Tesla is launching today a solar rental service – a brand new way to get a solar panel system on your roof for as little as $50 per month without any long-term contract.
SolarCity pioneered new models to sell solar power systems with no upfront cost by leasing them to homeowners and selling them the electricity it generates, like a regular electric utility.
The model created impressive growth, but it required them to pay for the costly systems upfront on most installations, which weighed heavy on their financials.
When Tesla acquired SolarCity back in 2016, it gradually moved away from that model in order to make the company more sustainable, but it also destroyed its growth.
Last quarter, Tesla’s solar deployment fell to a new low.
Now they are going to try to go back to growth with a very aggressive new solar rental service. This is not like SolarCity’s leasing options or Power Purchase Agreements (PPA).
Tesla’s ‘Rent Solar’ program is a month-to-month agreement to use Tesla’s solar power to reduce your electric bill.
For as little as $50 per month, Tesla will come to your home and install a solar system.
There’s no long-term contract. As long as you pay the monthly fee, the system will generate solar power and it will reduce your electricity bills.
Here are the base fees and projected returns in the markets where the new Tesla solar rental program is available:
|State||Monthly Rental (Small)||Estimated Annual Generation||Net|
Tesla’s “small” system is rated at 3.8 kW and produces an average of 9-12 kWh per day.
Homeowners can also directly purchase such a system for $9,500 before incentive, but now they have the option to pay nothing upfront and have the advantage of solar power for as little as $50 per month.
Bigger systems (7.6 kW and 11.4 kW) are also available on Tesla’s website.
Tesla is looking for the new financial product to help accelerate solar adoption and buyers could get the systems really quick.
Last month, we reported on Tesla’s new program to deploy solar power systems within 24 hours of ordering online.
This is an interesting new product that is probably the cheapest way to get solar power in most of those markets.
It’s a big departure from Tesla’s business model to focus on making money from solar installation. This new product results in Tesla having to pay upfront for the installation to get the long-term revenue.
That means that Tesla is sacrificing the profitability of its solar business again to go back to growth.
But the company is clearly really confident in its pricing structure because it is willing to install the system without any long-term contract.
They pay for the system upfront and install it for as little as $50 and if the customer changes its mind and wants to stop paying, Tesla will just de-energize the system.
It will even leave it on the customer’s roof. If they want it off their roof, they will have to pay Tesla $1,500 to remove it.
Of course, Tesla is betting that no one is going to want to do that because their monthly prices are so attractive. You would need to send more money to your electric utility than what you are paying to Tesla.
I look forward to see the impact of this new solar rental program on Tesla’s solar deployment.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.