By Maura Forrest
May 8, 2014
Google is establishing itself as a major player in the renewable energy sector with its newest investment in residential solar power.
The tech giant recently announced a $250 million partnership with solar panel manufacturer SunPower that will finance rooftop solar panel leases for thousands of American homeowners. Google will contribute $100 million to the deal, with SunPower providing the remaining $150 million.
In a news release, Google explained that the companies will lease solar panel systems to Americans “at a cost that’s typically lower than their normal electricity bill.”
Although the cost of a solar panel system is still in the tens of thousands, the price has declined rapidly, with a 50 percent drop reported in the United States between 2010 and 2013. That, and the prospect of a $0-down lease that includes installation, may make Google’s offer enticing to homeowners.
This is not Google’s first foray into solar leases. The company has already set up funds worth at least $355 million with Solar City and Clean Power Finance for residential leases.
Other firms are following suit. Electricity companies largely dependent on coal and natural gas are now buying solar energy companies to get into the rooftop solar market, recognizing residential photovoltaic power as a safe investment.
A recent report from GTM Research found that in 2013, photovoltaic installations had increased by over 40 percent in the previous year alone.
“2013 offered the U.S. solar market the first real glimpse of its path toward mainstream status,” Shayle Kann, GTM Research’s senior vice president, wrote in a release.
But rooftop solar is not without its challenges. SunPower leases can run for up to 20 years, which can cause problems for people who try to sell their home before the lease is paid off.
Most solar leases require a credit score of at least 700. If the installation company refuses to transfer the lease for a rooftop solar system to a new homebuyer, the previous owner could be on the hook for the balance of that lease.
Still, interest in rooftop solar panels is strong. The GTM report predicts that photovoltaic installation will grow by another 26 per cent in 2014, and that growth “will be most rapid in the residential market.”
Photo Credit: Brooke Gray