When people think of sunny California, they often think of the beaches of Southern California. If the last few years are any indication, however, the place they should be thinking of is the city of Oakland, across the bay from foggy San Francisco.
In the past few years, Oakland has become a hub for the businesses making the largest impact on the U.S. solar market. No, not the technology firms struggling to keep up with the low prices from China, like GE or the ill-fated Solyndra, but the retailers, developers, and financiers who are making it easier than ever for anyone to put solar on their rooftop.
On the waterfront at Jack London Square, the 300 employees at Sungevity’s headquarters have doubled solar sales annually for the past three years. Their business model is to design and estimate solar installations – to make the sale to consumers – but not to actually install the panels themselves, which is handled by local contractors. Sungevity has two advantages: a robust website, which allows office workers in Oakland to model remote houses using satellite data, and its leasing agreements. From an office cubicle, Sungevity can tell a client what solar system may make sense for his/her location and how much it will cost, or it can lease it to this person as well.
Financing is the innovation that Oakland brings to solar. Many homeowners and businesses alike, have for years avoided the upfront cost for solar panels, which can still chart in the tens of thousands. Sungevity works around this problem by offering a lease to customers – they can pay a monthly rate to Sungevity for the panels instead of any large down payments (eventually they will recoup the cost through utility savings). Another company down the hallway from Sungevity, called Mosaic, gets around that problem by bypassing the lease completely.
Mosaic works with developers to refinance solar installations, then offers that debt to the crowd in the form of a note with interest. Each month, Mosaic’s investors receive the returns from the electricity the panel either sells to the grid or reduces in on-site utilities, and developers get a favorable financing agreement that lifts much of the cost burden off their shoulders – which makes them increasingly comfortable about installing more solar. Since Mosaic performs heavy due diligence on projects, one of their selling points is faith in the brand. So far, Mosaic has financed quality panel installations on military bases, businesses, agricultural land, and community centers and has to date received 100% on-time repayments.
Funnily enough, to call Oakland, California a place of radical revolution is approaching cliché. The city has been home to activist types and hippies calling for clean energy ever since the Grateful Dead. But maybe this time – the real revolution will happen, and it will come from the new solar financiers.