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Solar as a service dominated the solar roofs built last year in California

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Three quarters of the solar panels installed on home roofs in 2o12 in California were owned by solar service companies (and not the home owner) and these “third-party owned” solar systems collectively generated $938 million in revenues last year. This means that these new types of solar financing options that have emerged in recent years, where the home owner pays for the solar electricity but doesn’t have to put down lots of money upfront for the solar panels themselves, are actually working and are highly attractive to home owners.

Companies that have developed these types of financing models for solar include SolarCity (s SCTY), Sunrun, Sungevity, Clean Power Finance, and others. These companies commonly raise money from banks and even Google (s GOOG) to put up the initial funds to install the solar panel systems and then the solar customer enters into a contract to buy the solar electricity over time, usually something like two decades. The bank can ultimately get that money back, plus 10 to 12 percent more, because solar systems provide revenue in the form of energy bills.

These companies are also some of the startups that have been founded in the clean energy sector that are actually making substantial money these days. SolarCity held a successful IPO last year, while Sugevity, Clean Power Finance and Sunrun have grown significantly.

While 75 percent of home solar systems built last year were owned by third parties, just over half, or 56 percent, were owned by third parties in 2011. The top cities with these third party owned solar systems in California include San Diego, San Jose, Bakersfield, Los Angeles, Fresno, San Francisco, Corona, Murrieta, Clovis and Temecula.

3 Responses to “Solar as a service dominated the solar roofs built last year in California”

  1. Hayesh Patoliya

    This kind of plan is already adopted by Gujarat State government in India Last year, and they created Asia’s biggest solar park and it is completed and now they are trying to put solar panels on roof in villages, municipal corporation and on river bank,,,

  2. Dhanur Grandhi

    Katie, you have clearly used data/information from 2 different sources (that published based on their analysis this week) .. to say NOTHING new, and have not bothered quoting either source.