The largest solar installation company in Arizona entered the lending business this week as a way for more customers to own their solar systems.
San Mateo, Calif.-based SolarCity Corp. rolled out the program, dubbed MyPower, on Wednesday in Arizona and seven other states, according to a company statement. It’s also a way for new solar customers to bypass the Arizona Department of Revenue’s decision to stop offering a tax exemption to those who lease their solar systems.
Arizona’s estimated 20,000 solar customers are exempt from paying state property taxes on their solar arrays. But last year, the DOR reinterpreted the exemption and determined it doesn’t apply to leased systems.
Beginning next year, the tax exemption is expected to go away for roughly 80 percent of the state’s solar customers, or about 16,000, who lease.
Solar advocates said leasing is usually the only way people can afford to go solar. They argue that revoking the exemption for leased solar puts an unfair financial burden on lower-income households while wealthier households who can afford to buy the systems outright still get the tax break.
The controversy prompted SolarCity and another solar installation company called Sunrun Inc. to sue the DOR in the Maricopa County Superior Court this summer.
While that case still is pending, SolarCity has found a way around the problem through the MyPower program.
It works similar to when a consumer obtains a loan from a bank to buy a house or a car, but the title still is in their name. People can own solar systems through financing from SolarCity and the loans carry 30-year terms, a minimum 4.5 percent-interest rate and monthly payments determined by how much energy the systems produce.
Customers would also be eligible for a federal tax credit worth 30 percent of the system’s value, and be able to take advantage of Arizona’s property tax exemption on solar.