In the past, small and medium-sized businesses that wanted to install solar panels were, for the most part, forced to buy them — meaning that companies that didn’t have enough money upfront to pay for the panels weren’t able to go solar. Now, that’s changing.
SolarCity announced Tuesday that it was starting to offer a leasing plan for small and medium-sized businesses. That’s a corner of the solar market that, so far, has been neglected, SolarCity Chief Executive Officer Lyndon Rive told ThinkProgress. And it’s a big corner — according to SolarCity, 99 percent of all businesses in the U.S. are small or medium-sized, a designation typically reserved for companies with fewer than 500 employees.
Until now, it’s been too expensive and too difficult for companies like SolarCity to find ways to finance solar arrays for smaller businesses. Under SolarCity’s new program, the company plans to use its own solar installers — instead of subcontractors — to put in the system, which SolarCity estimates will reduce the cost of installation by around 30 percent. The company has come up with a lightweight solar panel mounting design that allows businesses to fit 20 to 50 percent more solar panels on their roofs and takes takes just a few days to install, rather than two to three weeks.
SolarCity is also taking advantage of the Property Assessed Clean Energy (PACE) program, which helps finance private renewable energy installations. With the help of PACE, SolarCity pays the upfront cost for the solar system and small businesses pay off the cost over time on their property tax bills. Still, though the system does open up the market for small businesses that can’t afford the upfront costs of solar, it’s still likely a better deal for a business that can afford it to pay for its own system and earn tax credits itself, as ThinkProgress pointed out earlier this year.
SolarCity is planning to start offering the program to businesses in California, then expand across the country next year. According to the company, the new program will allow small and medium-sized businesses that go solar to pay 5 to 25 percent less than they typically do for electric bills. Rive said the company has had a “tremendous amount of interest” from small and medium-sized businesses over the last few years, so he expects the new program to be successful.
“I’m convinced this is going to be a massive turning point in the solar sector,” he said. “The solar sector has neglected a massive market and now that market can be addressed.”
He also linked the new program to Democratic presidential candidate Hillary Clinton’s new climate plan, which she released Sunday. The plan aims to tackle climate change in part by installing half a billion solar panels by 2021 — a 700 percent increase from the current rate of installation.
If Clinton does become president, the way to achieve that goal is to “open up more segments, and this small business segment has the potential to be larger than the commercial segment,” Rive said.
The U.S. solar industry has been booming in recent years. Last year, residential solar installations beat commercial installations for the first time — a spike in personal solar systems that is being driven mainly by middle-class Americans. And politicians besides Clinton — including other presidential candidates — have caught on to solar’s appeal. Democratic candidate and Vermont Senator Bernie Sanders introduced legislation earlier this year that aims to make it easier for low-income Americans to get access to solar power. And Martin O’Malley, another Democratic candidate, introduced a plan earlier this month that aims to have the country powered by 100 percent renewable energy by 2050.