Dive Brief:
- SolarCity is “migrating” away from its MyPower solar loan, designed to have the no-down-payment advantage of a power purchase agreement (PPA) or lease but allow customers to own solar. A restructured product to finance would-be solar owners is coming, according to VP Jonathan Bass.
- When MyPower was launched in 2015, CEO Lyndon Rive said loans would pay for half SolarCity’s installations by the end of 2015, but the company ended the year with loans covering 13% of installs. The loan’s 30 year term was an obstacle to its success and new products will run ten or 20 years, he said.
- The biggest shortcoming of MyPower was customers’ inability to qualify for the 30% federal investment tax credit (ITC) vital to solar's value proposition, according to Rive. For customers who did qualify, the loan contract’s 2.9% annual escalator, tied to system kWh output, also made it unappealing.
Dive Insight:
SolarCity found its loan product was difficult to sell, Rive said. To alleviate that, the new loan will not be structured to be similar to a PPA.
SolarCity’s product was not included in the EnergySage online marketplace for solar customers because it was not “a typical solar loan,” a company executive told Greentech Media. Pick My Solar, another online solar marketplace, found the cost of MyPower higher than other ownership options.
Residential solar loans are either secured or unsecured. A secured solar loan is typically secured by the home. There are three types: (1) Home Equity Loan/Home Equity Line of Credit, (2) Federal Housing Administration (FHA) Title I or PowerSaverLoan, (3) Property-Assessed Clean Energy (PACE) Loan.
Much of the market has moved away from secured loans. Most newer solar loans are technically unsecured, though some, including MyPower, are secured to the solar hardware itself.
