The word "free" generally gets folks interested, and that's how SolarCity has been marketing their Power Purchase Agreement (PPA) recently. It's true that the company will put panels on your roof for $0 if you sign a contract to purchase power for an extended period, usually 20 years. The personal economic benefit is power costs typically 10-15% less than buying electricity from the grid. As with any renewable energy system, there are environmental benefits and -- for New England which has few jobs attached to fossil fuels, but a fast-growing renewable energy sector -- benefits to the regional economy.
SolarCity has the most residential solar installations, about three times more than 2nd-place Vivint, but the latter is about to go public and hopes that a $200M IPO will provide the funds needed to spur growth. Vivint might be a good investment if its shares follows the trajectory of SolarCity, which opened near $8 two years ago and now stands at $70. Vivint is in fewer markets, but has beat out SolarCity as the top installer in Massachusetts for the past several quarters.
Both companies may be hedging their bets on the PPA financing model, which has some disadvantages compared to direct purchase of a system by the homeowner. The US Dept. of Energy indicates that direct purchase is more cost effective than PPA because it returns more value to the homeowner. Also some home buyers seem to be wary of purchasing a house with a PPA and the resulting need to assume a lease. The main disadvantage of direct purchase is the initial cost, but solar loans are gaining in popularity as an alternative to financing with a home equity loan. Dividend Solar believes these loans will out-compete PPA, and Admirals Bank has been offering these loans along with many other companies. A sign that loans are gaining traction seems to be that SolarCity, Vivint, and other PPA players are moving quietly in this direction.