The Rise of the Solar Lease – Among Module Manufacturers: We’ve already seen the “solar lease” around for some time but the market has been dominated by a few key players. Competition may have been stiff in this space but if you didn’t have a solar lease product in certain markets, you couldn’t compete at all. Scores of small solar installers scrambled to find an answer but just couldn’t. I was part of one of those outfits when SolarCity came to our town and in one fell swoop absorbed all of the available rebate funds for the current program. I was awe struck. Never mind the fact that it was the beginning of the end for our little Solar outpost in North Texas, this was a game changer. The past few years have been marked by the “haves” and “have-not’s”. Either you had a lease to offer or you suffered, doing your best to sell against it. Something is happening though. The Solar Lease Pioneers have proven the potential with this business plan and attracted major investment to the tune of hundreds of millions of dollars from companies such as US Bank Corp, Google, Citi, and others. And, as the saying goes, “imitation is the highest form of flattery”.
SunPower just announced their own in-house solar lease. This is unique because SunPower is a manufacturer of solar modules. Not only does this announcement breathe life and hope into all of the little shops out there that earned a spot as a SunPower dealer, it paves the way for a market shift in solar leases. This could spell trouble for the big three Solar Lease Providers (SolarCity, SunRun, Sungevity). As more manufacturers jump on this train the solar lease will be opened to all and it won’t just be a matter of which panel has the best pricing, it will be which lease is providing the best pricing. Module manufacturers will have a new way to move product and increase market share while also increasing revenue. This happens at a critical time in the module manufacturing world and could likely result in a shakeout where manufacturers become the “haves” and “have-not’s”.
The biggest hurdle to wider solar adoption has always been the upfront cost. Banks and lenders didn’t understand the technology and returns enough to bank these projects. Thanks to some diligent and charismatic entrepreneurs, the perception is changing. Companies like SolarCity and SunRun not only cracked the code for making the solar lease work, they were able to sell the concept to major investors at a time when our country was facing a major recession. Perhaps that was WHY they were able sell it so successfully. The sun is a pretty stable investment at a time when life seems anything but.