The share of third-party ownership (TPO) of residential solar, which has grown from 42 percent of the market in 2011 to 66 percent in 2013, will peak in 2014 at 68 percent. Beginning in 2015, the expansion of residential solar loan programs and alternate financing mechanisms such as property assessed clean energy (PACE) will drive the trend line back toward direct ownership, while the share of TPO will fall to 63 percent by 2018.
“Solar loans are becoming widely available with many more options to choose from than in the past, and declining systems costs are making direct ownership affordable for more homeowners,”
All portions of the residential market will experience rapid overall growth, and TPO providers will need to raise over $26 billion from 2014 through 2018 to fund consumer demand for solar leases and power purchase agreements. To date, TPO providers have announced $9.5 billion in project funds.
FIGURE: National Share of Third-Party vs. Customer-Owned Residential Solar
Source: U.S. Residential Solar Financing: 2014-2018 (http://www.greentechmedia.com/
The landscape of residential solar finance providers continues to evolve. Major trends include an increase in vertical integration, with companies such as NRG and Sunrun adding installation to their business model, and the addition of loan options to many TPO providers’ portfolios.
FIGURE: Residential PV Financing Landscape, 2013 vs. 2014
Source: U.S. Residential Solar Financing: 2014-2018
“The residential solar financing market remains just as complex as ever,” said Litvak. “The recent trend has clearly been toward vertical integration -- the SolarCity model -- but we expect companies such as Clean Power Finance to retain their pure focus on financing and services for smaller installers.”
According to GTM Research, the U.S. residential PV market will exceed one gigawatt for the first time in 2014.
For more information on the U.S. Residential Solar Financing, 2014-2018 report, please visit: http://www.greentechmedia.com/
About GTM Research:
GTM Research, a division of Greentech Media, provides critical and timely market analysis in the form of research reports, data services, advisory services and strategic consulting. GTM Research's analysis also underpins Greentech Media's webinars and live events. Our coverage spans the green energy industry including solar power, grid modernization, energy storage, energy efficiency and wind power sectors.