Dive Brief:
- SolarCity, the largest rooftop solar installation company in the United States, will begin loaning customers the money to purchase panels outright, rather than the third-party leasing model that is more common.
- CEO Lyndon Rive says he expects up to half of SolarCity's new business by the end of next year could be in solar loans, a sign that the market may be moving away from the lease model that SolarCity helped pioneer.
- SolarCity is making the MyPower loans available to customers in eight states initially, and said it intends to expand that territory.
Dive Insight:
Third-party leasing was a key engine behind the growth of rooftop solar installations, but now the companies that grew along with the clean energy industry are looking to another approach. The largest solar installer in the country will begin offering loans in Arizona, California, Colorado, Connecticut, Hawaii, Massachusetts, New York and New Jersey, allowing customers to own the solar panels outright.
Under SolarCity's new MyPower program, customers can take the loan at a fixed annual percentage rate of 4.5% for 30 years. The company said it expects the program "to expand the addressable market for solar power to areas of the United States that have traditionally seen very little adoption."
The New York Times spoke with SolarCity CEO Lyndon Rive, who explained that the program is different from a typical loan because paying it back will be based on power generated each month rather than the cost of the system. While the total payment amount will stay constant over time, customers can pay off their equipment loans faster if the panels produce more electricity than anticipated.
SolarCity is not the first to experiment with the model. Other companies in the space, including Sungevity, Clean Power Finance and Mosaic, offer similar loans.
