Future of Rooftop Solar: Loan Product Could Transform SolarCity Corp
SolarCity Corp (NASDAQ:SCTY) has struggled to live up to its own expectations for most of the last year and it’s showing in the company’s stock price. The former market darling has lost nearly two-thirds of its value and investors are now wondering what its future looks like. A new loan product launched this quarter could tell us a lot about the future of residential solar and how SolarCity fits in that future.
Saving customers more money -Solar leases, often known by their other name “power purchase agreements”, both terms describing an arrangement where a customer pays for solar energy over the course of 20 years or more, have been the dominant financing method in residential solar over the past five years, but that may be ending. Solar loans, where the customer actually buys solar panels with a loan, provide a lot of benefits that leases can’t.
They don’t like advertising it, but SolarCity and Vivint Solar (NYSE:VSLR) normally charge increasing prices over time, meaning over the course of 20 years the cost of a kWh of energy could nearly double. If electricity prices don’t rise at the same rate or faster the cost of solar could be underwater by the end of the contract. Read More….