Solar Lease Service Market – Overview
- Solar lease is a contract service provided by solar companies to have a solar energy system installed on residential and small commercial buildings with little to no upfront costs. Within this contract, a solar system can be rented for the production of domestic electricity.
- Solar lease can also be defined as a Third-Party Ownership (TPO) financing model. In this model, the solar system is not owned by the homeowner but is leased out by the solar company for a specific period of time.
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- Solar lease service has gained traction in the solar marketplace, primarily because of its ability to leverage two key commercial tax credits for individual homeowners and service holders
- In developed markets leasing model has become one of the most popular methods which helps in enabling power consumers realize the benefits of solar energy system. In recent times more than 70% of consumers in developed markets who go solar prefer third-party ownership.
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Key Drivers of Global Solar Lease Service Market
- Growth in transition toward renewable energy is likely to provide immense opportunities to lease providers due to long term benefits of solar energy. This is expected to drive the global market for solar lease service during the forecast period.
- Business models and mutual financing options play a large role in driving the rooftop solar lease service market. In many areas, even though there is currently a pause in feed-in tariff support for rooftop solar systems, the market is still expanding with newly planned business models and financing options for solar roofs.
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- Government subsidies for solar power across the world can be leveraged by solar leasing companies. This is estimated to offer immense opportunities to the global solar lease service market during the forecast period.
Restraints of Global Solar Lease Service Market
- A lease can come with a term escalating or de-escalating payment plan. Leasing can help save money if the utility bill savings exceed lease payments. It is difficult to predict electricity prices 10 years down the line. Similarly, the cost of solar systems is also not easy to predict. This is likely to restrain the global solar lease service market during the forecast period.
- Low awareness among people in developing economies is another limitation of the solar lease service market. The number of service providers of solar lease is less in developing countries. This is expected to restrain the solar lease service market in the near future.
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- In April 2018, Sunrun expanded its home solar service to Illinois, the U.S. The lease service could benefit Illinois residents, as they would be able to generate their own electricity all year round with rooftop solar. This would also provide the residents with cleaner air, with monthly savings and freedom from rising utility bills.
- In October 2018, the North Carolina Utilities Commission (NCUC) approved Eagle Solar & Light, a solar energy company in Albama, the U.S., to become the first licensed solar electric generator lessor in North Carolina. Eagle Solar & Light has been active in North Carolina since 2016. It has offices in Highlands and Chapel Hill, North Carolina, the U.S.
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Europe to Hold Major Share of Global Solar Lease Service Market
- Based on region, the global solar lease service market can be classified into North America, Asia Pacific, Europe, Latin America, and Middle East & Africa
- Europe is likely to dominate the global solar lease service market during the forecast period. High investments, especially by governments of countries such as Germany, and technological advancements are projected to drive the market in the region from 2020 to 2030.
- The European Union (EU) aims to achieve 20% share of energy from renewable energy sources (RESs) in the final energy consumption by end of 2020. This is expected to drive the market in the region during the forecast period.
- On the other hand, the size of the renewable energy industry in the U.S. in North America is anticipated to double by the end of the forecast period. Renewable energy projects in the country are likely to benefit from multi-year federal tax incentives and several state-level policies that promote the use of solar energy in the next few years.
- Asia Pacific is projected to be a high potential region of the global solar lease service market during the forecast period, led by the rise concerns about air pollution and carbon emissions in India and China
Key Players Operating in Global Market
Major players operating in the global solar lease service market include:
- Solar Calculator
- Solar to the People
- Wholesale Solar
- Solar Power Authority
- Going Solar
- Vivint Solar Developer