Dive Brief:

• Starting in 2012, more than two-thirds of new residential solar projects in California were installed by third-party owners, according to the Energy Information Administration.
• Among the benefits of third-party leasing, the homeowner avoids upfront costs while the third-party developer can achieve economies of scale unavailable to homeowners.
• Residential solar installations under the California Solar Initiative program have climbed from less than 10 MW a quarter in 2007 to about 55 MW a quarter this year.

(source: Energy Information Administration)

Dive Insight:

“The growing volume of distributed generation, aided in part by the rapid growth of third-party-owned solar PV in some states, is challenging the role that electric utilities have historically played as the sole provider of electricity to customers,” EIA said.

This issue gets at the heart of the so-called utility death spiral: utility's are losing sales to distributed generation. But, California has decoupling, which buffers a utility's revenue from its sales volumes. Also, under a recently passed bill, the California Public Utilities Commission will lower the highest rate tiers, removing a segment of customers that found solar especially appealing.