SunPower Corp. and Citi today announced a new fund to finance approximately $105 million in residential solar lease projects. According to the announcement, the lease program will be available to qualifying homeowners in eight states: Arizona, California, Colorado, Hawaii, Massachusetts, New Jersey, New York and Pennsylvania.
Here’s a requisite sound bite:
“Citi’s global financial leadership combined with SunPower’s leading technology and quarter century of experience offer customers an unprecedented level of assurance that is vitally important when a homeowner enters into a 20-year lease agreement,” said SunPower CFO Dennis Arriola. “We are proud to partner with Citi, and applaud its commitment to promoting the use of solar power.”
Solar leases enable homeowners to pay a monthly fee for their solar home energy system rather than buy it outright. The approach makes good financial sense in those parts of the country where the homeowner’s combined monthly lease payment and electric bill sum to an amount that’s less than their pre-solar electric bill. Let’s take a quick example:
- Current electricity bill = $200/month
- Projected bill after installing solar panels = $100/month
- Your monthly solar lease payment = $60/month
- Monthly savings from Day 1 = $40
Solar power is relatively less cost competitive in those regions, like the Southeast, where electricity rates are lower than the national average. That’s partly why you’ll tend to see many solar lease options available in states like California and New York, but relatively few in, say, Alabama.
The news from SunPower and Citi comes just a few days after Sungevity, a California-based solar lease provider, announced a mid-summer tour to promote its financing option among homeowners in five northeastern states. And, back in June, Google announced it would provide $280 million to SolarCity for its residential lease programs. The other major solar lease provider is SunRun, which is active in nine states across the U.S.