A worker secures a solar panel to a rooftop during a SolarCity residential installation (Bloomberg)

Tesla acquired residential solar installer SolarCity in late 2016 with the ambition of creating a vertically integrated renewable energy company, that marries electricity generation, storage, and sustainable transportation.

What Happened?

Tesla just launched its new service that rents solar panels out with no long-term contract or upfront costs.

The new “Rent Solar” program lets residents in six states (Arizona, California, Connecticut, Massachusetts, New Jersey, and New Mexico) pay a monthly fee (starting at $50 a month, $65 a month in California) instead of making an expensive up-front purchase.

Why It Matters

With this program, Tesla pays upfront for the installation to get long-term revenue. It’s a big departure from the company’s model which focused on making money from installations.

In a recent tweet, Elon Musk argued that users will still save money versus relying solely on the electrical grid.

Additional details and base fees, with projected returns of the solar rental program:

State Monthly Rental (Small) Estimated Annual Generation Net
Arizona $50 $700-$900 $110-$280
California $65 $1000-$1400 $250-$650
Connecticut $50 $700-$1000 $80-$420
Massachusetts $50 $700-$1100 $90-$450
New Jersey $50 $600-$800 $20-$180
New Mexico $50 $700-$900 $100-$270
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