Firm that makes solar electricity to expand

A California company that installs solar electricity systems on homes and businesses is expanding to the Valley, promising to revamp the economics of solar energy through a leasing concept.

SolarCity, based in the San Francisco Bay area, was formed on July 4, 2006, and since then has installed more than 1,000 photovoltaic systems in California, including at the eBay headquarters in San Jose, said SolarCity founder and chief executive Lyndon Rive.

Photovoltaic panels generate electricity when exposed to sunlight, and they can typically provide a substantial portion of the power needed to run a home or business without emitting any pollutants.

The company will open a Valley regional headquarters on South 16th Street in Phoenix next month and will be able to install photovoltaic systems immediately across the Valley, Rive said. A separate program will be available for businesses.

SolarCity expects to hire a staff of up to 100 installers by the end of this year in anticipation of a surge in solar-energy installations, he said.

"Arizona has the potential to become one of the largest solar markets in the world," he said.

The company was attracted to the Valley by an Arizona Corporation Commission requirement that electric utilities obtain 15 percent of their energy supplies from renewable sources by 2025. Of that amount, 30 percent has to be produced by units installed directly at the home or business - called distributed generation.

To reach that goal, Arizona utilities have been offering rebates to home and business owners to help defray the cost of installing solar photovoltaic panels. But even so, it can take more than a decade of electric-bill savings to offset the hefty up-front cost of installing the system, which can be $20,000 or more.

Rive thinks he has a way to make solar more attractive financially. Instead of the homeowner buying and owning the system, SolarCity will pay for the cost of the installation, own the system and lease it to the homeowner.

In cases where the homeowner's monthly bill averages more than $150, the reduced monthly utility bill plus the lease cost is typically less than the homeowner's previous monthly bill, resulting in immediate savings, he said.

The only up-front cost to the consumer is a $1,000 initial fee paid to SolarCity.

"For the first time, solar is truly affordable," he said.

The 15-year lease agreement is custom-made for each home after a consultation that includes a measurement of the home's sun exposure and electric usage. The agreement can be transferred to a new owner if the consumer decides to sell the house during the 15-year period, he said. Because the homeowner doesn't own the system, however, the consumer doesn't qualify for any tax credits or utility rebates. Instead those go to SolarCity.

Interested home and business owners can obtain details at www.solarcity.com.

Valley economic development officials believe SolarCity could heat up the Valley's emerging solar industry.

"SolarCity is an innovative company, and its ... lease program will promote and accelerate the adoption of solar across the region," predicted Barry Broome, president of the Greater Phoenix Economic Council.