Wednesday, May 14, 2008

Solar Shining Bright

In recent weeks, two companies have been getting some attention for business model and process improvements to help get residential solar panels onto people's homes. The first, SolarCity, is working to ease the investment cost of the panels, while Sungevity is streamlining the process and reducing the site survey lead times.

SolarCities new program is to lower the barrier to entry by not requiring what is for most, a huge expenditure (or loan) in order to get the system installed. According to a Grist feature, SolarCity's goal is to reduce the initial outlay from $25,000 to $2,000. How can this be possible? Because the solar panels are leased from the company and the homeowner enters into a power purchase agreement. The theory is that over the course of the use of the panels, the homeowner will have lower utility bills, and not have made a capital investment, while SolarCity will make money on the deal through tax credits, installation credits and the monthly fees collected.

This isn't a flash in the pan company either, with sales over $30 million last year and over 235 employees and plans to develop their own training center to make sure they have workers with the skills they need to expand. Which they'll need if they are to realize the vision of getting entire neighborhoods to add solar to their homes, realizing economies of scale from shipping of materials and time for work crews.

$2,000 is still a lot of money, but if their claim is correct, to reduce the electric bill, even after paying SolarCity for the electricity generated and a small lease fee, perhaps for some homeowners the ROI will make sense. Lets hope, since one way of easing the burden on our aging electric infrastructure is to reduce the demand on it.

Sungevity's angle is to streamline the solar installation process by reducing the number of site surveys and visits, relying instead on satellite imagery and other technology to do much of the leg work up to the physical installation to occur more quickly. Additionally, Sungevity takes the time to explain why having solar panels on the home makes sense economically first, and on environmental grounds after. Sungevity hasn't covered the financing portion as well as SolarCity, suggesting use of equity or other loan based financing for a solar project. (via TriplePundit)

Imagine the possibilities if these two companies could team up to bring the financing/leasing aspect and streamlined, lower cost site survey techniques to bear. Even a slight reduction in costs could make a big difference.

In related news, Earth2Tech has a post up discussing the Pros and Cons of residential solar installations versus large scale solar thermal (CSP). As it turns out, a lot of the cons for CSP are probably the same as for any major new power project, such as wind or even conventional plants: distribution line permitting and construction; long permitting processes to get installed. Some folks here in RI who are opposed to large deployment of offshore wind are advocating residential wind installations, I'm sure that similar Pros can be argued for that, though I suspect getting town zoning boards to approve small turbine installations on low towers or rooftops will be quite an obstacle.

And, finally, back in April, NanoSolar sent out a message to their mailing list that included an interesting premise for "municipal" solar plants. Their idea is that on the outskirts of small towns to devote 10 acres or so to provide a localized power generating solution that covers the bulk of the town. Of course, that assumes that a town can find 10 acres of land that can be, and which they would want to build up to provide about 2MW of power, enough for about 1,000 homes. An interesting idea, seemingly well thought out, since it bypasses the need for much new distribution infrastructure, and if deployed in enough places, could provide, in their words, "delivering a GigaWatt of power in a state through one solar farm each in a few hundred cities."