Solar leasing popularity on the rise with homeowners but not business owners
The United States’ PV solar market has increased by 70 percent in the last decade, with no slowdown in sight. The first quarter of 2012 was the biggest for solar to date. California, for example, hit nearly 900 MW of solar energy production in June.
Of the 62,000 solar electric systems in operation in the U.S., most are installed on rooftops. Solar has become popular thanks to a generous 30 percent federal tax credit and the availability of net-metering, which reimburses solar owners for any energy their grid-tied solar systems feed back to the grid.
Because of this, solar has become attractive to homeowners and investors alike. Solar PV systems in the U.S. now fall into one of three categories: customer-owned, third-party-owned, and utility-owned.
Customer-owned systems still dominate the landscape since 87 percent of residential systems and 49 percent of commercial systems were customer-owned in 2009. In 2011, commercial systems that were customer-owned increased by 9 percent to a total of 58 percent.
But a lot has changed for solar since 2009. The popularity of third-party ownership is on the rise, particularly in the residential sector where customer-owned systems dropped to 59 percent. Third-party ownership, on the other hand, rose from only 13 percent in 2009 to 41 percent last year.
Homeowners are using the lease option as a way to decrease the perceived risks of installing solar; that is, a solar lease gives them the advantages of a reduced electricity bill without having to make a significant upfront investment or deal with system maintenance.
Conversely, this also means that the companies which hold the solar leases not only receive the tax advantages of owning the solar system, but they also receive the annual revenue generated from the system by way of Solar Renewable Energy Credits (SRECs).
For these reasons, the solar lease model has not become as popular with business owners, who see the value in not only the operation but the ownership of a solar electric system.
Here’s a good graphic from the Solar Electric Power Association showing the increase of third-party ownership over the last several years:
