The global shift to cheap, clean energy is being driven, in part, by the rise of solar subscription services for households.
In the past, households wanting to install solar panels usually had to do so using their own capital, or with bank funding. This meant harvesting the sun’s energy was a luxury that few could afford.
But under the fast-growing subscription model, home solar systems are considerably more accessible because customers don’t need to finance installations themselves.
Otherwise known as the leasing or rental option, the model is accelerating the adoption of home solar systems from the Asia Pacific to Europe, the US, and more recently, the likes of South Africa.
In the US, solar-as-a-service giant Sunrun has now installed 6.2 gigawatts (GW) of capacity for nearly 900,000 customers. For context, that equates to the same nameplate generating capacity as six typical nuclear reactors.
A similar trend is underway in South Africa, which has been contending with 15 years of rolling backouts on top of above-inflation electricity price hikes.
GoSolr CEO Andrew Middleton says the subscription model is suited to households that don’t have idle funds at hand, and that prefer a complete power service rather than the traditional, direct-ownership model.
It’s one of many types of services that comprise the new technology-enabled “subscription economy”, Middleton says.
“The personal example I often use is that I used to own towers of CDs, but now all that music is aggregated by Spotify.”
Home solar subscription services are similar in nature to the power purchase agreements (PPAs) that mining companies and big solar farms often sign, for example. In both cases, they’re inclusive of maintenance, monitoring, support, and replacement costs.
By making bulk purchases of solar panels, inverters and batteries, companies like GoSolr benefit from lower hardware costs – allowing them to provide an affordable service.
Economies of scale and subscription agreements have been integral to the success of China’s state-led rooftop solar programme, which delivered 55GW of new capacity in 2022 alone.
Broadening access
GoSolr’s ‘small’ plan, which costs R1,399 ($73) a month, includes six monocrystalline solar panels, a 3.6kW hybrid inverter, and a lithium-ion battery with at least 5kWh of capacity. Designed for homes that spend less than R1,500 per month on electricity, the plan – South Africa’s cheapest – is helping more South Africans to directly reap the benefits of solar power, Middleton says.
He adds that ownership can still make sense for certain households – particularly those with excess capital, ambitions to add value to their properties, and a decent understanding of how to maintain these systems.
Regardless of the approach households choose to take, the surge in rooftop solar installations is delivering both financial and environmental benefits, while also relieving some strain on South Africa’s national grid.
And it’s early days yet for the country’s home solar market, despite an eye-watering surge in installations in the first half of 2023.
That’s equally true for the US. According to SunRun, which is now adding more than 1GW of new capacity each year, just 4% of US households have solar systems.
Australia provides a glimpse into the future, with one in three homes already covered in solar panels, thanks in part to the subscription model.
