Page 38 - North American Clean Energy March April 2015

solar energy

Residential Solar Financing

Addressing soft cost reductions
By Stephane Dufrenne

In 2014, growth in the solar industry was driven largely by the residential sector: over 200,000 residential solar

photovoltaic (PV) systems were installed throughout the year. hat’s more than four times the number of residential
installations in 2011.

As of the outset of 2015, the Solar Energy Industries Association (SEIA) predicts the “Soft costs” make up the remaining 64%, and until the overall system price is decreased,
demand for residential solar power will only increase based on data from recent years. high upfront costs will continue to be the number one barrier preventing homeowners

Falling prices and new inancing models have further driven demand by making solar from installing residential solar systems. Demand for residential solar energy may be high,
energy more accessible to homeowners and more cost-eicient for downstream businesses, but the market cannot realize its full potential until inancing models successfully enable
such as for installers.
reduction of both upfront system costs and soft costs.
For homeowners, the beneits of installing a solar PV system include security against

volatile electric utility bills and a reduced environmental impact. System costs have New inancing models
dropped in recent years, most notably with an 80% decrease in hardware costs since 2008.
he irst inancing models on the market ofered by third parties, such as developers and
However, only 36% of the total cost to install rooftop solar comes from hardware.
banks, primarily focused on upfront cost reduction. Although these third-party leases and
Anz Photovolt_86x117_USA 15.12.2009 14:11 Uhr Seite 1
power purchase agreements (PPAs) did, in fact, dramatically reduce upfront costs, they
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fell short for homeowners over the long-
term, limiting the rate at which installers
LOW COST,
could aford to acquire new residential
Lightning Protection
HIGH ACCURACY METERING
customers.
In a typical lease or PPA, the rebates
Surge Protection
and federal tax credits are monetized
for the inancing institution. For

homeowners, this diminishes the
return-on-investment (ROI) over the
long-term. Installers, who typically
purchase equipment prior to installation,

are left holding the check, assuming
high overhead costs without immediate
inancial returns. Additionally, lease
terms are often rigid, proving diicult

and costly to handle should a homeowner
decide to move before the term of a lease
is completed.
Revenue-Grade WattNode® Over the past year, some states have

Meters for Energy Monitoring
experienced a gradual decline in third-
party inancing. In part, this decline has
resulted from further decreased hardware
Modbus®, BACnet®, LonWorks®, Pulse Output costs. But, more notably, solar loans have

Certiied ANSI C12.1, PBI, UL, cUL
become more prevalent and easier for
homeowners to obtain and have begun
Check our Prices & Compare our Speciications
to displace leases and PPAs. he shift to
DEHN Inc.
loans makes sense: why rent when you
851 S. Kings Hwy, Fort Pierce, FL 34945 USA
could buy?
Tel: +1 (772) 460-9315 • FAX: +1 (772) 460-9316 Instead of paying rent on a leased
e-mail: [email protected] • www.dehn-usa.com
1-888-WattNode (928-8663) • ccontrolsys.com
system indeinitely, a loan enables

38 nacleanenergy.com
MARCH/APRIL 2015