Just add sun
Company says its prices for homeowners are competitive with utilities
The nation’s largest solar company is about to enter the U.S. oil capital.
Thenation’s largest residential solar company is about to enter the epicenter of the world’s oil andgas industry.
Solar City on Monday will begin offering its rooftop solar systems in the Houston area, the company’s third Texas market, after Dallas and El Paso. The San Mateo, Calif.-based company said it will open a Houston warehouse soon and hire about 100 people for sales and installation.
“This is a big deal for us,” said Lyndon Rive, SolarCity’s co-founder and chief executive. “We’ve been eyeing the market for a while.”
SolarCity, which reported about $400million in revenue last year, has grown across the country with a business model in which it installs and maintains solar systems at nocost to homeowners, and sells the electricity to themat prices competitive with utilities and retail electricity firms. Solar City, which owns the systems, is able to claim the 30 percent tax credit offered bythe federal government, in addition to revenues it earns from solar installations.
In Houston, R ive estimates Solar City will be able to sell electricity for about 10 cents per kilowatt-hour, compared with local prices often ranging anywhere from 7 cents to 12 cents per kilowatt-hour.
SolarCity will also sell solar panels at costs of $15,000 or more, offering loans to finance them. If customers go with loans instead of leases, they can receive the federal tax credit. The rates start at 2.99 percent for a 10-year loan and4.99 percent for a 20-year. Potential customers can start ordering this week, with installations to begin in two months, Rive said.
SolarCity has considered the Houston market for some time, where fewer than 2,000 residential and commercial customers have rooftop solar, but it couldn’t make the economics work until recently, company officials said. One ofthe main challenges wasth estate’s deregulated power market, which doesn’ t require retail electricity companies to offer so-called net metering. Net metering allows homeowners to sell excess power generated by the solar panels back to the electric company, which offsets cost and helps residential solar compete with power from the grid.
SolarCity, however, found a partner in MP 2 Energy, The Woodlands retail electricity company that will offer net metering to operate as the retail electricity provider.
R ive conceded that savvy shoppers can now find lower retail electricity rates than SolarCity can offer because of the historically lowcost of natural gas, which generates about 50 percent of the state’s electricity. But he argued those rates won’t stay low over the long term as the price of gas ultimately rises.
SolarCity offers customers the opportunity to lock in competitive rates for 20 years, providing certainty and saving them the chore of shopping among the many retail electricity providers.
“If you’re the type of customer who wants to shop for a new retailer every year, then maybe solar isn’t for you,” Rive said. “Our product is designed for people who want stability and control.”
SolarCity also will sell in Houston the new Power wall battery storage system that’s built by Tesla. Thesystem stores backup solar power in case of outages or other problems.
El on Musk, Tesla’ s CEO, is also chairman of SolarCity. He and R ive, both South African natives, are first cousins.
Solar power has become more competitive as the costs of manufacturing and installing solar panels has come down. Manufacturing costs plunged 50 percent from 2009 to 2012 and installation costs have fallen by 5 percent a year since then, according to the National Renewable Energy Laboratory, a federal research lab.
Local solar companies like Sun nova and Texas Solar Outfitters have had some success, but Texas remains far behind in other states in residential solar.