You Can Now Rent Tesla Solar Panels

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Elon Musk, Tesla CEO, announced via Twitter a plan to allow consumers to rent Tesla solar systems in certain states, including California. The effort bolsters Tesla’s attempt to gain market share in the consumer solar industry.

Prices for a Tesla solar system will start at $65/mo in California, with tiered pricing depending on the size of the system required.

Musk Tweeted that the new program would be “like having a money printer on your roof if you live in a state with high electricity costs.”

Tesla recently reported a continued decline in its solar installation arm of the company. In the 2nd quarter of 2018, Tesla reported that it installed 84 megawatts of solar capacity, vs 47 megawatts in the 1st quarter of 2019, and a disappointing 29 megawatts of installed solar capacity in the most recent quarter.

Solar installations have been facing pressure throughout the country, due to rollbacks in some states of generous installation incentives and federal tariffs on solar components manufactured in China. The entire solar industry has been under siege on many fronts, as the traditional power companies fight back against the advent of consumer-based home energy production.

Tesla has been trying to find its footing in the current economic and regulatory environment and bolster sales of its innovative, yet pricey, consumer solar systems.

Photo: Prototype of a Tesla solar roof – October 2016. (Courtesy of Tesla)

According to Tesla, the rental programs will initially target California customers of PG&E, Southern California Edison, San Diego Gas & Electric and the Los Angeles Department of Power & Water, with a starting monthly rent of $65/mo. The rental program will also be available in the states with prime locations for solar production: Arizona, Connecticut, Massachusetts, New Jersey and New Mexico. Monthly rent in these states should start around $50/mo.

The actual monthly cost will depend on the type of system required and the size of the home. A typical 1,000-2,000 square foot home will fall under the base price of $65/mo in California. A medium-sized home, at approximately 2,000-3,000 square feet would cost $130/month. For homes greater than 3,000 square feet, the rent would be $195/mo.

The rental option opens a brand new market for Tesla, among homeowners who want the advantages of solar power or who want to reduce their carbon footprints, but who may balk at the $10k+ installation price tag. For most, purchasing the system offers the greatest cost savings, as the cost installation is gradually offset by energy savings. Buyers of home solar systems also benefit from significant tax credits in the year installed, which can help ease the sting of the high price tag and help homeowners recoup their costs faster. Solar renters won’t have such benefits.

Musk agrees, stating on Twitter that it was “still better to buy” but “the rental option makes the economics obvious.” Musk posits that solar renters could save as much $500/year on energy costs.

Solar panel rentals through Tesla do not require any long-term contracts or solar cancellation fees. However, in the event of cancellation, the homeowner would be responsible for the removal  costs of the Tesla system, which would be in the range of $1,500.

If the rental concept takes hold, could a “rent-to-buy” option be next?

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