SolarCity launches new rooftop loan product to replace MyPower offering
- SolarCity, the leading U.S. rooftop solar installer, announced a new solar loan program Thursday that will allow customers to own their rooftop panels rather than lease them from the installer.
- The new solar loans will replace the MyPower offering, abandoned earlier this year, and includes 10- and 20-year financing options, along with a warranty and Nest programmable thermostat.
- The loans will be made through third party lenders, allowing the company to bypass state prohibitions against third party ownership (TPO) financing and enabling customers to bank the 30% investment tax credit. Depending on loan terms and local electricity rates, consumers may also get immediate bill savings.
From late 2014 through early 2016, SolarCity made over 21,000 loans through its MyPower program, which offered a 30-year, 4.9% loan to customers seeking to own a rooftop solar system.
That offering was abandoned in February as the company announced it was planning a new program. Vice President of Financial Products Tim Newell says the new loans are not due to the failure of the MyPower offering, but customer demand for shorter term loans and fixed payments.
The new program includes a 10-year, 2.99% loan, and a 20-year, 4.99% offering. Customers will have access to a 20-year warranty on their systems. Depending on local electricity rates and solar generation, the company said many consumers could "immediately pay less for solar each month than they previously paid for utility bills and pocket thousands in additional dollars from applicable tax credits."
The new loan program is available in 14 states: Arizona, California, Colorado, Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Mexico, New York, New Jersey, Oregon, Rhode Island, and Washington, D.C.
While all those states allow third-party financing of rooftop solar systems, the new loans could also expand the company’s ability to offer solar with no money down in the four states that prohibit TPO — North Carolina, Florida, Kentucky and Oklahoma. New states will soon be added to the loan offering list, Newell said.
Before its loan offerings, SolarCity was one of the leading innovators in the TPO leasing model of solar installation, which allowed the sector to grow quickly by eliminating the barrier of high upfront costs. Last year, GTM Research analysts told Utility Dive that market peaked in 2014, when TPO accounted for 72% of residential solar installations, and that the industry will continue its shift toward loan and consumer ownership models.
Follow Gavin Bade on Twitter