The residential solar leasing market is exploding. Perhaps no company knows this more than Solar Universe. In August, the company publicly announced that it began offering its “Brite Lease” solar leases. And now, less than two months later, solar leases comprise 40 percent of the company’s business.
The company foresees that the number will increase.
“We expect the leasing to be the financing choice of the majority of our solar customers,” said Katharine Sawchuk, a spokesperson for Solar Universe. “Cash deals will never go away because there are so many benefits from a savings stand point; however, leasing options will be the way to go in the future.”
Solar Universe has joined a growing number of companies to offer solar leases or lease-type arrangements, under which homeowners can have a photovoltaic array installed on their home with little or no upfront costs, use the power from the array to reduce their electric costs, selling excess power back to the grid, and having their system maintained and serviced by a third-party over the duration of the lease.
Other companies that offer such services include SolarCity, Sungevity, One Block off the Grid, and others.
The company’s business model is somewhat unique to the solar industry, however.
For instance, most solar leases have terms ranging from 20 to 25 years. But Solar Universe’s loans, at this point, are for 15-years, according to Sawchuk. At this point, however, the installer and solar franchise can only offer the solar leases in some of its markets.
“Solar Universe is currently leasing in California and Arizona. California is our own leasing product, and Arizona is through a third-party leasing program,” Sawchuk said.
Solar Universe, like other companies in the game, is working with financial institutions interested in developing tax equity funds.
“Each fund will be a certain size, and our plan is to release new funds as we approach the end of the previous fund,” Sawchuk said.
The company already is working on closing its next fund and plans to close it in October.
“Upon closing of that fund, we will issue a press release with details of the size of this tax equity fund and the banks that are sponsoring the new fund,” Sawchuk said. “The plan is to roll the lease out to other states across our network within the next year.”
The company has franchises in Arizona, California, Illinois, Louisiana, New Jersey, Nevada and Pennsylvania, some of which would be ideal candidates for solar lease options. And it’s looking for entrepreneurs to establish franchises in other states like Colorado, Oregon and Texas.
Image courtesy of Solar Universe.