SolarCity Corp., the nation’s largest residential solar service provider, has a history of pushing the envelope. It introduced the industry’s first leasing program for homeowners, offered discounted solar installations through Groupon, and is pouring money into a solar manufacturing plant in the United States.

In the last two weeks, the company added two financial innovations: a first-of-its-kind nationwide solar bond program to sell bonds directly to individual investors who want to support the spread of clean energy; and a hybrid financing program (MyPower) that gives customers lease-like payments as well as ownership of the solar system.

San Mateo, Calif.-based SolarCity, founded in 2006 by brothers Lyndon and Peter Rive, has grown to more than 6,000 employees. It is a full-service solar provider—including design, permitting, financing, installation, monitoring and maintenance—with operations in 15 states. So far, the company has installed more than 750 megawatts of photovoltaic solar systems for homes, businesses, governments and schools.

Elon Musk, founder and chief executive of electric car maker Tesla Motors, is chairman of the SolarCity board—and cousin to the Rive brothers. All three share a sense of urgency about the threat of climate change.

Limiting global warming to 2 degrees Celsius will require reworking how nations produce and use energy—away from fossil fuels to a mix of aggressive energy efficiency, nuclear power, carbon capturing technologies, and renewable power. The International Energy Agency estimates that renewable power will have to supply 65 percent of the world’s power supply.

That makes solar a crucial part of the effort to avoid the worst effects of a warming climate. Federal tax credits, which have been a big driver in solar growth, are set to expire at the end of 2016.

Following the launch of MyPower, Lyndon Rive, SolarCity’s chief executive, talked to InsideClimate News about the company, the MyPower program and the challenge of spreading solar far and fast enough.

ICN: What’s your feeling about where the clean energy movement is right now?

Rive: I think the movement’s getting bigger. It’s absolutely getting bigger. How long will the world and the U.S. continue to tolerate being able to pollute for free? Every fossil fuel company should have to admit, “We are allowed to pollute for free.” That pollution is putting a tremendous amount of cost on all these other externalities. That pollution should be included in the cost of the product. People are going to realize that. 

ICN: Where do things stand with solar compared to where it needs to be to limit global warming?

Rive: In order to get to 40 percent penetration of solar by 2040, we have to start deploying 400 gigawatts a year. The worldwide market has to increase 10x today and then keep that run rate until 2040, just to hit 40 percent penetration. So there is so much space—so much market, and we have this big problem we have to solve.

ICN: Is the upfront cost of solar still the big burden, the big hurdle for most U.S homeowners?

Rive: The biggest burden, quite frankly, is still education. People still associate solar as having a cost. But there is no cost. There’s just savings. In all of our products, the MyPower, the [power purchase agreements], or the lease, there’s essentially no cost to the homeowner. They just save money from day one. In MyPower, although they’re buying the system, and the system may cost $30,000, they’re getting a loan for $30,000, and then they’re paying back the loan based on the production of the solar system. 

ICN: Tell me how that works.

Rive: Let’s just use Southern California Edison pricing. In the Southern California Edison [utility service area], the solar loan payment would be 16 cents a kilowatt-hour, but the utility’s pricing is roughly 20 cents to 22 cents a kilowatt hour. So from day One, you’re saving 4 to 6 cents a kilowatt hour—roughly 20-40 percent of your electric bill. A year later, you now get a federal tax credit of $9,000, and if you apply that $9,000 to your loan, it buys down your load from 16 cents a kilowatt-hour to 12. With the utility at 20 cents a kilowatt-hour, that becomes a massive difference. 

ICN: How big a boost do you think the hybrid MyPower offering will give you?

Rive: Well, we plan to double [solar installations] again next year. And I think by the middle to late next year, this will be half of our residential business.  

ICN: What will stop your competitors from just copying it?

Rive: It’s pretty hard [ to copy it]. But the thing about coming up with financial products is that you describe the formula in your customer proposal. So the ingredients are there to copy.

How long is it going to take someone to create a similar product? When it comes to any financial new product, it’s 6 to 18 months before others will copy it. That’s fine. My number one competitor is not the other solar companies. My number one competitor is the utility. It’s the current energy provider and the dirty energy provider. Even if they do copy it, and they see growth and are successful—great.  We’ll all try and solve the problem. If you look at our current market share, we deploy more solar than the next 50 solar companies combined. The market’s still less than 1 percent penetration for solar. There’s a lot to go.

ICN: How do you get around the education problem you mentioned?

Rive: We’ve been at this for eight years, and we’ve had a 100 percent growth rate every single year, so it seems to be more of a conversation, a discussion with homeowners. Less of traditional advertising, and more just conversations. When you speak to homeowners, the common feedback is, yeah, I’m interested in solar, but I’ve heard the payback takes a long time. Then we have to education them, that there is no payback. The savings are immediate and you’re just paying less for energy.

Given the choice of paying more for dirty power or less for clean power, which one do you like? Then they giggle, they start asking questions, you know, why isn’t everybody doing this? It’s that tipping point, it’s that moment, where people realize, wow, this is real. There is no investment. The system gets installed, I just pay for the energy, and I pay less for that energy than I paid the utility. I’m still connected to the utility—but for 60 percent of my electrical needs, I’m paying 20 to 30 percent less. 

ICN: What are your thoughts on the trade disputes over Chinese solar panels—the United States imposing tariffs on their importation? How does that figure into your business?

Rive: The dispute is unfortunate. The industry has to do everything it can to reduce costs. The concept of adding an extra tax—an import tax—on Chinese modules is really unfortunate.  Whether or not the Chinese government has subsidized the solar industry, to me, that just doesn’t matter. We need to change the world. We need to use clean energy. We need to stop polluting, and this concept of putting barriers in place on something that helps us slow down the polluting is bad.

SolarCity is building its factory in the U.S., so one could argue that, competitively, SolarCity is better off with a tariff on Chinese modules. But I think that’s a bad outcome. We don’t want to put any burden or tax on something that’s helping with an important problem that we have to solve. We want to promote it. We want to accelerate it. So, the disputes are there, but I think it’s unfortunate.