San Mateo’s SolarCity, the nation’s largest solar panel installer, has become the focal point of the rapid mainstreaming of solar power.
SolarCity pioneered solar leasing programs, which not only make solar systems affordable to homeowners, but also attract the attention of big corporate funders looking for tax-friendly investments.
With the recent infusion of $280 million from Google, SolarCity now has a $1.28 billion capital pool that it uses to help customers obtain solar power systems for little or no money down.
The investment pool enables homeowners to finance the lease or rental of solar systems that cost no more, and often less, than a consumer’s existing power bill. For a no-money-down lease or a rental starting at $60 a month, SolarCity will install, repair, insure and monitor solar panels that it designed.
SolarCity is unusual among solar companies in that it provides this entire spectrum of solar services.
Company spokesman Jonathan Bass called it “the first company to provide solar power system design, financing, installation and monitoring services from a single source.”
By making it easier for homeowners to afford the steep up-front costs of solar services — typically $20,000 to $30,000 — SolarCity has helped accelerate the adoption of solar power.
“For niche market people who can’t get a loan or don’t have the cash, it’s going to be a good way for them to go solar,” said Kurt Newick, a salesman for Horizon Energy Systems in San Jose, which competes with SolarCity.
The company’s competitors also are excited about the long-term ramifications of Google’s investment in SolarCity. “It paves the way for more investment in solar so we can get to the next level in maturity as an industry,” said Andy Black, CEO of the San Jose-based OnGrid Solar.
However, some smaller competitors look askance at SolarCity’s approach because the company’s broad range of services enables it to lump multiple costs together and thus qualify for larger tax breaks than other companies are able to obtain.
Black said SolarCity’s scale enables it to qualify for a higher tax credit bracket and higher capital- asset depreciation rates — savings 25 to 45 percent higher than those available to the average solar company.
Google and other SolarCity financial partners such as US Bancorp, which started a $158 million SolarCity fund in 2009, also receive tax rebates or federal grants for their investment in solar.
Bass, however, notes that his company’s innovative financial approach has been instrumental to the company’s growth.
“If you lease it, then we as the owner of the system, apply the tax credit and any rebates that apply to lower the cost,” he said. “That’s how we can lease something that costs a lot for a little.”
SolarCity’s approach is also creating local jobs. In a tough economic market, the firm has hired more than 600 people in 12 months, Bass noted, including more than 100 hires at its San Mateo and Foster City facilities.
Headquarters: San Mateo
- 1,200 employees in 25 states
- 15,000 customers
- 15 project funds with seven partners worth $1.28 billion
Major clients: Whole Foods; Intel; eBay; Wal-Mart; city of Sacramento; U.S. Department of Homeland Security; more than 100 schools and universities, including some in San Mateo County; city of San Jose