TPO involves providers financing, installing and maintaining residential systems on households, giving homeowners lower electricity bills with no upfront capital costs in return for a monthly leasing fee to the provider.
GTM Research is predicting TPO could be a US$5.5 billion market by 2016, totaling 1.4 GW and with an average system cost of $3.18/W.
The report’s authors claim these are "conservative" estimates and take-up could be much larger if TPO systems become cost competitive without incentives across U.S. states outside the 14 currently embracing the TPO model.
California is one of those and TPO provider SunRun, with market research company PV Solar Report, this week announced TPO attracted $938 million to the state’s economy in 2012 and already accounts for 74% of residential solar installations state wide.
The announcement by SunRun, a pioneer of TPO along with rival SolarCity, revealed the democratizing power of the ownership model. With a July 2012 report from the California Solar Initiative revealing two-thirds of TPO installations are in medium to low income households, solar is no longer the preserve of homeowners wealthy enough to finance their own systems.
The GTM report predicts an annual growth rate of 39% in TPO take-up with the ownership model amounting to 83% of domestic installations by 2016.
The biggest TPO providers ranked by the amount of financing raised are: SolarCity, which has announced funding of more than $1 billion; SunRun, with $845 million; and SunPower with $530 million; ahead of Clean Power Finance, which has announced $375 million to date.
GTM estimates around $3.5 billion to $4 billion has been secured, including unannounced funding which, at a rate of $5.5/W, would equate to 625-750 MW.
Bancorp is the most prolific financier on a list which also includes Google.
The GTM report estimates there are ten major TPO providers in the States, with a variety of business models.
SolarCity is a fully integrated player offering all aspects of TPO provision including generating custom, closing sales, installation, funding and maintenance, although its residential systems use modules from Yingli, Kyocera and Trina. Solar City also operates across the highest number of states where TPO is adopted.
SunPower, whose supplier network consists of thousands of small installers nationwide, is the only major player to install its own modules.
Clean Power Finance, by contrast, performs just the financing and monitoring aspects of the TPO model, providing all other services through partner organizations.
With Solar City recently calling for a 127% expansion in residential solar installations, Sungevity raising a fresh $40 million round of venture capital funding and soft costs predicted to fall, TPO looks all set to be the way ahead for residential solar.