When Tesla bought solar panel manufacturer SolarCity in 2016 for $2.8 billion, solar panel installations were experiencing explosive annual growth in the U.S., having jumped from 246 megawatts installed in 2010 to 2,369 megawatts in 2016, according to GTM Research.
But with stalled growth in installations, Tesla is rolling out a new model for getting its panels on the roofs of homeowners—rentals.
Launching in six states—Arizona, California, Connecticut, Massachusetts, New Jersey, and New Mexico—Tesla’s rental program will offer three solar panel packages, with no installation costs and no time commitment.
Based on estimated annual energy generation, Tesla says the small (3.8 kW for $50 a month), medium (7.6 kW for $100 a month), and large (11.4 kW for $150 a month) solar panels are priced such that homeowners will net anywhere from $80 to $650 in annual savings.
The rental option is only available to homeowners and comes with a few caveats. First, renters must pass any tax benefits that come with installing a solar panel along to the company. According to the Verge, that can be anywhere from $4,000 to $10,000 in Arizona; this is likely why Tesla can offer free installation on rented panels.
Second, while renters can cancel at any time, it comes with a hefty $1,500 fee, which the company says will cover the cost of uninstalling the panels. If a renter wants to downgrade to a smaller panel, that also comes with a $1,500 charge. Third, Tesla reserves the right to raise the rent price, and with the $1,500 cancellation fee, it probably has some leeway to do that without losing current customers.
Curbed checked the sale price for the same panels Tesla is offering to rent and while it varies from state to state, the smaller panels can go for as high as $8,000 while the large panel sells for as much as $22,000. At the current prices, renters wouldn’t pay more than the sale price of the panel for at least 12 years.
SolarCity originally offered a rental option but it was phased after after Tesla purchased the company in 2016. Amid the broader slowdown of solar panel installations, Tesla slashed the price of its panels earlier this year in hopes of jumpstarting sales.
While Tesla roll out solar panel rentals, the company is still in the process of bringing its solar roofs to market. The roofs are made of individual solar tiles, just like a regular roof, so they can better conform aesthetically to the rest of the house and the neighborhood. Production on the solar roof tiles has been delayed at various points, but some installations have been spotted on social media over the last year.