Get Yer Free Solar: SolarCity Launches Leasing Program


solarcityThe idea of “no down payment” is something you hear in loud car commercials, not the cleantech world. But that’s what startup SolarCity is offering San Francisco homeowners who want to go solar, assuming the political spat at City Hall gives way to the Solar Incentive Rebate Program. “You can go solar and save money from day one,” SolarCity CEO Lyndon Rive told us.

The prospect of solar with no upfront payment — yes, we referred to it as free — is part of SolarCity’s new financing plan, which calls for SolarCity to lease, install and maintain residential solar arrays under 15-year contracts. While that “free” deal requires support from San Francisco’s now-frozen rebate program, even without the city’s backing, SolarLease only requires a $2,000 down payment. That’s much smaller than the cost of buying a system and even less than the $5,000 or so upfront cost installers charge on power purchase agreement installations.

How can SolarCity offer such low installation costs? Rive explains that as a corporate buyer and installer of solar, SolarCity is eligible for tax incentives through the federal investment tax credit (ITC) that individual residences aren’t. This is, however, the same ITC that’s set to expire at the end of this year. “If you’re thinking of going solar you better do it now,” Rive advised. While lease agreements vary, customers’ monthly lease payments should be around the same amount as a “decent” energy bill, Rive said. Oh, and it doesn’t hurt that their financial partner in this endeavor is Morgan Stanley.

SolarCity guarantees a minimum power output and will rebate any shortfalls, while any excess power produced is the customer’s to sell back to the grid. “The return on investment for most customers is anywhere between 15 and 20 percent over a 20-year time period,” Rive told us.

SolarCity claims to have installed more residential solar systems in California than anyone else, and this $2,000 solar (or no down-payment) plan could further solidify SolarCity’s spot as a big player. Last year the company installed 3.5 MW of solar capacity on over 700 homes and created some 200 green-collar jobs, Rive added.

Now Rive tells us that the company is eying an IPO in “maybe in two to three years.” And while he wouldn’t say exactly how many installations the company expects to do in 2008, he did offer this unambiguous tip: “We’re going to do way more than double our installations in the next year.”

At the same time, this isn’t the first time we’ve heard big talk related to solar rental options. Citizenr?, for example, has made promises related to renting solar equipment but has yet to offer a delivery date. “[Our deliver date] is today,” Rive insisted. He estimates that leased panels will be on customers’ roofs within a month. “Maybe in three weeks. We’ve already made some sales; it’s just about getting the permits and getting the panels ready to install.”

The company also expects to double its installation team this year, and has committed to building an academy in San Francisco to train green-collar workers to install their panels. The academy would train 30 employees every two months, and Rive said “They’ll come out as Jedi Knights of [solar] installation.”

SolarCity hopes to expand the SolarLease program into Oregon and Arizona in the next month, he said. The program is an ambitious move that could make solar available to millions more homeowners, but we’ll be convinced when the leased panels start going up in droves. Until then, SolarCity, may the force be with you.


Ron Winton

When you lease a solar system you don’t get the new 30% tax credit or the huge cash rebate or the valuable RECs(renewable energy credits) and all you’d be lucky to save is about $25.00 a month on a typical $250.00 electric bill after going through all the trouble of being locked into a lease for all those years. And after more than 10 to 15 years of lease payments you will own absolutely nothing. You’re far better off to buy a system using traditional financing. Not only will you get all of the financial incentives mentioned above but you’ll also own a system with a 30 to 40 year life expectancy that will put cash into your pocket every month for another 20 to 30 years after you’ve paid the system off. And that’s even considering the replacement of the inverter after 12 to 15 years. Lease a solar system…..I don’t think so ! Buying one makes alot more sense. Why do you think the leasing companies BUY solar systems, take all of the financial incentives for themselves then turn around and lease systems to homeowners.

Pamela R. Mousel

Dear Sirs;
I live in the hi-desert community of Morongo Valley, CA. We have sun shine probably 350 days a year. We really want solar power for our home. We are all handicapped and already receive 2 (the maximum) small breaks in the cost of our electricity every month from So. Cal Edison. Two of us have oxygen producing machines, and we have an electric wheelchair and two electric scooters to charge all the time. We turned our house to all electric several years ago, to get rid of propane. Our bill is still several hundered ($200-$300) per month. We live on Social Security and REALLY need your help getting a free solar hook-up! We’d be willing to split the excess money sold back whatever it takes! We don’t have any “seed” money. PLEASE help us! There are people in Palm Springs ( about 25 miles away) who are using solar and earning like $500/per month!
Anxiously Awaiting Your Response,

Pamela R. Mousel

Rory Gawler

Two questions:

1) These are tied into the grid, yes? I understand that there is a law requiring utilities to purchase power from individual producers, but not to the extent that it constitutes a net payment to the individual… Does the lease-nature of this agreement get around this? Does this company have agreements to allow it to produce surpluses and get paid for it?

2) Wouldn’t such a subsidy be more effective outside of the San Fransisco area, such as in South Bay, where there is more consistent sunlight? I understand that San Fran itself is shrouded in fog for much of the year?

Comments are closed.