Back in 2014, 72% of all solar systems installed in the United States were third-party owned. Ever since that peak, the industry has made a strong transition to more cash- and loan-based deals. GTM Research predicts that by 2021, the industry will flip, and 73% of all systems sold will be directly owned by customers.
The decrease in solar leasing options comes largely from major residential companies exiting the market. Names like Sungevity, NRG Home Solar and Direct Energy Solar have left, and SolarCity/Tesla (once the largest third-party ownership financing provider in the country) has significantly scaled back its residential offerings and transitioned to cash or loan systems. Sunrun and Vivint Solar—still leaders in leased systems—have also made efforts to increase cash and loan solar buys.
Local solar installers have also transitioned to more customer-owned options. In EnergySage’s 2018 Solar Installer Survey, the company found that 81% of the 590 residential and commercial installers surveyed don’t offer solar leases—an increase of nearly 30% from 2015—and 76% of respondents don’t offer PPAs. Only 4% of installers say PACE financing makes up more than 25% of their business with 79% of those surveyed not offering any type of PACE financing.
EnergySage surveyed installers in 46 states, the District of Columbia and Puerto Rico, and found only 8% don’t do any cash deals while 49% said cash financing makes up more than 50% of their business.
When Sungevity filed bankruptcy, its customers ran into highly publicized issues with their leased systems. Some systems stopped performing, customers couldn’t find help and leases couldn’t be broken. As solar customers and installers both become smarter about financing, the safer and wiser choice will be to buy systems outright or work out a loan.