A consortium of solar energy companies and financial firms have created a new U.S. solar lease facility, which will provide funding for up to $300 million worth of projects.
Clear Power Finance, MS Solar Solutions (a wholly-owned subsidiary of Morgan Stanley) and Main Street Power, a North American solar developer, are behind the solar lease facility.
Buying photovoltaic cells outright is beyond many homeowners means, but solar leasing offers a way round this, and is becoming increasingly popular. PV Solar Report, for instance, recently said that of the consumers in California who go solar, 70 percent now do so without buying the solar panels.
Depending on where a customer lives, the program entails either a solar lease, which means the consumer pays a fixed amount monthly regardless of how much power the system produces, or a power purchase agreement, in which the customer is billed for the amount of power his system generates and nothing more. The solar company owns all the equipment, and the leases generally span 20 years.
“The MySolar lease gives Clean Power Finance’s qualified network of solar professionals another affordable option to help homeowners immediately save money on their electricity bills,” Nat Kreamer, CEO of Clean Power Finance, said in a statement. “We are pleased that our marketplace and asset management and underwriting services make residential solar an attractive investment to major financial institutions.”
The burgeoning market for solar leasing has led to a number of companies emerging in recent years, including SunRun, Sungevity and SolarCity. SunRun pioneered the practice in 2007 and still leads the market, claiming to have installed $1 million worth of these systems each day since January of last year.
SunRun said last fall that its data shows leasing is helping make solar more accessible to middle-income homeowners, and a recent study by the U.S. National Renewable Energy Laboratory (NREL) seems to back up the claim. NREL analysts discovered that homeowners in less affluent neighborhoods are cashing in on solar leases. In Southern California the take up has been particularly high. The study reported that those investing outright in solar systems in the area had an average household income of $150,000 or more, while those signing up for solar leases had an average income of $100,000 and up.
MySolar is the third solar finance facility available to Clean Power Finance’s national network of solar professionals. Clean Power Finance is an e-business offering an online marketplace for residential solar financing and solar sales software.
“The MySolar program will be the largest residential solar investment facility in the nation and can help save consumers millions of dollars in electricity payments, create thousands of solar jobs and further the easy adoption of solar for thousands of homeowners around the country,” Jonathan W. Postal, senior vice president of Main Street Power, said in a statement.