The solar loan space is becoming increasingly crowded, with latest entrant bringing with some considerable heft to. SolarCity has released its MyPower solar loan, which will offer households a 30-year loan at a fixed annual interest rate of 4.5%. The company says that MyPower customers will pay up to 40% less than the cost of power from the socket.
In an interesting feature of the product, customers will pay back the loan in a similar way as they would a lease, paying per kWh the solar array produces. Importantly though, the customer is the owner of the solar system.
SolarCity is far from being alone in offering solar loans, with GTM reporting that there are at least nine firms offering some form of solar loan in the U.S. There is growing body of evidence that solar loans are set to grow dramatically and draw market share away from leases.
If we see the cost of PV systems at a retail level fall down to below $10,000 for a 5kW system then more and more people will move towards loan products, said Minh Le, the director of solar technologies office at the U.S. Department of Energy in a Solar PVTV report.
Solar City will offer its MyPower solar loan through a subsidiary, the SolarCity Finance Company. Customers with a minimum credit score of 680 will qualify. Customers can pay off the loan early without penalty. SolarCity claims that in the event of a home being sold, that the loan is easily transferable. This is due to there being no lien on the home with the MyPower product.
In terms of servicing the system, often claimed to be a major factor in a homeowners decision as to whether to go solar or not, SolarCity will offer its standard service package. In fact, due to the loans lease-like payment structure, if the system fails or underperforms, SolarCity ends up footing the bill.
SolarCity says that it expects the loan product will see residential solar grow to states where solar has not yet become well established. Its size and reach certainly cant be questioned with operations in 52 states. Earlier this week, GTM research announced that the company captured 35% of U.S. residential market share in Q2 2014.
MyPower will be offered in Arizona, California, Colorado, Connecticut, Hawaii, Massachusetts, New York and New Jersey.