Solar Power Is Now an Option for Even the Most Cash-Strapped Suburbanites

Say hello to the thing that could save our sun-splashed suburban lifestyle: affordable residential solar power that puts roof-top solar panels within reach of the most cash-strapped America consumer. This breakthrough is not a result of technological innovation, but a new financing scheme cooked up on Wall Street called a "residential solar lease," a no-money-down, low-monthly plan that has made solar electricity cheaper than the stuff we get by wire. It's an old approach to a new source of energy, and it is taking California by storm.

"Go solar for $0 down. Now you can afford to go solar without the high initial cost of installing a system. Instead of buying the equipment, you simply lease it,"  boasts the Web site of SolarCity, a well-financed Silicon Valley start-up that has been pioneering the residential solar lease.

A solar lease is a fairly simple arrangement that is not unlike a car lease. Instead of dishing out tens of thousands of dollars upfront to buy and install a rooftop solar array, homeowners simply borrow one for a low monthly fee. Like a car lease, customers sign a contract that locks them in for a specified period of time with the option of extending their lease or buying the panels at the end of the contract. It makes sense when you consider that a typical homeowner would have to cough up between $20,000 and $50,000 to buy and install a solar panel system. A solar lease, on the other hand, would only cost them somewhere around $100 a month.

California, the world's third-largest solar-power market, saw twice as many people file for solar power permits in 2009 than in 2008, with much of the surge in demand being driven by this newfangled solar product. (Demand is so high that a black market for stolen solar panels has sprung up in the Golden State.)

SolarCity, one of the first companies to aggressively market solar leases, signs people up for 15-year contracts that run an average of $110 a month (with a 3.5-percent increase every year). SolarCity says customers can typically expect to shave 15 percent off their electricity bill from day one, with savings potentially growing over time if energy costs continue to rise. Competing companies -- like SunRun out of San Francisco or American Solar Electric out of Scottsdale -- offer the same basic deals.

A $100 electricity bill is a steal for California, a state that takes fifth place for highest electricity rates in the country, especially for the millions of people who inhabit the southern, sun-baked reaches of the state.

“My bill goes over $200 during summer when we keep the central AC going twelve hours day,” explained Paul Bosacki, who sits on the city council of Hesperia, a rustic, sprawling exurb on the edge of the Mojave Desert 90 miles east of Los Angeles. Bosacki was the first -- and so far the only -- person to sign up for SolarCity’s lease program in his town, but he won’t be alone for long. Because now he pays $89 a month and gets all the juice his household needs, while saving $21 dollars off his average electricity bill. 

We walk around to Bosacki's backyard, where a single Joshua tree keeps watch over a jacuzzi and a panoramic view of the Mojave Desert, and he gives me a tour of his solar system: a slim grid of black panels on the roof and a box that converts its electricity to proper voltage. Bosacki might have to spend a couple of bucks a month on additional electricity from his local utility in the summer, but in the few months he’s had the system, he’s been well in the clear. “I turned it on in September and haven’t gotten a bill since," he says, adding that he would never be able to afford the $40,000 his solar setup retails for without the solar lease.