The biggest innovation in the solar industry in recent years has been financial rather than technological – letting homeowners lease photovoltaic panels and avoid the steep upfront capital cost of going solar. That has driven the pell-mell growth of solar installers like SolarCity, SunRun and Sungevity even through the depths of the Great Recession.
Now solar leases are becoming a significant part of the business of photovoltaic manufacturers squeezed by falling prices for solar panels and uncertain markets in Europe.
On Wednesday, SunPower, which is one of the U.S.’s biggest photovoltaic manufacturers and power plant developers, said Citi and Credit Suisse will finance up to $325 million in residential solar installations for the company’s customers. (Credit Suisse last week pledged $300 million to finance solar leases for SolarCity and SunRun.)
“It’s growing incredibly fast.” Howard Wenger, SunPower’s president of regions, said of the lease program during the company’s second-quarter earnings call Wednesday. “We’re at a rate of about 1.5 megawatts to 2 megawatts per week.”
Wenger said SunPower, which makes high-efficiency solar panels and is majority owned by French energy conglomerate Total, expects that a quarter of the company’s business could come from solar leases within a year or two. SunPower has signed more than 10,000 solar leases since it launched the program last year, he said.
SunPower will lease the photovoltaic systems to Citi and Credit Suisse, which in turn will sublease the solar arrays to homeowners, according to SunPower chief financial officer Charles Boynton.
“The financial institution will provide an upfront payment to SunPower and will earn its return on investment through a combination of the federal tax credit and rentals from the homeowner,” said Boynton on the earnings call. “The upfront payment to SunPower covers much of the costs of the system, including dealer installation costs.”
“As the owner of the system, SunPower retains the system’s tax depreciation and residual system value at the expiration of the lease,” he added. “And in addition to the upfront payment from the financial institution, SunPower will also be receiving monthly cash rental during the latter portion of the homeowner lease.”
The lease deal came as SunPower reported a second-quarter loss of $84.2 million compared to a loss of $147.9 million in the year-ago quarter. Revenues jumped to $595.9 million in the second quarter from $494.1 million in the first quarter and $592.3 million in second quarter of 2011. SunPower shares were down 12% to $4.12 Thursday morning.
Source: http://www.forbes.com/sites/toddwoody/2012/08/09/photovoltaic-manufacturers-see-profit-in-solar-leases-amid-market-upheaval/
Now solar leases are becoming a significant part of the business of photovoltaic manufacturers squeezed by falling prices for solar panels and uncertain markets in Europe.
On Wednesday, SunPower, which is one of the U.S.’s biggest photovoltaic manufacturers and power plant developers, said Citi and Credit Suisse will finance up to $325 million in residential solar installations for the company’s customers. (Credit Suisse last week pledged $300 million to finance solar leases for SolarCity and SunRun.)
“It’s growing incredibly fast.” Howard Wenger, SunPower’s president of regions, said of the lease program during the company’s second-quarter earnings call Wednesday. “We’re at a rate of about 1.5 megawatts to 2 megawatts per week.”
Wenger said SunPower, which makes high-efficiency solar panels and is majority owned by French energy conglomerate Total, expects that a quarter of the company’s business could come from solar leases within a year or two. SunPower has signed more than 10,000 solar leases since it launched the program last year, he said.
SunPower will lease the photovoltaic systems to Citi and Credit Suisse, which in turn will sublease the solar arrays to homeowners, according to SunPower chief financial officer Charles Boynton.
“The financial institution will provide an upfront payment to SunPower and will earn its return on investment through a combination of the federal tax credit and rentals from the homeowner,” said Boynton on the earnings call. “The upfront payment to SunPower covers much of the costs of the system, including dealer installation costs.”
“As the owner of the system, SunPower retains the system’s tax depreciation and residual system value at the expiration of the lease,” he added. “And in addition to the upfront payment from the financial institution, SunPower will also be receiving monthly cash rental during the latter portion of the homeowner lease.”
The lease deal came as SunPower reported a second-quarter loss of $84.2 million compared to a loss of $147.9 million in the year-ago quarter. Revenues jumped to $595.9 million in the second quarter from $494.1 million in the first quarter and $592.3 million in second quarter of 2011. SunPower shares were down 12% to $4.12 Thursday morning.
Source: http://www.forbes.com/sites/toddwoody/2012/08/09/photovoltaic-manufacturers-see-profit-in-solar-leases-amid-market-upheaval/
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