Tesla Motors has been getting ahead in the electric vehicle market because of their newly produced car, Model S. Many car manufacturers are concerned with the shift in the market; this actually includes Honda Motor Company Ltd, the Japanese car manufacturing company to be established in 1948. Honda has recently decided to have a partnership with Solarcity, an American provider of energy services, to offer cheap solar power to eligible customers. They promised that with this incentive, they will be guaranteeing a utility bill for solar power producing a lower rate than grid-supplied energy. This not only includes cheap solar energy but, it also means the eligible Honda and Acura customers would be obtaining a rooftop solar panel installation, covering all the costs including the cost of the panels itself.
The agreement that has been established between Honda and Solarcity is a power purchase agreement, which is a popular tactic to finance solar installations. Power purchase agreements are designed as contracts between two parties, whereas typically the property owner pays for electricity at a reasonable price rate for a period of time but the installer has continual access to own, operate, and maintain the system for that time period. It's not unusual for this partnership to also offer insurance, maintenance, repair and monitoring during the specified time period.
Honda customers are able to pay for their bills up front in two ways: either pre-pay for the solar electricity or pay at a monthly rate which is lower rate than their utility bill. Surprisingly, Honda and Solarcity had invested $65 million into a fund for this agreement, which covers dealerships and customers located within Solarcity's few state service areas. This includes other efficiency upgrades for customers such as weatherization, a practice of protecting establishments and its interior from all weather (sunlight, precipitation, wind) and modifying it to reduce energy consumption and optimize energy efficiency.
Not a bad deal if they're planning to be ahead of the other car manufacturers to be on a head-on competition with Tesla Motors, right? What do you think?
