Elon Musk’s company is now offering loans to their clients to own their solar panels for cheaper lease rates.
This loan, offered by Solar City, is called MyPower. It is paid back by the customer by paying for the energy produced by their equipment. And after 30 years, the power is free.
Here’s how it works…. according to Solar City founder and CEO Lyndon Rive, customers take out a 30-year loan on a solar power system at 4.5% interest. Solar City installs and maintains the solar system at no cost to the customer and the customer pays for the power — and in the process, eventually pays off the loan.
Typically loans available for homeowners to fit themselves with solar utilities are usually offered by third-party banks and municipalities in partnership with solar companies, and do not take into account how much power is being produced by the system. That means if the system under-performs, the customer loses money.
Instead, with Solar City’s direct financing, “you only pay based on the production of the system,” which Solar City will monitor and guarantee against drops in performance, Rive says.
One potential drawback to the MyPower program is that solar power will develop significantly over the years, both reducing in cost and rising in effectiveness.