Why Is This Part of the Solar Market Taking Off?

Every year for the past three years, global photovoltaic solar panel installations have set new records. What should make investors perk up even more, though, is one subset of the industry that is growing even faster: distributed solar panel installations by third parties. A great indicator of this growth is found in California today. While distributed solar panel installations have more than doubled since 2010, installations by third parties have increased tenfold. Today, third-party installations represent 70% of all distributed installations in the state. 

So what makes third-party installations more attractive for homeowners and businesses that could cash in that federal tax credit? In the video below, Fool contributors Tyler Crowe and Aimee Duffy discuss why this is becoming such an attractive option for individuals and why it makes a good business model. 

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  • Report this Comment On September 20, 2013, at 2:23 PM, ronwiserinvestor wrote:

    There are no upfront cost with a $0 down solar loan instead of a lease and there are no headaches with a reputable installer.

    Leased system are priced much higher than purchased systems, typically $5.00 per watt for a leased system versus $2.03 per watt after the 30% federal tax credit or a $14,850 price difference on a 5kW purchased system, right out of the gate.

    When you consider the total lease payments over 20 years and the 2.9% annual payment increase on many $0 down solar leases, the difference increase dramatically, making a purchase, with a $0 down solar loan much better for the consumer.

    The consumer will pay so much more with a lease that it is actually the consumer who is paying for their own maintenance and repairs. Also keep in mind that most $0 down solar loans offer tax deductible interest while the payments on a solar lease or PPA do not.

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