NC trend: On the bright side
By Bryan Mims
Sunlight Financial is basking in its moment in the sun, thanks to a burst of funding and a brightening residential solar-energy market.
In November, Virginia-based Route 66 Ventures promisedto lend as much as $130 million to Sunlight’s customers. Sunlight has more than $500 million in capital for lending, allowing the Teaneck, N.J.-based company to meet residential demand that is growing by more than 20% a year, CEO Matt Potere says.
The company was founded in 2014 to provide loans to homeowners installing solar-energy systems. In August 2015, it hired Potere, a former Bank of America executive. After commuting from his home in North Carolina to New Jersey for a few months, he opened an office in Charlotte in December 2015 to tap into a labor market rife with financial expertise. He expects to have 60 people working at the Charlotte hub this year, three times the number on staff at the end of 2016.
The sunny outlook comes as some residential installers have foundered. Last May, New Jersey-based NRG, one of the nation’s largest independent power providers, laid off 500 employees and has ditched the residential solar installment business. California-based Sungevity filed for bankruptcy in March after laying off workers. But Potere is unfazed by installer struggles.
“It’s a relatively young industry,” he says. “It’s growing rapidly, and there has been some consolidation, and there have been some companies that started and are no longer in business. We’ve been fortunate in that we’ve chosen partners very intentionally where we have long-term relationships that help support their growth.”
The residential solar market, he says, is pivoting away from lease deals and power-purchase agreements with installer companies. In these arrangements, residents don’t own the panel systems; rather, they pay for the electricity generatedfrom their rooftop equipment. But increasingly, homeowners prefer to own the solar arrays outright, especially in states such as North Carolina that don’t allow leasing plans with solar panel installers.
A typical home solar system costs roughly $30,000, with purchasers getting a 30% federal tax credit. Sunlight Financial offers a loan through installer companies such as Sunrun and SolarCity. The loans are processed in Charlotte. It’s ironic considering North Carolina is a surprisingly feeble market for residential solar even though it ranks second behind California in utility-scale solar production. North Carolina fell to fifth place for new projects last year, according to a report from the Solar Energy Industries Association. Potere says the regions with the greatest demand for residential systems are the Southwest and the Northeast, fueled by high utility rates and, in the case of the Northeast, aggressive renewable energy campaigns. SEIA says 1.3 million U.S. homes have solar.
“To date, we have not seen significant volume in the state of North Carolina,” Potere says, due to relatively low utility rates and the lack of state incentives. “Many years ago, solar may have been something people did because of purely environmental reasons. Now, it’s a significant economic benefit, which will help it be adopted on a mass scale and help us to deliver those economic benefits.”