0 May 18th, 2010. by: Barak Vaughn
Most consumers know that to install rooftop solar electric panels can be very expensive, even if you factor in the 30% federal tax credit and local utility rebates. For a growing segment of photovoltaic customers, leasing, rather than purchasing, is a better option because it allows the customers to pay for solar power at a monthly rate that is similar to–and cheaper–than their usual electricity bill. If the consumer were to pay the entire upfront cost for the entire system, they would be paying for approximately two decades’ worth of power.
Sungevity, based in Oakland, is growing its reach from Northern California down to Southern California, and growing its practice of leasing, rather than selling, roof-top solar panels. The key difference between Sungevity and solar companies that require you to buy the entire system is that Sungevity offers a “no-money-down” streamlined system that uses the internet to control costs. Instead of requiring costly site visits and constant in-person meetings, Sungevity employs an Internet-derived aerial photographs of a home or business to calculate the pitch of the roof and its orientation to the sun to design a solar system virtually, rather than manually.
In addition to its virtual orientation, Sungevity uses the customer’s utility bill to determine the potential utility rebate of going solar, and then emails an installation proposal, or iQuote, within 24 hours of a customer’s request.
“It’s kind of akin to iTunes or Netflix with an electronic signature for the lease contract,” said Sungevity president and founder Danny Kennedy, who has sold 230 solar leases since March, mostly to Southern California Edison and San Diego Gas & Electric customers. Sungevity is now expanding its lease program to customers of the Los Angeles Department of Water and Power.
The leases are financed by U.S. Bancorp, last twenty (20) years, and would be required to be taken over by the next homeowner if the home is sold before the lease is expired. Further, Sungevity automatically increases the cost of the leases 2.5% per year.
After reading the information above, Sungevity seems to have found a great business model for those customers who are environmentally conscious, but may not have been able to afford to be so.
Sungevity and its solar brethren are now bringing solar to the masses, thus allowing their customers to not have to fight the usual blackouts during those hot summer nights.