Solar as a Service Providers Should Focus on Unlocking Value Otherwise Unavailable to Customers, According to Navigant Research

To survive, solar leasing providers could transform into virtual power plant providers and benefit from new revenue streams, report finds

BOULDER, Colo.--(BUSINESS WIRE)--A new report from Navigant Research examines the weaknesses of different business models for solar as a service (SOaaS) providers, offering sustainable alternatives that allow providers to stay competitive in a changing solar energy environment.


Following a recent decline in solar leases and power purchase agreements (PPAs) in California (which represents roughly 60 percent of the US market), traditional SOaaS players began joining financial players and offering loans instead of leases as a way to retain market share. However, to increase their long-term survival prospects, players must find a way to unlock non-energy related revenue, and ideally in a way that creates win-win situation for solar service players. Click to tweet: According to a new report from @NavigantRSRCH, SOaaS providers should focus on unlocking value otherwise unavailable to customers.

"SOaaS was popularized in the US between 2010 and 2015 and it seemed that solar leases were going to be the winning business model, allowing large players to both increase the market size and displace local installers," says Roberto Rodriguez Labastida, senior research analyst with Navigant Research. "But since the share of solar leases and PPAs plunged in 2015, Navigant Research does not expect that the trend against leasing will reverse and anticipates that the revenue that SOaaS players receive per watt of installed capacity will decline as a higher share of installations move toward loans."

According to the report, transforming solar leasing and PPA providers into virtual power plant providers could be a viable way for SOaaS providers to increase their value to customers going forward. Strong consumer-facing brands like SolarCity, Vivint, Sunnova, or SunRun and their current customer relationship expertise could open up new revenue streams key for provider survival.

The report, Solar as a Service, analyzes the different business models for SOaaS providers. The study examines the weaknesses of the various current business models and suggests a more sustainable model that the industry could adopt worldwide. SOaaS contract options are discussed, with a focus on models that will enable SOaaS providers to remain competitive in a changing solar energy environment. An Executive Summary of the report is available for free download on the Navigant Research website.

About Navigant Research

Navigant Research, the dedicated research arm of Navigant, provides market research and benchmarking services for rapidly changing and often highly regulated industries. In the energy sector, Navigant Research focuses on in-depth analysis and reporting about global clean technology markets. The team's research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Energy Technologies, Utility Transformations, Transportation Efficiencies, and Buildings Innovations sectors. Additional information about Navigant Research can be found at www.navigantresearch.com.

About Navigant

Navigant Consulting, Inc. is a specialized, global professional services firm that helps clients take control of their future. Navigant's professionals apply deep industry knowledge, substantive technical expertise, and an enterprising approach to help clients build, manage and/or protect their business interests. With a focus on markets and clients facing transformational change and significant regulatory or legal pressures, the Firm primarily serves clients in the healthcare, energy and financial services industries. Across a range of advisory, consulting, outsourcing, and technology/analytics services, Navigant's practitioners bring sharp insight that pinpoints opportunities and delivers powerful results. More information about Navigant can be found at navigant.com.

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