A January 11 study has found that solar lease models have gained popularity in less affluent neighborhoods.
The study, “The Transformation of Southern California’s Residential Photovoltaics Market through Third-Party Ownership,” was conducted by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL).
Looking at households in southern California, the report found a positive correlation between households buying solar energy systems outright and customers living in neighborhoods with an average household income of $150,000 or more.
Photo Credit: Cooler Planet
On the other hand, leased PV panels were correlated with neighborhoods having an average household income of $100,000 or more. Solar leasing was also correlated with younger households.
Third-party leasing models provide a way for households to install solar panes without the high up-front cost of installation. Further, as the study notes, solar leasing offers savings right away, whereas those who buy PV systems outright must wait a decade or so to break even.
Drury highlighted the impact of presenting the savings from solar as instant rather than long-term. “If someone comes up to you and says you can make money next month and forever, that totally changes how people see the value of solar,” he said.
“What is so interesting about the southern California data is that the strong decrease in PV prices – from lower retail costs and stronger federal incentives – didn’t pick up a new demographic,” said Easan Drury, the lead author of the report. “But the new business model – leasing – did pick up a new customer demographic.”
The report said that because leasing appears to attract new demographics to adopt PV, “third-party PV products are likely increasing total PV demand rather than gaining market share entirely at the expense of existing customer owned PV demand.”
NREL says it if this trend proves to be applicable to the whole country, there could be PV systems for another 13 million Americans living in households with an annual income between $100,000 and $150,000.
