(Bloomberg) – SolarCity Corp. (SCTY) will offer loans for rooftop solar power systems in a bid to reach consumers who want to own the panels rather than lease them or pay cash.
No-money-down leases helped SolarCity become the largest U.S. supplier of rooftop solar power. Today it will begin offering 30-year loans in eight states including New York and New Jersey that are repaid through borrowers’ power bills, the San Mateo, California-based company said today in a statement.
Loans may offer a better deal for consumers than leases, said Chief Executive Officer Lyndon Rive. Under SolarCity’s current model, the company owns the equipment and the customers make monthly payments for power, an arrangement typically called a power purchase agreement or PPA.
“Once consumers understand it, they should prefer this product over a PPA,” Rive said in an interview yesterday. He estimates these types of loans will make up half the company’s business by mid-2015. “The total savings is greater than with a PPA.”