Verengo used to offer a lease with zero money down. Now, in order to still make money on a job, Verengo would have to charge customers $4,000 to $5,000 upfront, a proposition that is "unsellable," Verengo President Ken Button said.
Other companies, such as SolarCity, are trying to entice customers in other ways. SolarCity plans to leverage its Energy Efficiency Services, which helps customers to upgrade to more energy-efficient appliances and heating and cooling systems that are eligible for state and local utility rebates. Solar becomes part of a larger effort to help customers reduce their electricity use and pocket additional rebates.
But some installers, particularly those that specialize in third-party systems, say the math no longer makes sense. To continue offering solar installations with no or little money up front would require an increase in leasing fees. In L.A., the result would be monthly charges that exceed homeowners' old electric bills by 25% to 30% — again, a difficult proposition to sell to prospective customers, installers said.
Supporters of the newly reduced rebates point out that the program is funded by DWP customers, so although higher rebates would be nice, they would require extracting more money from all customers at a time when rates already are expected to rise. DWP has proposed increasing electricity rates an average of 5.6% annually for the next three years, beginning Nov. 1. That alone should drive demand for solar, officials said.
"Everyone knows electricity prices are going up," DWP's Webster said. "It's only upward pressure on electricity. From an investment perspective, solar is a very, very safe investment."
So, while electricity prices go up and rebate amounts head down, solar-panel installers keep pressing for ways to lower the cost of going green. Sun Run advocates governmental reform to cut the waiting-in-line time for permits. Other installers are embracing technology.
Sungevity, a solar lease provider based in Oakland, uses aerial photographs from the Internet to design solar installations, rather than sending staff to the site. Sungevity looks at how panels would be best positioned, uses customers' utility bill data to estimate the rebate, then emails its quote to the prospective customer.
The push for innovation is likely to continue here, where demand has long been strong. California accounts for half of all solar installations in the country. And since 2006, the number of solar installations in L.A. has increased 1,594%.