Automakers have long resorted to incentives like zero-percent financing, rewards points and rebates to inspire customer loyalty. Now Honda is offering a different deal: inexpensive home solar power systems for customers.
Through a partnership with SolarCity, a residential and commercial installer, Honda and Acura will offer their customers home solar systems at little or no upfront cost, the companies said. The automaker will also offer its dealers preferential terms to lease or buy systems from SolarCity on a case-by-case basis, executives said.
The deal, in which Honda will provide financing for $65 million worth of installations, will help the automaker promote its environmental aims and earn a modest return, executives said. It could also open the door for more corporate investment in solar leasing companies, which has largely been limited to a small cluster of banks to provide capital for their projects.
And SolarCity, one of the few clean-tech startups to find a market for an initial public offering of its stock last year, will potentially gain access to tens of millions of new customers through Honda’s vast lists of current and previous owners.
“When we partner with financial institutions, they aren’t promoting us to their customers, they’re essentially just providing us with capital,” said Lyndon R. Rive, SolarCity’s chief executive. But with Honda, he said, the company is gaining “access to a broader customer base, and a customer base that is conscious of the environment.”
“I don’t think that by finding Honda buyers you’ve homed in on the perfect solar customer, but there’s enough overlapping between the demographics that you’re better off than the general population,” said Shayle Kann, vice president at GTM Research, adding that car buyers were more likely to own their homes and have the income and credit history to qualify for solar leasing.
While the U.S. solar industry in general has been struggling in the face of declining government subsidies, overcapacity in production and a glut of inexpensive Chinese panels, interest and investment in solar leasing, or third-party ownership, has continued to grow. According to a recent report from GTM Research, a renewable energy consulting firm that is a unit of Greentech Media, third-party ownership accounts for more than 70 percent of all residential installations in developed markets and has generated at least $3.4 billion in private investment since 2008.