SolarCity wants small businesses to go solar
SolarCity says small- and medium-sized businesses have been left out of the rooftop solar revolution — and that is about to change.
The nation’s largest solar installation and financing company on Tuesday introduced a rooftop solar lease for small businesses in California that is paid back through assessments on property taxes.
SolarCity says it can save those businesses in California between 5 percent and 25 percent off current utility bills. Solar equipment and maintenance costs are paid back over a 20-year period through fixed monthly payments.
“It’s a nut we’ve been trying to crack as an industry for some time because more than 98 percent of businesses in the U.S. are small businesses,” SolarCity spokesman Jonathan Bass explained.
Under lease and power purchase agreements, SolarCity owns and maintains the rooftop equipment and effectively sells solar power to the customer at a cheaper price than the local utility.
Fortune 500 companies such as Walmart have been quick to strike deals with solar companies that turn vacant rooftops across the country into renewable power plants. California households also have signed up for rooftop solar in droves to take advantage of generous federal and state solar incentives.
Financing has been much trickier to arrange for small businesses, who fall into a crevasse between corporate credit ratings and consumer credit FICO scores, according to SolarCity.
The solution, SolarCity believes, is a loan that gets paid back through increased property tax assessments.
“We finance the cost of installation and the equipment, and they pay for it on their property tax bill,” Bass explained. “The payment comes through to us. It’s a commercial solar lease and PACE (Property Assessed Clean Energy) financing combined.”
The new leases are designed for buildings with available roof space of 5,000 square feet to 50,000 square feet. Energy systems would provide between 30 kilowatt hours and 500 kilowatt hours of generating capacity.
SolarCity plans to gradually expand the small-business offering next year to other states where it does business. It says its leases will provide a hedge against future electricity rate increases.
Rooftop solar power can help businesses reduce utility charges by the kilowatt hour as well as “demand charges” for power consumption during hours of peak demand when electricity costs more.
Technological advances also are at play.
SolarCity says solar-lease savings are made possible by advances in its proprietary mounting system for solar panels, dubbed ZS Peak that speeds up installation by company construction crews.
The new mounting system departs from a traditional strategy of arranging solar panels to face south. A combination of east- and west-facing panels — spread out in an accordion-like fashion — allows for more panels, fewer vacant shadows and better power production early and late in the day, Bass explained.
Originally published in the San Diego Union-Tribune.