Sungevity Eschews Solar Lease as Loans Become More Common

Sungevity Inc., a closely held U.S. developer of rooftop power systems, expects consumers to shift away from the leasing model that’s made homes the fastest-growing solar market.

Chief Executive Officer Andrew Birch said the company won’t offer leases in Vermont and New Mexico, its two newest markets.  The Oakland, California-based company now operates in 11 states and the District of Columbia, according to a statement today.

Banks are now offering loans for residential solar projects.  That’s making buying a system more competitive with leasing one, and Birch expects to see more customers opting to own the panels on their roofs.

“We’re seeing the mix creep up for customers actually buying systems outright, either using loans or paying cash,” he said in an interview Thursday.  “What you’re seeing is the standardization and commoditization of financing.”

Admirals Bank offers loans of as much as $40,000 for renewable energy systems and in June announced a partnership with SunPower Corp., a solar-panel manufacturer and rooftop system provider.  SunTrust Banks Inc.’s LightStream unit offers financing for rooftop power at rates that start at 4.99 percent.

With a solar lease, customers pay little to nothing up front and sign decades-long contracts with monthly costs that typically are less than they pay their local utilities. SolarCity Corp. is the biggest provider of solar leases.

Sungevity Eschews Solar Lease as Loans Become More Common