Last month, SEPA released a new study titled, “Heating Up: The Impact of Third Party Business Models on the US Market for Solar Water and Space Heating.” The report profiled the emergence of a number of new and existing third-party options for financing solar water heating. While third party financing has potential to revolutionize the commercial SWH market, there are still a number of challenges holding back such financing mechanisms. However, existing industry players and new market entrants are actively devising ways to overcome these challenges.
As I’ve discussed in previous posts, commercial solar water heating SWH is less expensive and captures more energy per square foot than solar PV—making it a compelling proposition for many businesses in hot water intensive sectors. Although solar water heating systems are less expensive to own and operate than solar electric systems, their upfront cost is still a challenge for many buyers.
Third party financing and turnkey services allow customers to purchase SWH with no upfront costs. The paper identified six different financing models, each with its own set of benefits and challenges: