This Startup Makes Solar Panels Available To All Homeowners, Not Just Wealthy Ones
Source: Fast Company, Adele Peters
Photo: Courtesy of Posigen
Many solar programs require good credit scores or hefty down payments. PosiGen makes them more widely available—and adds efficiency retrofits, as well.
Five years after Hurricane Katrina hit New Orleans, killing hundreds of people and causing billions of dollars worth of damage, Thomas Neyhart, an entrepreneur living in the city, started talking with his wife about how the area could be rebuilt differently. “Just looking around, it seemed like all the affluent neighborhoods were back—homes rebuilt, elevated, and with solar on and energy efficiency,” he says. “And when you went in lower-income neighborhoods and communities of color, people weren’t back, and the ones who were back were struggling.”
He started thinking about how one solution—solar power—could reach lower-income customers, not just rich homeowners. Existing solar programs required homeowners to have high credit scores or be able to afford large down payments. The people who could most benefit from lower utility bills couldn’t participate. “We said, how do we craft a program where we can start saving people money from day one?” he says.
PosiGen, the startup he cofounded in 2011, relies in part on solar tax credits offered by the government, which make it possible to get loans from banks and other financial institutions for the solar panels, and then lease them to homeowners for no money down and no requirement of a minimum credit score. For the system to work, it also has to save homeowners a significant amount on utility bills, so the company often will do an energy-efficiency retrofit on the buildings.
When the team gets to a home, they start with a “blower door” test, which involves temporarily closing up the home and blowing a fan to see how much extra air is flowing through gaps. The company then seals the gaps and air leaks from ducts, which can also make old houses more comfortable and reduce pollution. Sometimes, they add insulation in the attic and walls. They add programmable thermostats and replace lightbulbs with LED lights.
The solar panels on the roof might be the most visible change, but the other less sexy energy-efficiency changes actually help save the most money. “On average, we’re going to increase the savings from solar alone by 30% to 80%,” Neyhart says. “As we’re working in these lower-income communities and communities of color, a lot of times it’s older housing stock that hasn’t been maintained as well. And sometimes, we hit a home run and we can double or triple their savings from solar alone.”
Customers pay the company each month to lease the solar panels but save more on their utility bills, so it’s a net benefit. “If we can pay somebody 50 bucks a month, and you’re a low-income family, that money goes toward school supplies, groceries,” he says. “It really makes a difference.” In 2020, the average customer saved nearly $600 a year on utility bills.
When the company launched, and pitched investors on the idea of leasing solar panels to poor customers without checking credit scores, “we got laughed out of people’s boardrooms,” he says. But PosiGen, convinced that the model could work, found some early backers, and began installing solar and energy retrofits in thousands of homes. Now it’s growing quickly. In 2021, it raised a $27 million round of venture capital funding. This month, it closed a $100 million equity financing round. The company, which now operates in a handful of states, is expanding to several more. (That’s partly because Louisiana’s solar incentives have become less attractive over time, making it harder to do business there, but largely because the company sees an opportunity for this work nationally.)
“We’re finally getting really traditional, mainstream finance organizations to realize that poor people pay their utility bills, and that you can finance solar for low-income families,” Neyhart says.
ABOUT THE AUTHOR
Adele Peters is a staff writer at Fast Company who focuses on solutions to some of the world’s largest problems, from climate change to homelessness. Previously, she worked with GOOD, BioLite, and the Sustainable Products and Solutions program at UC Berkeley, and contributed to the second edition of the bestselling book “Worldchanging: A User’s Guide for the 21st Century.”