Rooftop solar PV will reach grid parity in 50 US states by 2016, enhancing an increase in the uptake in household and commercial rooftop solar, reports RE new economy.
Declining system costs, customer acquisition costs, financing costs and rising volumes should drive significant scale benefits, predicts, Vishal Shah, solar industry analyst, Deutsche Bank as reported on the newly listed Vivint Solar.
Vivint Solar is the number two installer in the US and Deutsche Bank considers its prospects are so good that it will at least double its sale in each of the next two years.
Due to a continued fall in installation costs of solar, the cheaper cost of finance as new financial models attract more mainstream funding, and assuming that the attempts by utilities to curtail the proliferation of solar are resisted in US market, according to the report.
In 2013, the US installed around 1GW on residential rooftops, higher than Australia, with a fraction of the population. But in the next three years the installation rate is expected to raise six fold by 2016. (as shown in the graph).
In addition, Vivint, with 130MW of installed capacity at the end of June will have more than 4GW by 2020. It is an offshoot of a home security company that has used its customer base and customer service model to attack the residential solar market with considerable success.
Vivint prefers door to door marketing and sale and uses a unique power purchase agreement model that sells it solar electricity at an average of 14-15c/kWh, at a discount of 15-30 per cent below the utility price in its markets.
Company enters into a 20 year contract with customers with no or little up front fees. There is a 2.9 percent annual escalator, which may come down and is expected to track below rising utility prices.
Currently, it only operates in 7 states, like the north east, California, Arizona, and Hawaii where electricity costs are high. However, its target market will expand as solar costs continue to fall and grid prices rise in other states as Deutsche expects the fragmented solar market to consolidate rapidly in coming years.
Sabeena Wahid
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