Rental solar – consumer financing or con?

One of the biggest barriers to solar energy is financial. It’s cost effective but has a really long payback period. SunEdison is a Goldman Sachs based venture that solves this problem by building solar installations on the roofs of retailers like Staples and Whole Foods, and then sells them the power at a fixed cost. SunEd can raise the capital for the installations, and expects the retail energy will be higher than the cost of their capital. The customer doesn’t need to pay the upfront cost. Solar energy by closing the financing gap.
A company named CitizenRe is trying this model out in the consumer market.They’ll put solar panels on a homeowners roof, and sell them power in one, five, or twenty-five year increments.
They claim to have $650 millin in capital. But their web site doesn’t have any information about the source of that capital, unlike SunEdison which is clearly a Goldman Sachs backed company. Their execs don’t appear to have posted bios.
They claim that “Over 70% of our customers sign the 25-year contract because that locks in their rate for the entire term of the contract. ” They are planning to do their first installation in September, and claim 3694 customers for a pre-released product. Uh oh.
How have they found 2500 buyers to take a 25 year contract with a brand new company for a pre-released product. This smells fishy to me. The model is certainly attractive, but I wouldn’t sign a 25 year contract for a brand new product with a new company. I’m leery enough about a 2 year cellphone contract in a dynamic voice market. Thirty year mortgages are stable, because there is a huge legal and financial infrastructure behind them. Who are they selling to, and how are they selling? Do they have sales people visiting retirees in Florida and Arizona, or what?
Solar leasing seems like an excellent market opportunity. Moving from the business to the household market seems like a good and inevitable idea, especially with incentives such as the California Million Solar Roofs project. CitizenRe, though, sounds fishy.

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