Imagine if every time you bought a car, you had to buy all the gasoline that would run the car for its lifetime. That’d be an expensive automobile. With an internal combustion engine, say, you get to amortize the total cost of the power produced over the many years that you buy fuel for that engine. It’s almost like a layaway plan for the power. Solar finds itself in an analogous situation. The cost of the energy produced over the 20 years you’ve got the system all comes at the beginning. You are prepaying, essentially, for decades of electricity production when you buy the system. That means only people with substantial cash on hand are likely to put panels on their homes. Who has an extra ten or twenty grand lying around?
And that’s where SunRun gets money from banks — hundreds of millions of dollars — and then uses that money to finance the installation of solar systems on homes. Homeowners pay on a monthly basis, not up front, at rates that are comparable to or cheaper than the grid (SunRun says). We still don’t know how much money SunRun makes on each home, but we do know that the company’s model has exploded. Most new solar is now being installed with the leasing model and other companies like SolarCity and Sungevity are trying to horn in on SunRun’s business (even if SunRun remains the largest solar leasing company).
The takeaway from SunRun is simple, though: sometimes the innovations that matter aren’t technical but financial (or even social). Of course, developing more efficient, less expensive solar cells helps, but the technology development alone cannot guarantee successful market deployments. Whole article can be found here
But why take your money and give it to a company or a bank when there is a better way that cuts out the expense of the middlemen?
Direct investment in solar by everyone. Invest affordable amounts each month with the result of lowering your energy bill. Doing so will have a long term effect on your electric bill.
That is what the Tennessee Solar Energy Association is advocating. That is why we are sponsoring the “Affordable Solar” strategic planning session on December 7th.