Leasing takes off Down Under

Module manufacturers, installers and international solar leasing providers are introducing solar leasing models for both residential and commercial customers in Australia.

Last month Chinese manufacturer Trina Solar sought to consolidate its market leading position as a module supplier in the Australian PV market by introducing a solar leasing scheme. Trina Solar Australia created the company Lightleasing to roll out its leasing service. The offer is being introduced into the market in the fourth quarter of 2013.

The leasing scheme will provide both businesses and residential consumers the opportunity to install a PV system without upfront costs. Lightleasing provides a performance guarantee and “flexible lease terms, maintenance and insurance included,” the firms announced in a statement.

Installer Infinity Solar will roll out the scheme for Trina and Lightleasing, with Infitity’s Group Director Chris Thomson saying that by removing upfront costs, customers now have the opportunity to install a “high quality PV system. With a really low interest rate, in most cases, the energy savings generated by the solar system will dramatically reduce power bills, and cover the monthly loan repayment so customers are expected to save money from day one.”

California to Australia

Californian based solar lease and online PV sales provider Sungevity entered the Australian market in the fourth quarter of 2012 and have found that as the last of the state-based FIT schemes wind up, removing upfront costs through lease or loan arrangements has been well received.

Sungevity partnered with the New South Wales based installer Nick Lake to make market entry in Australia. Lake is now the managing director of Sungevity in the country. Sungevity first went to market, in terms of nothing-up-front PV, with a seven-year loan product. It has now expanded that with a 15-year pay-as-you-go agreement and will introduce the Sungevity solar lease in the first quarter of next year.

Sungevity still offers a full system purchase product, with the whole suite utilizing the company’s Remote System Design online sales portal.

Sungevity’s Lake says that the staggered roll out of the company’s nothing-up-front offerings has been due to the time taken to secure debt financing for PV from Australian financial institutions. "It really has been a struggle to get the financing happening here in Australia — without the tax equity funding the U.S. market has enjoyed," Lake tells pv magazine. “There has been a lot of people doing good background work on this, and we’re only now seeing the fruits of that labor."

Lake confirmed the sentiment expressed by Infinity Solar’s Thomson, that the introduction of debt financing and the entry of banks into the picture will lead to increased demand for fully bankable systems and quality components. “As we get to some scale with that equity, we can look to enjoy a much cheaper cost of funds to tap into when there is debt involved, and that won’t be far away,” Lake says.

Sungevity has also been selected by Trina and Lightleasing to offer its solar lease product.

Diverse offerings

Australian installer Ingenero, which is based further north in the state of Queensland, last month announced a partnership with Thorn Money to release its Energy Access solar lease product to consumers. Thorn Money is an Australian firm that provides personal and commercial financial products, including rental for household goods.

In announcing the partnership, Ingenero CEO Steve McRae said that solar leasing in Australia would build on the success of the service in the U.S. market. "By partnering with leading Australian financial services provider Thorn Money, we will be able to make solar power more accessible to Australian homeowners and businesses," said McRae

Ingenero has previously made a solar leasing product available in a campaign with NGO Green Cross Australia.

Commercial offering

While the Trina, Sungevity and Energy Access offers are all also catered to commercial customers, a Western Australian installer and solar developer is taking a different route to market with a leasing product. Perth based Infinite Energy has made an application to the state’s regulatory authorities to become an independent electricity retailer.

Once granted a license, Infinite Energy would be able to offer commercial sized solar installations under a power purchase agreement (PPA). Infinite Energy Managing Director Aidan Jenkins tells pv magazine that under such a PPA, for most businesses, a PV installation can be revenue positive from day one, with the business owning the installation after the PPA concludes.

Infinite Energy’s Jenkins said that in the current market, a solar installation can offer a return of around 30 – 40% and capital constraints for many businesses prevent them from purchasing a commercial PV installation. “The economics of PV in Perth are compelling, there is huge production, in terms of kilowatt hours per kilowatt peak (kWh/kWp) and electricity prices are as high as AUD0.35 to AUD0.40 per kilowatt hour,” says Jenkins.

Presently commercial installations only make up 10% of Infinite Energy’s sales. Jenkins says, however, that while many businesses are struggling due to high electricity prices, many have yet to realize the savings a PV installation can offer. “The underlying economics are some of the best in the world, but there’s not a natural sense that commercial PV is the solution to the problem,” says Jenkins.