SolarCity Providing Zero Down Financing

June 21, 2013 –  SolarCity,  the California company that finances and installs clean energy systems launched a zero-down financing program for builders.  The program is available in California, Arizona, Colorado, Maryland, New Jersey, and Oregon.  Later SolarCity will expand the program to up to 20 markets, says Walter Cuculic, the company’s national manager of builder programs.

SolarCity wants to capture a bigger share of the growing third-party financing market for residential solar energy.  SolarCity alone raised nearly $2 billion from investors for this purpose, including $500 million from Goldman Sachs and $280 million from Google.  In December, Solar City also raised $92 million from its initial public offering of common stock.

Demand for residential solar energy continues to rise in certain markets, along with demand for financing. The California Solar Initiative reported that sales of new homes with solar systems in California doubled last year to 4,000 units, or 10 times more than seven years ago. San Jose, Calif.-based SunPower Corp. recently installed its 10,000th solar power system onto a new production home. That house, built near San Diego, was sold in June by KB Home.

California represents more than 40% of total photovoltaic panel demand in the U.S., according to NPD Group’s Solarbuzz, which  reported that panel demand should grow significantly this year, and residential and small commercial rooftop installations would account for 18% of that demand.

SolarCity previously had been offering zero-down financing options only to homeowners through power-purchase agreements or solar leases.  Builders had to ante up a full prepayment before they could integrate one of SolarCity’s systems into their new construction. A prepayment for a 4-kilowatt system could run $7,000, says Cuculic, which inevitably the builder would tack onto the price of the house. That added cost would sometimes put the house out of budgetary reach for some home buyers.

SolarCity believes its zero-down financing program will “help builders meet their aggressive construction timelines and stay within their budgets,” says Cuculic. SolarCity also has dropped its credit score requirement for financing. “Now everyone can qualify,” Cuculic adds.

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