Third party ownership for solar PV leases and financing picture in the US

From GTM Market Research by Shale Kahn | February 11, 2013

TPO (third party ownership) is the leading business model across USA in selling PV for residential units.  Before 2010 no such business model exist.  Sun Run and Solar City pioneered such type of ownership, followed by Sungevity. 

The Stanford graduates pioneered  Sun Run who said that there are only 3 obstacles to owning solar:  money, money, money.

Now there are 10 TPO companies in USA, the report/research features the companies across the Solar value chain:   lead gen, sales, financing, monitoring, module supply,  and active markets.

The GTM report is downloable

Abroad, in California, can solar companies kill established utilities?

Repost from Energy Manager Today by Linda Hardesty | May 24, 2013

PG & E (Pacific Gas and Electricity ) at Northern California is being threatened by solar companies like SunRun (which leases solar PV) Solar City, Sungevity,  and Verengo.  The Central Utility business model is being threatened by rooftop solar panels

PG & E residential rates is now at 31 cents (about P12.00 at parity with PHL rates) and could reach 54 cents by 2022 (about P20.00) or double the current rates.  LCOE for solar is about  10 to 12 cents over for the next 25 years.  Thus more and more residential customers shift to solar.  40% of the total customers of utilities are residential. 

The utilities could fight net metering or make solar power sold through grid by subtracting these from the net metering.

Utilites are ill equipped or shackled by utility laws which were meant to protect them.  As more people shift to solar, they have no choice but to raise prices on remaining customers which forces more people to shift to solar energy

Is this happening in the PHL?

Mechanics fo leasing solar panels and third party ownership

Repost from Solar Professional by Gave Davis and Ben Peters

It was not technology that transformed solar power in the US but the financing scheme that provided ease of ownership - solar leasing.  The advent of high voltage inverter was the last of the technological innovation but it was leasing that was industry changing event.

The scheme was started by Sunrun, a start up of two business graduates from Stanford, Lynn Jurich and Ed Fenster who saw that the 3 obstacles to solar industry for residential use were:   money, money, money.

Leasing works this way:  the lessor uses his equity, his tax credits to purchase the solar on behalf of the residential owner and lets him use the unit with little or no up front cost.  Under this model, the lessor receives the tax credit and the depreciation.  The lease works on a 20 year plan and lessor has operating and maintenance plan for the lease.  The options at the end of the lease include:  renewal, purchase by the lessee, or removal of the unit.

Monthly payment plan.  The lessee agrees to pay for the electricity generated by the system at the rate equal to or lower than the grid prices.  This type is more beneficial to the lessor in case the utility increases the electricity rates. Typically a 20 year plan too.

Prepaid plan.   The lessor pays for the 65% cost of the lease and does not pay until the end of the lease.  This works well for retirees.

Infographics on Sun Run - Home Solar

Infographic by Sunrun home solar