Solar panels are attractive to “green minded” consumers and corporate decision makers, because while being eco-friendly, they also work ultimately to reduce or eliminate electric bills. However, the cost to purchase the panels can be quite steep, with up-front costs from $20,000 to $35,000, depending on the size. These high costs have served as a barrier for wide adoption of solar electricity.
A handful of companies are looking to make the purchase of solar panels easier through varied payment plans. One company, SunRun, a start-up based in San Francisco, offers the opportunity for customers to buy the electricity the panels generate through its power purchase agreement (PPA). This type of agreement is commonly used in large corporate renewable energy installations. The arrangement makes the most sense in places where there are high electricity rates and relatively good incentives, like California. The company also benefits from solar rebate incentives, which help finance the contracts.
Another company, SolarCity, based in Foster City, California, is taking a solar lease program approach where customers can purchase a financing option that allows them to get solar panels with an up-front, down payment of about $1,000 to $3,000 and a monthly lease fee, making this option similar to leasing a car.
Yet another company, Citizenre, based in Wilmington, Delaware, offers a less expensive option where the company pays for, installs, owns and operates the solar installation and the homeowner pays a flat, monthly fee. People who work in the solar industry have taken a skeptical view of Citizenre regarding its ability to cost-effectively manufacture solar equipment while training installers and creating a workable rental model for consumers.
Although solar is still a relatively small market and finding installers in a given region can be a challenge for consumers, the trend may be swaying. Wall Street lenders are already participating in financing corporate solar installations through companies like SunEdison and SunPower, which signed a deal with Morgan Stanley. Investment banks are also jumping on the bandwagon, as they are realizing that they can reach consumers by offering options to invest in energy portfolios. As with all technology, in a few years, it is expected that these options will be more diverse and less expensive, offering more opportunities for more of us to utilize solar electricity.
Source: BecauseAction.com
