Entrepreneur Offers Alternatives to the High Cost of Solar Energy OneRoof Energy wants to change the way homeowners think about solar energy, and how much it costs.
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While few homeowners would object to lower utility bills, many have eschewed residential solar power systems because of the upfront costs--which can be equal to the price of a new car. But just as consumers have embraced the option of leasing automobiles, there has been a shift in the residential solar energy market, with increasing numbers of homeowners installing leased systems. A report by the Solar Energies Industry Association found that residential solar installations increased 11 percent from 2010 to 2011, driven primarily by third-party ownership.
OneRoof Energy is banking on this new approach. The San Diego-based company leases its residential systems--which can cost $30,000 to $40,000 if purchased outright--and has agreements with contractors for installation. The homeowner pays little or nothing upfront but has a monthly leasing fee and, presumably, a vastly reduced electric bill. Typical users see savings of 15 to 25 percent off their monthly expenditure on electricity, according to OneRoof president and CEO David Field.
Bringing its SolarSelect Lease program to market required some creative fundraising. In addition to raising working capital, OneRoof needed to create a specialized tax equity fund that purchases the residential leases and takes advantage of breaks like the investment tax credit, which reduces the tax liability for companies investing in solar projects.