July 24, 2009

Renting Solar Power from SolarCity

About a year ago I wrote the article: Renting Solar Panels? In that I talked about a company named Citizenre that planned to rent solar panels to people with no cost other than the power of the electricity. Well a year has gone by and Citizenre doesn't seem like they have any concrete details or dates yet for when they would actually start renting solar.

There is a company out there leasing solar panels to consumers and actively installing hardware. That company is SolarCity. They actually had a booth setup at our local Costco a while back. Before I go too far into talking about them I should note that it looks like they currently serve Arizona, California and Oregon.

Solarcity will sell and rent panels to individual homeowners. Their SolarLease lets you pay them monthly payments on your solar panels over a 25 year period which is effectively renting them. Their website says a "typical" 3 bedroom home with an electric bill of $200 would get a 4kW solar system and then end up with electric bills from the electric utility of $65 and a $0 down lease of $115. Thats a $20 month savings. However I suspect that their 'typical' home is in a fairly sunny location.

I ran the numbers for my own home and came out with a -$156 annual savings on their Solarlease. I'd be losing money on the lease setup. So their lease isn't going to work for me. Our electric is currently $175/month. The solarlease would be $41 and the new electric bill would be $147. However using their calculator defaults it said if I bought the system with cash it would cost $34,014 less federal, state and local tax and rebate incentives for final out of pocket cost of $10,132 and I'd save $336 a year on my electric. They calculate the ROI at 2%.

In my last look at evaluating solar panels I figured that the 'sweet spot' to maximize my return would be a 2kW system. SolarCity's calculator seems to default to a larger 3-4kW system. I told their calculator that my electric bill is $25 and it put out a smaller cost system with final cost of $3,638 and annual savings of $168. Thats not the sweetest deal but not too bad either. It amounts to 4.6% annual payback and a 21 year payback period.

SolarCity claims to be the largest installer of residential solar power in the country. Plus they have a lot of positive press including news of installations for major companies. I think their Solarlease system could be a great deal for people in sun drenched areas.

If you're looking into solar then SolarCity is probably worth checking out.

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