When people have access to financing for home solar power, they’re apt to jump on board, according to a report just released by the American Clean Skies Foundation.

The report documented a surge of solar installations in states that allow third parties to relieve the heavy upfront capital costs for homeowners. It looked at both types of popular solar-financing models that provide homeowners with a path to acquire a solar array – solar leases and solar power purchase agreements, known as PPAs.

Leases, as their naming suggests, allow homeowners to simply lease rooftop arrays by paying a monthly fee for the equipment to a solar provider. The homeowner is able to pay the lease because the solar panels concurrently lower his or her electricity bill. The sum of the monthly lease and the electricity bill is likely to be even less than the homeowner’s pre-solar electricity tab.

A solar PPA works a little differently. A solar company installs a rooftop array and the homeowner agrees to buy back all the power from it over a set period of time (like 20 years). The homeowner remains attached to the grid, paying monthly bills to both the solar panel provider and to the municipal utility company, but again, still realizes an overall savings.

The report put out by the ACSF found that states that allow PPAs and solar leases have experienced a jump in homeowners installing solar panels.

Solar Leases on the Rise, chart

Chart shows the percentage rise in solar installations in California, Arizona, Colorado and Massachusetts, states where third-party financing of rooftop solar installations is allowed.

Here’s another graphic, showing the states (in yellow) that allow third-party solar financing, enabling allowing homeowners to participate in solar leases or PPAs.

Another key way that most US states reward homeowners who’re producing their own solar power is through net metering, which allows them to get money back from a utility when their rooftop installation produces an overage of power.
Solar 3rd_Party_PPA_map

Texas is among those states that allow homeowners to use a solar lease agreement, but not among those that have mandated net metering statewide.

Fortunately for Austin residents, Austin Energy does allow net metering; so Austinites have both incentives to install rooftop solar. Austin also is the state’s leader for using commercial solar power. San Antonio is right behind, planning for massive commercial solar installations.

 The report, Buying Green Power Today: Emerging Options for US Electricity Consumers, can be downloaded at the ACSF website.

The author, Geoff Bromaghim, is ACSF’s Energy Policy Research Associate.   gbromaghim@cleanskies.org.