(ThinkProgress) This is Google’s largest renewable energy investment to date.
It’s actually a pretty good business plan.
Here’s how it will work for the average person. The first step is you need to own a home. Then you work with SolarCity to design a customized system for your particular roof. They look at past electric bills and the rate charged by the utility, and guarantee a lower rate that locks in a lower monthly payment. For instance, if your normal monthly bill is $200, it could drop to $60 after the installation, plus $100 in the monthly solar rental, yielding a new average monthly bill of $160. Google’s initial investment pays for the system outright through a lease or power purchase agreement. You do not have to pay for the design or placement of the panels SolarCity installs and then maintains throughout the life of the lease.
Once installed, the panels generate renewable, clean electricity, feeding the grid mostly during times of the day where demand is high. The homeowner pays the lower monthly electricity rate, not worrying about rising utility bills or extra carbon pollution. Google and SolarCity pay to maintain the panels because they own them. Both companies pocket the income brought by sale of the power to the utility through net metering, as well as federal and state renewable energy tax benefits. At the end of the lease or rental term (usually 20 years), much like an automobile, you have the option to buy the system back, set it up as a loan, or let SolarCity take it back, no charge.
So while it is likely a better deal to pay for your own solar installation, earn the tax credits yourself, and begin saving money on electricity and try to make some selling extra back to the utility, not everyone can afford the initial price tag, which typically runs north of of $10,000
The beauty of this idea is that you don’t have to be Google to do something similar. If this succeeds, expect roofers, home improvement companies, and solar panel dealers to start offering similar programs. It really is a win-win.