Home security company Vivint is entering the solar panel installation business with financing model that avoids the upfront cost.
The company, which used to be called APX Alarms, said today it is offering financing for solar through a plan in which the panels are installed for free and consumers purchase the electricity they produce at a 20 percent discount from the retail electricity rate.
Vivint Solar has secured $75 million in financing from US Bancorp that it will use for about 2,400 installations, as a complement to its home security and home automation services. Vivint has started in New Jersey and plans to expand to Hawaii, Massachusetts, and New York in the spring and then to other states, said Tanguy Serra, the president of Vivint Solar.
Solar financing has grown rapidly over the past few years, attracting a handful of specialized companies, such as SolarCity and SunRun. Now, companies outside the solar industry are offering residential solar leases, which is helping fuel the growth of solar in the U.S.
A new company called OneRoof Solar launched last month launched a solar lease through roofing companies which will install solar shingles. Vivint's Serra believes that more service providers will enter the solar financing business, much the way many companies rushed into the broadband market ten years ago.
The two common financing models are a lease, under which a consumer pays a monthly fee, or a power purchase agreement for the power the panels produce. In either case, the consumer ends up paying a lower monthly electricity bill. The installer owns and maintains the panels and takes advantage of the federal tax credit and state incentives for renewable energy.
Vivint Solar does the installation itself, using Canadian Solar panels equipped with microinverters, Serra said. The solar financing product is part of Vivint's expansion into home energy. For an additional monthly fee, the company offers consumers a remote-controllable thermostat and simple home automation package.