Over the past few years third-party ownership (TPO) of homes has grown from a whisper to a roar. Last year in California, where the practice of solar leasing and power-purchase agreements really took off, closing in on three-quarters of the market there. Similarly, residential TPO services are been taking off across the country in states where companies like SolarCity, Sungevity, Clean Power Finance and SunRun are operating.
A new report out this week from PV Solar Report and SunRun, for instance, found that TPO represented 74 percent of California’s residential market in 2012. “Nearly 75 percent of homeowners who went solar in 2012 chose third-party-owned, compared to 56 percent in 2011,” said Stephen Torres, founder and managing director of PV Solar Report.
“The single-year record means that California third-party-owned solar generated about the same amount in 12 months as in the previous five years combined,” the report found. The numbers behind the sales is impressive as well, generating $938 million of revenue for California’s economy last year.
What’s as important is that TPO is opening up access to solar for more residents. “We are seeing the most growth in low and median-income zip codes as companies like Sunrun continue to remove the barriers to access,” Torres said. In fact, a July 2012 assessment from California Solar Initiative found that two-thirds new residential solar installations are now occurring on homes in low and median income neighborhoods.
On a larger scale, TPO is comprising over 50 percent of new capacity in California, Arizona, Colorado and Massachusetts, with the model gaining greater market share in other states such as Connecticut, Delaware, Maryland, New Jersey, New York, Oregon, Texas, Vermont, and Washington, according to a new report from GTM Research’s Vice President of Research Shayle Kann.
The report, “U.S. Residential Solar Financing: The Vendor, Installer and Financier Landscape, 2013-2016,” looks at how the market has changed and will like change going forward. “Prior to 2010, there were few residential third-party ownership (TPO) vendors. SolarCity and Sunrun pioneered the residential third- party financing model, closely followed by Sungevity. SunPower entered not long after, offering residential leases through its enviable dealer network,” according to the report’s executive summary. “Today, we count at least ten major TPO companies operating, and a number of others still getting off the ground.” Each company has a unique offering with different business models and going forward there are likely to remain a number of options that meet residents’ needs in a growing number of states.