Residential Solar with No Upfront investment
The public and private sectors are cooperating in Phoenix, Arizona on a program called Solar Phoenix to install solar panels on 1,000 homes over the duration of the program. The solar panels will be leased to homeowners under a partnership between SolarCity Corp., National Bank of Arizona, the Phoenix Industrial Development Authority and APS.
The program works like this:
* homeowners who want solar panels on their homes should first contact SolarCity Corp.
* Applicants will be evaluated on their credit worthiness, not their incomes
* Qualified applicants will have systems installed on their homes with no upfront costs. They will pay a monthly lease based on the size of the system installed.
* Homeowners will use power from their panels during the day and will get power from the local power company APS at night and when they are using more energy than the panels generate.
* SolarCity Corp will guarantee the panels annual energy production for the 15 year lease.
The barrier to entry for solar for most homeowners is the significant upfront investment required. This leasing program removes that hurdle by financing the solar panels purchase over the 15 year lease period. SolarCity will only guarantee the amount of power the panels generate but they say that customers new utility bills plus lease payments should add up to 10% – 15% less than their old utility bills.
The program is being financed by a $25 million investment by National Bank of Arizona and a $250,000 investment from the Phoenix Industrial Investment Authority. The banks investment will go to purchasing the solar systems and then leasing them back to customers while the money from the Phoenix Industrial Investment Authority is to protect the bank from people who default on their leases.
This public – private partnership could be the wave of the future for solar power in the U.S. By removing the upfront cost barrier for homeowners, such a program makes solar affordable for almost any credit worthy customer. We’ll try to follow this program to see how quickly they locate 1,000 suitable customers to install the panels.
