PG&E To Spend $100 Million Financing Solar Panels for Customers

The cost of buying and installing solar panels is the biggest hurdle for most homeowners. PG&E is helping with this by budgeting $100 million financing solar panels for customers.

The credit crunch in 2008 nailed just about every form of financing available. This included bank financing for the purchase of solar panel systems on homes. The initial cost of buying and installing such systems can be large. Such financing makes the hurdle easy to overcome. Without it, many missed out on the opportunity to go solar.

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SunRun, Inc., is a solar company that takes a different approach. Instead of selling solar panel systems to customers, it provides them for a massively discounted rate. In exchange, the customer purchases the electricity being produced by the panels. When the customer wants to end the relationship, SunRun takes the panels back.

As you can imagine, this approach requires a lot of capital investment on the part of SunRun. Without credit available, the otherwise smart program was in serious trouble. Not now. PG&E has taken an interest and the two companies have come up with a creative solution to the financing problem. PG&E will provide financing to SunRun in the form of $100 million dollars to install up to 3,500 solar panel installations in the San Francisco area. The two companies will then split the profits.

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The energy industry is not exactly known for being particularly creative. The solar side of the industry is very much so. Companies realize the cost of buying and installing panels is a huge hurdle to people interested in going solar. Different companies have gone with different approaches that range from the SunRun approach to leasing to renting to tacking the cost on to mortgages and so on. It makes one wonder what the rest of the energy industry could do if it had such flexibility.

It is often said that trends start in California and then work their way across the country. Will this new approach catch on? One would hope so.

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