Home » Solar » US solar market likely to be hit hard by shifting economic forces

US solar market likely to be hit hard by shifting economic forces

US solar market likely to be hit hard by shifting economic forces

By BizLED Bureau

June 3, 2016: Although 2016 has been forecasted to be a great year for utility-scale installations and rooftop solar, shifting economic forces seem to cause stir across solar market in the US, particularly for giants like Sunrun and Solarcity.

So far, expansion in domestic rooftop solar has mainly been driven by leasing models wherein the installers possess the panels and house owners make payments on a monthly basis that can extend up to 20 years. But price fallout and the increase in the number of lenders eager to finance solar procurement combine to make owning panels an extremely reasonable option for customers.

US solar market likely to be hit hard by shifting economic forces

All such factors definitely have brought in bad news for solar giants such as SolarCity and Sunrun that dominate the residential solar market in the US these days.  Both firms have put up their businesses around long-term leases, and third-party ownership of rooftop solar stood at 72% in 2014.

READ ALSO: Solar-powered Li-Fi technology can revolutionize ‘digital’ India, says Harald Haas

However GTM Research predicts that the figure will reduce drastically by 2017. Also, a report by PwC said that a convergence of deteriorating hard and soft expenses, altering public policy, and increasing availability capital means that purchasing solar panels will provide more value than leases to the customers.

READ ALSO: Intertek sets up laboratory for LED testing in New Delhi

Both forms have been hit hard by investors this year. The share price of SolarCity, which reported a first-quarter net loss of $25 million, is down 53% in 2016. Sunrun’s stock is down nearly 50%. At the same time, SolarCity appears to be altering its offerings in expectation of ownership eclipsing leases in the not-too-distant future, Sunrun CEO Lynn Jurich has said its business will carry on to be about 80% focused on leases.

Pin It

Leave a Reply

Your email address will not be published. Required fields are marked *

*