Dive Brief:

• On Tuesday, the market leading U.S. solar installer and financier SolarCity announced a new solar product for small and medium-sized businesses. 
• The 20-year solar lease product will initially be available only in California, where the Property Assessed Clean Energy (PACE) program will allow small and medium-sized businesses to pay for solar panels as part of their property taxes. 
• SolarCity expects to expand to the east coast of the U.S. and other territories in early 2016, according to a press release.

Dive Insight:

With this new product, SolarCity is going after what CEO Lyndon Rive calls a "neglected" part of the rooftop solar market. Most of the action in the U.S. market in recent years has been at the large commercial and residential levels, leaving small and medium-size businesses with an appetite for solar with few options. Now, SolarCity aims to change that with a solar lease product that it estimates could save customers 5-25% on their electricity bills.

While it will only be available in California for now, SolarCity has ambitions to expand the service across the country. Rive said he expects other states to adopt PACE programs, which helps make the product viable for SolarCity in the first place. PACE financing has typically been used for energy efficiency upgrades, but is now available for solar systems in California. If other states allow PACE financing programs for solar, expect SolarCity to roll-out its product to those regions.

In addition to PACE financing, SolarCity is also using in-house installations and new mounting hardware to make the product possible. Instead of subcontracting installations, as is often done in the commercial solar market, SolarCity is looking to cut installation costs by 30% by doing them with their own crews. Meanwhile, the new mounting system will give the panels an east-west orientation instead of the typical southward-facing one, which SolarCity says will allow it to put 20-50% more panels on small commercial customers' rooftops.

Together, the advances in technology, installation and financing could make SolarCity's product the first major success story in the small commercial solar market. GTM Research's Shayle Kann called the new product "meaningful because no one is doing small commercial well."