Tesla founder and CEO Elon Musk has announced a new business model for his solar energy business which will now allow consumers to rent solar panels and the necessary equipment to for a standard monthly rate - but only if you live in one of the six states that this plan will be available in. Why the sudden change to a rental-based model?
Tesla has decided to transition to a rental-based model after several disappointing fiscal quarters, the most recent being the most underperforming quarter since Tesla acquired SolarCity (their solar power subsidiary).
As stated before, the rental option is currently available in just six different states - Arizona, California, Connecticut, Massachusetts, New Jersey, and New Mexico, with monthly plans starting at $50 per month. Tesla has also planned to waive all installation fees for the panels and necessary equipment, and users are not bound to a long-term contract and are free to end their rental as they see fit. Also according to the rental plan, users can out-right purchase the equipment after five years of use, however, if a customer does decide that solar power isn't for them, there is an additional $1,500 fee required for uninstalling the equipment, a fee that Tesla claims they make no profit from.
But is this model really increasing profits for Tesla?
Well, yes as a matter of fact. After all taxes, fees, and subscriptions are paid, Tesla stands to make $4,000 to $10,000 per each installation completed, all the while introducing renewable energy to consumers who would not have initially been interested in out-right purchasing the necessary equipment.
Now that Tesla offers a rental option, would you be interested in giving it a try? Do you think this is a smart move by the clean energy giant? Let us know in the comments below!