Tesla has launched a new rental alternative for its solar panels in an effort to revive the declining solar energy business. The company offers the new rental plan in six states – Arizona, California, Connecticut, Massachusetts, New Jersey and New Mexico – and it will cost as low as $ 50 per month (plus tax) with no upfront or long-term contract costs. The monthly payment also includes support, maintenance, and all "other necessary hardware," although tenants must transfer any tax incentives or rebates to Tesla.
The new rental alternative is launched just months after Tesla cut prices across the board on its solar panels. In total, the two decisions show how Tesla is trying to rejuvenate its solar panel business, which has gone down over the three years since the company acquired the then market leader SolarCity. In July, Tesla announced that it released fewer solar panels in the second quarter of 201
Tesla's sales pitch to choose a rental alternative is that it will be cheaper, faster and less onerous for homeowners to get solar panels on the roof in the beginning. The company promises a "one-click" experience that is far simpler than the normal process, which Tesla says typically involves "lengthy consultations and piles of papers."
In all eligible states except California, Tesla will charge $ 50 per month for a “Small” 3.8 kW solar panel system that generates an average of 10 to 14 kWh of energy per day, $ 100 per month for a “medium” 7.6 kW system that generates 19 to 28 kWh, or $ 150 per month for a “large” 11.4 kW system that emits 29 to 41 kWh per day.
Monthly rates are higher in California; rents cost $ 65, $ 130 and $ 195 per month for small, medium and large systems respectively. It costs around $ 10,000, $ 20,000, and $ 30,000 to purchase Tesla small, medium, and large systems, respectively (directly included), depending on condition. (Tesla's Powerwall home battery still needs to be purchased separately and cannot be added to solar panel rental, the company says.)
Although the contract is not long-term, there are some limitations. Customers must own their home to have the panels installed. They can cancel the rent at any time, although they will be charged a $ 1500 fee, which all of Tesla says will go toward the cost of uninstalling the panels. ("Tesla does not make a profit on this," the company writes.) In addition, Tesla will impose the $ 1500 fee if a homeowner decides to downgrade from one of the larger systems to a smaller one. Owners can also purchase the system directly five years after it is up and running, according to the agreement.
increased at any time, according to the language of the subscription agreement. Tenants have up to 30 days to accept the change or cancel the subscription.
As in the case of leasing plans for solar panels (or more complicated "power purchase agreements"), tenants of Tesla's solar panels must provide "all tax credits, incentives, discounts and certificates" to the company. In Arizona, for example, this means that Tesla will earn between $ 4,021 and $ 10,063 per install in combined federal and state tax incentives.
The federal tax credit for solar panels currently covers 30 percent of total costs, although this incentive starts a multi-year phase-out beginning January 1, 2020. But even without the federal tax credit, customers who have the money to buy Tesla's solar energy Panel systems directly will eventually spend less on panel life. Depending on where they live and what system they buy, tenants of Tesla's solar panels will wind up using more than the direct purchase price after about 12 to 18 years of paying the monthly subscription fee (if it doesn't change).
SolarCity used to offer a solar panel leasing plan, which made it cheaper for homeowners to roll with home solar. But it was one of the features Tesla discontinued after it bought the company, and overall, sales of solar panels have been declining regularly in the years since. The company also closed installation centers and concluded an agreement with Home Depot in 2018, which helped market and sell the solar panels.
Tesla has spent the last few years showing a more futuristic (and more expensive) "Solar Roof" design, which involves replacing an entire roof with light-sensitive shingles. But the company is still stuck in the design and testing phase and has distributed a minimal amount of Solar Roofs. In the meantime, Tesla has built up a significant commercial energy production and storage business, which has helped to balance the revenue it lost as solar panel sales went down.