There are 28 million SMBs in the U.S.
As I’ve been saying for a while, solar is taking over the world. Prices are dropping fast and the quantity of solar panels installed each year is going up exponentially. The trend is clear, and while the absolute numbers still seem low compared to the massive installed base of coal and natural gas, things are going to change rapidly in the coming years.
Save 5-25% on your electricity bill
One sector that has been neglected by solar companies so far and that should see rapid growth is the small and medium business space.
“When you fly into any airport, you see these industrial areas – what are small warehouses with small businesses in them – and there’s no solar,” CEO Lyndon Rive said in an interview with U.S. News ahead of Tuesday’s announcement. “We now have a solution that makes it cost-effective.” (source)
“There are more than 28 million small and medium-sized businesses in the U.S.—more than 99 percent of American businesses are SMBs—and very few have been able to use solar power affordably until now,” writes SolarCity. But so far, a big obstacle to overcome for SMB owners who want to go solar has been financing: SMBs don’t have access to the bond market and investment ratings like large businesses, and they don’t have FICO credit scores like individual people, making them kind of fall between the cracks of the system when it comes to these leases that need to be financed for multiple decades.
But SolarCity has figured out how to make the financing work, starting in California and eventually rolling out in the rest of the country. This, in combination with other ways to keep costs low:
Installation. While most commercial solar developers subcontract installation, which lengthens installation time and significantly increases cost, SolarCity leverages its vast network of local installation crews to install projects for SMBs at a lower cost than any other provider in the category. SolarCity expects to reduce the cost to install small commercial solar projects by more than 30 percent by using its own crews and technology.
Technology. SolarCity’s proprietary, lightweight solar panel mounting system—ZS Peak—allows SMBs to fit 20 to 50 percent more solar panels on each roof surface. ZS Peak also allows workers to install panels significantly faster than would otherwise be possible to reduce installation costs even further, and simultaneously increases solar energy production from each project.
The solar installer estimates that many small and medium businesses could go solar and pay a monthly leasing cost that is 5% to 25% lower than their current electricity bill with no upfront cost. Pretty good deal, eh? And that’s with a fixed monthly rate for 20 years, so as utility rates increase, the savings from going solar increase too!
So this is great news, and hopefully in a few years there are many more gigawatts of solar capacity installed on all those currently wasted small and medium business roofs!