Electricity bill switchers turn focus to rooftop solar leases | RenewEconomy

Electricity bill switchers turn focus to rooftop solar leases

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Rooftop solar is hitting the mainstream as specialist “bill switchers” turn their focus to solar lease offerings.

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Group switching business One Big Switch has partnered with Sungevity Australia to introduce a 15-year solar lease product to its member base. Over 30,000 One Big Switch members have already expressed interest in taking up a Sungevity solar lease, and One Big Switch intends to introduce the offer to its membership base of half-a-million Australian households.

The emergence of solar leasing into Australia has been observed as being a key factor in the evolution of the solar industry in the country. Earlier this year Deutsche Bank cited the growth of solar lease offerings in Australia as being a driver of installation growth in 2014.

Only a few weeks into the new year solar leasing in Australia has received another boost, in the form of the Big Solar Switch campaign, which hopes to introduce leasing to big numbers of Australians. The 15-year lease offered in the campaign will be rolled out with Sungevity Australia, with its figures showing that households will begin saving on electricity bills as soon as the solar array is installed, in almost every region around the country.

“We think that the 15-year model is going to allow people to save on their electricity costs,” said Big Solar Switch campaign director Joel Gibson. “With the exception of the ACT, there is no zone that a household won’t save in the first year of the lease agreement.”

One Big Switch commissioned electricity market analysis to assess the potential savings the 15-year Sungevity solar lease can deliver. While varying from state to state, and retailer to retailer (for those households in states in which electricity retail competition exists), the figures show that savings between around 20% to 30% will be achieved on grid kWh rates.

The figures show in Queensland the kWh saving will be 25%, NSW between 16% and 33% depending on retailer, Victoria between 4% and 20%, South Australia 41%, Northern Territory 28%, Western Australia 17% and Tasmania 10%. It must be noted that these savings will only be achieved during daylight hours, when the solar PV array is producing.

While One Big Switch members also have the option of purchasing an array upfront or take up another lease or loan product, Sungevity Australia developed the 15-year lease model specifically for the Big Solar Switch campaign. Sungevity Australia’s Nick Lake says that the campaign will drive down customer acquisition costs for the firm and also introduce the savings solar can deliver on electricity bills to a big number of Australians. “The One Big Switch team have got a great media team and good media links and are able to take a message further than we are able to reach ourselves,” said Lake.

Since launching in July 2011, One Big Switch offers group switch discounts to its member base on a range of products from banking and health insurance, to internet access and home loans. It’s ability to reach a wide number of households through its membership base and media campaigns could be a major push to solar leasing in Australia.

One Big Switch has come under fire in the past for overstating claims regarding the savings it can deliver through switching electricity retailer and for having cosy relationships with some parts of the broadcast and print media. Big Solar Switch’s Joel Gibson says that this doesn’t apply to the solar campaign.

“Whatever those criticisms may have been in the past, they don’t apply to this campaign because there is no media partner,” said Gibson. He also notes that One Big Switch had not paid for media partnerships for any of the past campaigns.

Sungevity will be paying a commission for the Big Solar Switch hook up. Gibson says that One Big Switch is open about its commission arrangements and the fact that it is a commercial venture. “We’re a business, there’s no two bones about that, we think that makes us better at what we do.”

One Big Switch looked at around 40 solar companies to provide the lease offering as a part of its solar campaign. The decision to go with Sungevity was based on the firm’s remote system design and online quote tool and its ability to service households right around the country.

Sungevity’s Lake said that a lot of effort has gone into ensuring the solar lease offering is clearly communicated to One Big Switch Members, to ensure there is no confusion about the savings that can be delivered. “There have been a lot of conversations about the offer being well presented,” said Lake. “So we’ve really tried to eliminate any doubt or misunderstandings about what we’ve got to offer.”

Sungevity will install Trina or Canadian Solar modules with PowerOne or Samil inverters under the 15-year Big Solar Switch campaign.

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8 Comments
  1. juxx0r 6 years ago

    If you can pay off a solar system in less than 5 years, then isn’t a 15 year lease a really bad way to finance solar?

    • Motorshack 6 years ago

      If you have that kind of capital available, then it is probably cheaper to buy your own equipment (and pay for your own maintenance).

      The point is that even folks without that kind of money, but who will nevertheless be paying for electricity every month, will still save money on their power bills.

      In short, the comparison that you are talking about is not the one that will actually drive such deals.

      • juxx0r 6 years ago

        Paying it off in 5 years, was with borrowing the money, it’s about 4.5 years actually. So they could do a 5 year lease and still make money, but they don’t, they do a 15 year lease just to extract more money from you. Remember, solar has one of the best rates of return of any investment in this country:

        https://reneweconomy.com.au/2014/graph-of-the-day-rooftop-solar-returns-outstrip-stocks-property-34573

        And they need you to get more of it for them.

        • Motorshack 6 years ago

          Yes, I too allowed for the possibility that one might borrow the capital. Moreover, we are much more in agreement than may be obvious from my brief comment. My attitudes about thrift border on the religious, and personally I would not touch either a lease or an interest-bearing loan.

          My chief point was only that the fifteen-year lease is still cheaper than paying full retail for electricity from the incumbent power companies. So, for most people it would be an improvement on their present circumstances.

          In addition, for many people it will be the best deal they can get, so they will take it.

          At the same time, I fully agree that there will be many who could get an even better deal, but who will be too ignorant or too lazy to do so. No doubt about it.

          Our only real point of disagreement is the assumption that anyone who wants a loan will be able to get one. That strikes me as unrealistic.

          • juxx0r 6 years ago

            You’re right, but someone should say, hey, wait a minute. That’s not a great deal, it’s not a good deal, it’s a deal that can only come about because someone has you over a barrel.

          • juxx0r 6 years ago

            So I signed up, they’re offering me 22 cents for my daytime power usage, currently it’s 26. My calcs show the LCOE with a solar system in my area at 9.1 cents. So they’re taking 12.9 cents and giving me 4 for every kWh.

            I think it’s a shit deal.

          • James 6 years ago

            And folks this is why solar leasing won’t work in Australia…….its just too easy and cheap to own. Easy being the key point, no permitting requirements / tax equity credit organisation nightmare like in the the US of A.

            Leasing just doesn’t make sense

          • Bmozza 6 years ago

            I’m pretty well acquainted with residential solar financing arrangements and yes not everyone would qualify but short of being unemployed nearly anyone would qualify – a 2 or 3 year financing deal is easily available to most people and is far far superior to this lease arrangement.

            Given the number of solar businesses that approached Big Switch I’m more than surprised they went with this funding model for their cherished customers as it is not a good deal for them – not sure what is meant by reference to maintenance of system under lease agreement as solar systems are near maintenance free.

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