Growing concern over rising greenhouse emissions and climate change has led many people to feel a drive to develop cleaner, cheaper methods of energy production. Solar energy is one such...
This article was originally posted on www.cleanenergyauthority.com
Written by Amanda H. Miller
The solar leasing model, which is widely believed to have made rooftop solar installations more mainstream and which is frequently credited for the meteoric rise in residential solar installations, could be losing market share.
GTM Research released a report earlier this week announcing that the leasing model is peaking this year.
Currently, about 68 percent of Americans who install rooftop solar panels on their homes or businesses lease them or sign a power purchase agreement with a third-party owner.
Sunrun, a solar leasing company, has issued numerous reports over the years indicating that the model, which doesn’t require much and sometimes any money at all upfront, has opened solar up to the middle class. The middle class, as a result of third-party-owned solar, now dominates the demographics of households that install solar systems.
The percentage of installed rooftop solar arrays that were owned by third parties rocketed up from 42 percent in 2011 to 68 percent three years later. But GTM said this is the peak and the pendulum will swing back toward direct ownership in 2015.
“Solar loans are becoming widely available with many more options to choose from than in the past, and declining systems costs are making direct ownership affordable for more homeowners,” said Nicole Litvak, GTM Research Analyst and the report’s author. “As a result, the share of third-party-owned solar has already begun to come down in leading state markets, including Arizona and Massachusetts.”
Solar leasing companies, such as Sunrun and SolarCity haven’t raised any red flags so far.
Of course, a slowly shrinking market share in a rapidly expanding industry still makes for a growing business.
GTM estimates that, even as third-party-owned solar installations drop back to 63 percent market share in 2015, the solar leasing companies will have to raise more than $26 billion to keep up with still growing demand for systems.
While third-party-owned companies will have plenty of business for years to come with figures like that, many are still working to identify the next steps.
SolarCity announced earlier this month that it purchased a solar panel manufacturer and intends to get into the manufacturing business.