Solar leasing has dominated the residential and commercial solar markets in places it’s been introduced in the US. Now, the innovative financing model for going solar has made its entrance into France.
Solar module manufacturer Upsolar has take the proactive step as the one to first bring the model to the French people. Its new Pass Locasolaire program lets homeowners benefit from leased solar panels on their rooftops for up to 20 years.
The solar panel systems can be 6 kW to 9 kW in size. The specifics of the program are a bit different than in US markets. From an email to sent to me the other day, here are some of the interesting specifics:
“During the first year of operation, Upsolar will offer participating homeowners up to €500 for rooftop rental. Each year thereafter, participants will receive a payment equal to 15 percent of the generated power’s value. Alternatively, participants will have the option to purchase their systems after one year of operation.”
Interestingly, even the way the leasing company talks about its offering is a bit different from how US companies talk about solar leasing.
“Our rooftop leasing program allows homeowners the unique opportunity to monetize an otherwise unusable area of their buildings. Essentially, we are rewarding participants for doing nothing while boosting France’s share of renewable energy,” said Sébastien Prioux, Project Development Director with Upsolar. “Consumers in France are already growing accustomed to sharing resources – everything from cars to Playstations – to save money and live sustainably, and Pass Locasolaire is the logical next step.”
I had several questions related to this news for Upsolar, which I passed along to them about 13 days ago. The rep that initially contacted me about the news said she passed my questions along, but I’m yet to receive answers back, so I’ll simply post those questions here and publish an update if I ever get a reply.
Update December 7: the answers have been provided, so I’ve pasted them in below.
Q 1. In the US, the way solar tax credits are set up makes solar leasing and solar PPAs quite logical and attractive tools for the rooftop revolution. Sometimes, solar leasing companies can take advantage of tax credits that homeowners wouldn’t qualify for. How do French solar incentives work with this model? Is there any particular benefit/incentive available to a solar leasing company that householders perhaps wouldn’t be able to take advantage of themselves?
A 1. The French leasing company installs panels and is the owner of the installation. All the electricity produced by the system feeds into the grid and the local utility “buys” it from Upsolar vis-à-vis the FIT. Upsolar “rents” the rooftop from the homeowner by paying an annual rent to the homeowner, a proportion of what is earned from the FIT. The FIT for BIPV in France is still pretty interesting (currently 29c€/kWh).
Solar incentives in France do not provide any additional advantages to solar leasing companies over homeowners. The BIPV FIT is accessible for both homeowners and companies alike. The model works because of the challenges that homeowners face globally – not being familiar with the technology and high fixed costs, and because of the expertise and resources that leasing companies bring to the table. We can appease many of their concerns about the long-term performance/return of their systems, tracking incentive policies, and financing by doing the work, eliminating risk, and remaining a partner throughout the lifetime of the project.
Q 2. In the US and Poland (where I currently live), I know that people are quite averse to paying a lot up front for something, and are also averse to taking out big loans (if they are even able to). I’m positive these are huge reasons why solar leasing has done so well in the US. I imagine this is the same in France, and I’m just wondering if these common aversions, and the way solar leasing goes around them, were the main impetus for Upsolar’s decision to diversify in this way. If not, what pushed Upsolar to go down this road?
A 2. The relative advantage we have to open up the residential rooftop market through our service is certainly one of the reasons we decided to take this route. There is momentum working for residential markets that we believe we can contribute to and benefit from at the same time. The other reason is the largely untapped French residential market. The incentives offered in neighboring regions- Belgium, the Netherlands and Germany, for example – are lower than the ones offered to the French market, yet a higher proportion of their rooftops are solar PV-equipped.
Q 3. Different solar leasing companies use different methods for acquiring customers in the US. What methods to you intend to use for customer acquisition in France?
A 3. We are working with our extensive installer and agent base to get the word out, executing mailing (and possibly social media) campaigns, participating in exhibitions and reaching out to industry media.