- SolarCity has opened an operations center in Albuquerque, making New Mexico the sixteenth state where the leading U.S. residential rooftop installer is active.
- The new SolarCity office will initially employ 30 to 50 locals in sales, installation, and administration. It will market to Public Service of New Mexico customers in Albuquerque, Santa Fe, and Las Cruces.
SolarCity, whose Board Chair is Tesla Motors and SpaceX CEO Elon Musk, pioneered the third party owned (TPO) solar financing model, along with Sunrun. TPO, which accounts for over half the installations in states where it is allowed, allows roof owners to host solar systems paid for by third party funds. The host gets discounted electricity and the third party gets financial benefits.
In Q1 2014, TPO residential PV accounted for over 50% of the rooftop installations in New York, 69% to 81% in California, Arizona and Colorado, and over 90% in New Jersey, according to the Solar Energy Industries Association.
There are two basic business models for third-party financing that industry leaders like SolarCity, SunRun, SunPower, Sungevity, and SunEdison use. In one, the customer leases the system from the owning fund and pays for the electricity. In the other, the customer signs a power purchase agreement and gets a designated amount of electricity at a pre-established rate.
In either model, the owning fund gets revenue, the benefits of the 30% federal investment tax credit, and the deductible accelerated depreciation of the system.
Because the installed cost of solar has dropped so sharply, TPO in states like Arizona and California has declined in the last one year to two years in favor of purchases. In response, SolarCity has begun a loan program for would-be solar buyers.