The US state of Georgia has approved a bill which supporters hope will greatly improve the economic competitiveness of solar, freeing up the leasing of solar PV system equipment from third parties.

Third-party ownership of residential rooftop solar systems is a fairly common business model for installers to adopt, with SolarCity and other major providers servicing the bulk of their customer base through such programmes. However, a handful of states including Georgia and North Carolina still prohibit this arrangement. Previously, leasing companies would only have been able to enter the market in these states by directly offering loans to customers for the upfront cost, as SolarCity began doing in some markets at the beginning of the year.

House Bill 57, to lift some of these restrictions, was approved by the state’s senate on Friday. It now awaits the final signature of Georgia’s governor Nathan Deal, who is widely expected to approve the document, according to local reports.  

The bill amends Georgia’s official codes to add the new section, “Solar power free-market financing act of 2015”. Among other points, legislators wrote in the bill that “It is in the public interest to facilitate customers of electric service providers to invest in and install on their property solar technologies of their choice” and that “free-market financing of solar technologies may provide more customers with opportunities to install solar technology”.

To that end, households will be allowed to lease solar equipment from suitable service providers and then sell the electricity generated to utilities and other customers once governor Deal has signed his approval.   

A number of local and national advocacy groups were quick to applaud the news through press statements and social media. The Solar Energy Industries’ Association (SEIA) president and CEO Rhone Resch hailed the bill as “important legislation” that would “help to expand the use of clean, reliable and affordable solar energy across Georgia".

Resch applauded a number of parties involved, including “state legislators – especially the bill’s author, Rep. Mike Dudgeon – Georgia’s electric utilities, the Georgia Property Rights Council and many other groups for working together to benefit all Georgians”.

“This is an important moment in the history of our industry,” Resch concluded.

Local group Green Chamber of the South said in a statement on its Facebook page that the bill “will make solar energy a more affordable option for a wider range of businesses and homeowners”. Meanwhile, Brion Fitzpatrick, chairman of Georgia Solar Energy Association said the bill was an example of “how working together toward a common goal can transcend political divisions and produce lasting, productive results for all of Georgia”.

There was an element of compromise to the bill before it passed unanimously. PV-generated electricity from leased systems can be sold back to the grid while homeowners or residents will be given terms of 10 or 20 years to pay off the equipment. According to reports there will also be some restrictions on how much each system can feed back into the grid. These include caveats that applicable residential systems are no larger than 10kW generation capacity and that electricity sold back to the grid does not exceed 125% of the “actual or expected maximum annual peak demand of the premises the solar technology serves,” in the case of commercial installations.