- Title: USA: Renting rays - California company leases solar power
- Date: 25th December 2009
- Summary: SANTA MONICA, CALIFORNIA (RECENT) (REUTERS) EXTERIORS OF JIM GOALEN'S HOUSE IN SANTA MONICA GOALEN SWITCHING ON A LAMP VARIOUS OF SOLAR PANELS ON GOALEN'S ROOF (SOUNDBITE) (English) SOLARCITY CUSTOMER, JIM GOALEN, SAYING: "Instead of the 30 or 40,000 US dollars that I would spend to put panels on my roof, there was no upfront cost, and that was really attractive to me. So what I found is that A, I could do what I felt was what in my conscience I should do, but B I could do it at a price that was affordable to me." LOS ANGELES, CALIFORNIA (RECENT) (REUTERS) EXTERIOR OF SOLARCITY OFFICES SOLARCITY SIGN VARIOUS OF JIM CAHILL TALKING TO SOLARCITY EMPLOYEE (SOUNDBITE) (English) SOLARCITY REGIONAL OPERATING DIRECTOR, JIM CAHILL, SAYING: "The idea behind the lease was to take away the biggest objection that we had from customers which was this large upfront cost for solar and a long, relatively long payback. So what we did is that we put together a program where we would own the solar system, the customer would get the benefit of the solar system in cancelling their electricity out, we would take the tax credits and the depreciation and the rebate and then the customer, we would structure a lease whereby the customer's monthly payment between the lease and the utility would go down." (SOUNDBITE) (English) SOLARCITY CUSTOMER, JIM GOALEN, SAYING: "Previously to the panels my electricity bill was probably running on average about 270 to 290 us dollars a month, and once I installed the panels I reduced that cost to about 50 dollars a month and with a 100 dollars a month that I pay for the lease on the panels it reduced my costs about 40 percent."
- Embargoed: 9th January 2010 12:00
- Keywords:
- Location: Usa
- Country: USA
- Topics: Science / Technology,Energy
- Reuters ID: LVAD4TDZ4FN2VX0WAKLCX2GA8JP5
- Story Text: Jim Goalen had been considering installing solar panels on the roof of his 3-bedroom house in Santa Monica, California for years. But it's only recently that he took the step, after he found a deal that finally worked for him.
"Instead of the 30 or 40,000 US dollars that I would spend to put panels on my roof, there was no upfront cost, and that was really attractive to me. So what I found is that A, I could do what I felt was what in my conscience I should do, but B I could do it at a price that was affordable to me," says Goalen.
The offer, specifically targeted to the residential market, came from SolarCity, a California-based company. By proposing customers to lease solar panels instead of buying them, SolarCity intends to bring solar energy to the masses.
"The idea behind the lease was to take away the biggest objection that we had from customers which was this large upfront cost for solar and a relatively long payback", Said Solarcity Regional Operating Director, Jim Cahill. " So what we did is that we put together a program where we would own the solar system, the customer would get the benefit of the solar system in cancelling their electricity out, we would take the tax credits and the depreciation and the rebate, and then we would structure a lease whereby the customer's monthly payment between the lease and the utility would go down."
People who don't use a lot of electricity aren't likely to see savings, but those with bills higher than $150 a month can expect to save an average of 15 percent. For Goalen, it turned out to be even more.
"Previously to the panels my electricity bill was probably running on average about 270 to 290 US dollars a month, and once I installed the panels I reduced that cost to about 50 dollars a month and with a 100 dollars a month that I pay for the lease on the panels, it reduced my costs about 40 percent."
SolarCity's leases run for 15 years, and the company designs, installs and maintains the system.
Other companies, such as REC Solar, Akeena Solar and GroSolar offer similar financing options. Like SolarCity, they are building successful brands in a political and financial environment increasingly favorable to green incentives.
For SolarCity, business is booming. The company was one of the few in California to recruit in the past year, despite the recession, and it expects its business to grow by 250 percent next year. A lot of it has to do with the success of the leasing system, also adopted by major companies such as eBay and Intel. SolarCity claims 4,500 residential and commercial customers in California, Arizona and Oregon -- 60 to 70 percent of whom are now leasing instead of purchasing solar panels.
eBay's 650 kW installation-including 3,248 individual solar panels-spans 60,000 square feet on five separate buildings. If laid side by side, the panels would fill more than a professional American-football field. In total, eBay's solar system will offset 37 million pounds of carbon dioxide over the next three decades, and save the company approximately $100,000 in electricity costs within its first year of operation.
And yet, solar installers are still in a very niche business: to date, solar only provides one percent of the United-States' energy.
"Our goal right now is just to continue to expand into the market. We're really at the tip of the iceberg. If you think about how much solar is out there, even nationally, there's less than a hundred thousand homes that have solar," says Cahill.
When Goalen's solar panels produce more energy than he uses, it is put back into the grid - a contribution that will benefit him in the form of credit on his future bills. Another advantage of the system.
"It's really made me look at everything across my house, changing the light bulbs, looking at ways that I can reduce water costs here in California, water usage, looking at ways that I can change my appliances to upgrade and looking at different ways as well. I'm looking at wind turbines. Naturally I talk about it to all my friends, I tell them how great it is and how they should be doing it, even if without the cost, just the fact that we're changing the way we live, we've got to do it." - Copyright Holder: REUTERS
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