modules located in extreme climates showed high degradation rates. For very cold climates, panels subjected to heavy wind and snow loads suffered the most. On the other hand, panels in similar climates that were installed in a facade, eliminating the snow load, had very low rates of degradation. At the other extreme, panels in desert climates exhibited large decreases in production over time – close to 1% per year – mainly due to high levels of UV exposure. Panels in more moderate climates such as the northern United States had degradation rates as low as 0.2% per year. Those panels could retain 96% of their production capabilities after 20 years.

            Degradation rates are used in solar site assessments in order to estimate the energy production over the life of a system and to calculate the payback period and return on investment. Like everything in engineering, we always assume the worst and hope for the best, so overestimating the degradation rate isn’t necessarily a bad thing. On the other hand, we want realistic estimates so we don’t scare away potential customers who think they’ll need to replace their modules after 25 years. Given the results of NREL’s analysis, it may be beneficial to adjust the rule of thumb so it accounts for the conditions under which the panels will operate.


            So 50 year old solar farms built in the last ten years or so should be outputting at least 80% of new. Perhaps above 90%, depending on location.

            It might be necessary to replace inverters every 20 years or so. And other maintenance will likely be needed. There may even be some individual panel failures along the way. But, overall, I see no need to be talking about “20 years and replace”. The data simply does not support that.

          • Offgridman

            Once again you have taken what I was thinking and expressed it more clearly with the necessary references that I was remembering but don’t have the exact links handy. Thank you again!
            I look forward to seeing what happens to the market of electricity sales when there has been enough build out to take care of a serious percentage of requirement and those farms have been operating long enough to have covered all the ROI’s.
            That will be some serious disruption and access to free power assumed to come as a part of being a citizen of the world.
            I know just a daydream for now, but wouldn’t it be great.

          • Bob_Wallace

            I don’t know about the world, but here in the US I’m not sure we’ll see much obvious change.

            We’ve been deluding ourselves about the cost of electricity. We’ve poured trillions into artificially lowering the cost of coal and nuclear, using taxpayer subsidies and allowing taxpayers to cover external costs in order to “believe” that it costs only a few pennies to generate electricity with the old technologies.

            Now we seem to be moving into a new reality in which we’ll get most of our electricity from non-subsidized, very low external cost wind and solar. The pennies per kWh will likely look similar to the old pennies. The money we were paying via subsidies and external costs will sort of fade away with those moneys being spent on other things. Health insurance premiums will likely rise slower, but we won’t realize why.

      • Allister

        Totally agree. It is not exactly free as the home owner allows SC to place the panels on their roof and then sells them the energy. They also fail to mention the revenue they (SC) collect from the SRECS plus the federal tax credit. So, it is pretty much not “free” for the home owner

        • Bob_Wallace

          They aren’t taking the tax credit away from the home owner. It goes to whomever purchases and installs the panels.

          Owning is likely better financially for the homeowner, but let’s not demonize the leasing companies. They’re getting panels of roofs, cutting CO2 emissions, and saving home owners some money.

      • Matthew

        Some people would rather be slaves all their life than understand how they can get ahead.

      • oic

        solar city have a 20 year contract. What happens if you leave the house? Does the contract move with you to new place? I don’t view it as a negative if the contract moves with me since I have to pay to use my electricity anyway. Its like paying for broadband connection but a cheaper rate than competitor. Am I missing something?

        • Bob_Wallace

          From Solar City’s FAQs…

          We understand that many customers don’t expect to live in their homes for 20 years. That’s ok! Solar is a huge plus when it’s time to sell. Berkeley Labs found homes with solar command more at resale than homes without.*
          Most customers simply transfer their solar agreement to the home’s new owner. You can also buy out the system ahead of time and include the cost in your home’s sale price.

          *Lawrence Berkeley National Laboratory, April 2011, “An Analysis of the Effects of Residential Photovoltaic Energy Systems on Home Sales Prices in California.”

  • Adam Devereaux

    SolarCity has said it’s about capacity as well as he alluded to. I don’t know that vertical integration always proves cost effective but they certainly may be able to guarantee access to panels at the volume they want IF they can deliver on production.

    • Yeah, that’s what I heard before. Probably just got skipped over here.

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