Sun shines on solar leasing

While overall growth in the US residential solar market is slowing, there are signs that leasing will remain a significant force in the sector, according to a report from market analysis firm GTM Research.

Its latest report, US Residential Solar Financing 2016 – 2021, says that after four straight years of growth topping 50%, the US residential solar market is facing new challenges and will see a tapered growth rate of 16% in 2016. Not slowing, however, are solar loans and cash sales.

In 2017, direct ownership will overtake third-party ownership as more customers choose to purchase, rather than lease, their panels GTM Research forecast that 55% of all US residential solar capacity installed in 2017 will be purchased by customers paying either in cash, or through a solar loan financing arrangement; that proportion is expected to grow to 73% of all solar systems installed in 2021.

According to the report, third-party ownership through leases and power purchase agreements (PPAs) hit a five-year low of 56% in the first half of 2016. Solar leasing and PPAs, which in 2014 represented 72% of all solar installations, has been declining and is now expected to represent about 45% of all systems installed in 2017.

GTM had previously predicted that direct ownership of rooftop solar systems would not surpass third-party options until sometime after 2021.

From 2017 through 2021, consumers are expected to spend $24.7 billion on purchasing their solar power systems, much of which will need to be financed with a loan or a lease according to the report.