SolarCity fronts homeowners

SolarCity, a privately-held, California-based solar energy system provider, announced in April a new financing program backed by Morgan Stanley that enables homeowners to lease solar panels with no money down.

In its initial offering of the program, dubbed SolarLease, the company required a $2,000 down payment. Within weeks, it changed the terms of the lease agreement, requiring $0 down. SolarLease is he nation’s first residential financing program provided directly by an installer.

SolarCity installs and maintains the solar panels over the duration of an initial 15-year lease. When the lease term is up, homeowners can continue leasing the panels or purchase the systems. By maintaining ownership of the panels, SolarCity can cash in on commercial tax credits, which are most significant in California, Oregon and Arizona. SolarLease is currently available to homeowners in California only, but the company plans to roll out the program in Oregon and Arizona in coming months, according to Peter Rive, Solar City co-founder and COO.

Currently, homeowners in most states cannot sell excess energy from their residential solar panels to their local utility. But that could soon change in California, where the state assembly is considering the Solar Surplus Power bill (AB 1920), which would require utilities such as Pacific Gas & Electric Co. (NYSE: PGC) to cut checks to homeowners that feed the grid. Rive notes the bill’s passing would not drastically affect homeowners unless it prescribes that excess electricity be sold at retail prices rather than wholesale prices.

SolarCity, which is venture-funded and employee-owned, has seven regional offices throughout California, as well as offices in Portland and Phoenix. The company’s staff of 10 has grown to 230 since October 2006, according to Rive. Since its inception, SolarCity has installed a total of 5.5 megawatts, split between commercial and residential systems.