Driving Solar Growth Through Financing: SolarCity CEO Lyndon Rive (Part 5)

SM: Are you working exclusively with panels from First Solar now?

LR: We are not exclusive. Different scenarios require different technology. Given the choice, if we can apply First Solar or a different panel, our customers will want First Solar. If the roof does not accommodate it then we use a panel from another strong partner, Evergreen Solar. I really like their technology as their production tolerance is unique in the solar industry.

The panel itself has a tolerance factor of plus or minus 5%. In reality your 200w panel can actually be a 195w panel. If you have a string of panels and just one of them is a 190w panel, then they are all 190w. What we like about Evergreen is that it has a tolerance of minus 0/plus 2. If it is a 200w panel then it is at least a 200w panel. Their tolerance is really tight.

Both companies are strong players in the solar space. First Solar has a full recycling program and at the end of life, 30 years after you install the solar system, they will pay to have the system shipped back to them and they will recycle the entire product. We really like that about them. Of the crystalline cell modules, Evergreen requires less energy to produce their modules than any other module. Environmentally, their payback is faster than any other payback out there. That is another reason we like Evergreen.

SM: In terms of your business distribution, how much is residential versus commercial and government?

LR: It is about a 60/40 split between residential and commercial. We used to be 90% residential, so our commercial business has grown quite a bit. Next year I expect it to be a 50/50 split.

SM: What are the drivers for adoption that you see in your customers?

LR: The biggest is financing.

SM: Environmentalists looking for the right financing?

LR: This is a unique product as it applies to environmentalists. It also applies to someone who is just interested in saving money. Many of our customers are not environmentalists at all.

SM: Are your deals structured to allow them to save money?

LR: Our customers save money from day one. What has recently happened, which is good for us and the entire industry, is that the tax credit used to be capped at $2,000 for a residential home owner. That tax credit is now lifted and there is no cap. You can have the full 30%. If you have capital laying around and you want a safe, good, investment, buy a solar system. You can see the predictable outcome and you can calculate your savings. Your payback is anywhere between seven and 13 years depending on where you are and how much power you use. It is a clear return on investment that is likely better than you do on the stock market today.

If you buy a system your return is between 10% and 15% over the life of the system in annual returns. If you don’t have the capital leasing the system is a great option. If your electric bill is $250, then your lease payments and your new electric bill will probably add up to around $200. You would be saving $50 a month with no investment.

On top of everything else there are environmental benefits. I think we address the best of both worlds. Buying a solar system is a good, safe, investment. If you are looking to save money and don’t have the capital to buy, then lease.

This segment is part 5 in the series : Driving Solar Growth Through Financing: SolarCity CEO Lyndon Rive
1 2 3 4 5 6