Why Lease When You Can Own? Rooftop Solar Facing Tough Question
Its tough to argue with free. Thats why the no-money-down solar lease became the most popular choice for U.S. rooftop power.
Now, though, the equation is changing. Falling costs are making it easier for consumers to buy solar systems outright, and banks and solar installers are promoting loans with no upfront payments. Thats a threat to companies such as SolarCity Corp., Sunrun Inc. and Vivint Solar Inc., which built their businesses on people signing decades-long contracts.
Workers secure solar panels to a rooftop during a SolarCity Corp. residential installation.
Workers secure solar panels to a rooftop during a SolarCity Corp. residential installation. Photographer: Sergio Flores/Bloomberg
Installation growth is slowing for the big three U.S. rooftop solar installers, and GTM Research, an industry consultant, is forecasting the percentage of consumers buying rather than leasing residential systems will expand to 45 percent this year, from 38 percent in 2014. Shares in all three companies have plunged more than 40 percent this year, for a variety of reasons including a failed acquisition bid for Vivint and questions about SolarCitys strategy.
Leasing was the major game but thats changing quickly, said Patrick Jobin, an analyst at Credit Suisse Group AG. Consumers are starting to realize there are better options.
Greg Gill, a retired IBM employee, was looking for ways to cut his $400 monthly utility bill. He considered leasing, but decided in the end to pay $32,370 for a 7.3-kilowatt system that was installed in September at his home outside Sacramento.
Gill charged it on a credit card (to earn rewards) and then paid it off in cash, he said. His April utility bill was $1.18, he earned a $10,000 tax credit and hes expecting an 11 percent return on the investment.
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http://www.bloomberg.com/news/articles/2016-05-24/why-lease-when-you-can-own-the-tough-question-facing-solarcity