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Home Solar, Minus the Cost, Effort, Worry

| Wednesday July 16th, 2008 | 13 Comments

Sun%20Run%20logo.jpgIt seems these days you can’t throw a rock without hitting a story relating to solar power. So why haven’t you got it for your home yet? I bet you’ve already come up with a list of three reasons, without even thinking. My guess is they fall into these areas: Cost, efficiency (or lack of it) and aesthetics. Oh and let’s throw this one in for good measure: Who lives in their home for 15-30 years these days? Not you, and what good will those panels do you on your next home?
I found a solution to all of these concerns, and more: Sun Run. What they do is unique, and does quite a thorough job in allaying people’s fears. Rather than have you buy, lease, or take out a loan for the solar system, Sun Run retains ownership of the equipment. and guarantees a certain amount of power generation. Come again?
Yes. In conversation with Nat Kreamer, COO of Sun Run, I learned about a unique “solar as a service” model that had even I, chest deep in the latest green energy innovations, am considering using their service when I buy a home. Why?


On a basic level, it costs less, up front and in the long term. You pay an agreed upon amount up front, typically less then you would on an equipment purchase. Then it gets better: All you’re paying from there is a monthly utility bill, at a rate that’s fixed for, for example, 18 years. A rate which is already lower than what the utilities in California, where SunRun is based, charge.
It gets better. Built in to your agreement is service and maintenance. No additional charge. As Kreamer said to me, your average solar consumer doesn’t know the signs of a faulty system the way that you might be with something more familiar, like your car. SunRun, being the owner of the system, has it in their interest to make sure the equipment runs at optimum. Especially with a power generation agreement, for which they will reimburse you, plus interest, if your system doesn’t meet the amount they promise.
I’m having a hard time seeing a down side to this.
Being able to choose which panels you get, (ie the green built Evergreen, or the aesthetically minimal Sharp SRS) how much you pay up front, and know how much you’ll be spending, you can then get exactly the system you want. As in enough for 100% of your energy needs. Or more. As Kreamer said, electric cars are increasingly materializing these days, and with some coming from major car makers like GM’sVolt car and Nissan planning to create a broad fleet, starting in 2010.
Imagine being able to meet all your energy needs – automotive and household, with zero nonrenewable resources used to generate it. You’d sidestep the common argument of shifting energy/pollution to power plants and, according to Kreamer, run your car for 10 cents a mile, plugging in to your system. Even at today’s gas costs, bound to keep increasing, this saves you money, today, as compared to most gas powered cars.
And for those of you wondering about what happens to excess electricity generated? It’s yours. If your utility does net metering, you can sell it back to the grid.
Squashing another big concern is the fact that Sun Run takes care of the insurance for the system, effectively eliminating risk/cost to you as a home owner. Speaking of, what about if you decide to move before your agreement is done? You can either pass on the agreement to the next owner, or buy the system outright, building in this home value increasing option into your sale.
Readers: What’s your take on this? Seen any better/different arrangements to getting renewable energy for your home? Have any suggestions other than/in addition to solar for economically meeting your energy needs, locally and sustainably?
Paul Smith is a sustainable business innovator, the founder of GreenSmith Consulting, and has an MBA in Sustainable Management from Presidio School of Management in San Francisco. His overarching talent is “bottom lining” complex ideas, in a way that is understandable and accessible to a variety of audiences, internal and external to a company.


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  • Anonymous

    Sounds great….but it would be helpful to have more financial info available. With a guarantee of equipment service and utility rate security, that could run to 18 years(!!), it would be good to know whether such a new company has the resources to back up the guarantee. For example, in the event of Sun Run bankruptcy, does the homeowner loose the solar equipment, which would appear to remain Sun Run’s even while installed on one’s roof.
    Graham

  • Tracy

    CitizenRe has been trying to get this going for a while now. My obvious concern is letting a company with an unknown track record of performance alter my home. Yet, everything has to start somewhere. I’m on their waiting list.

  • http://www.TheSmallBusinessCoach.com John Seiffer

    Sounds like a great concept but I don’t quite get how the company will cover it’s costs and make money. Given that solar is not quite cost competitive with conventional power and the home owner is paying less, there has to be some extra for the company. In similar commercial deals I’ve looked at that extra comes from the fact that the company gets to sell the extra power back to the grid and keep the bonus (especially as prices go up in the future). If you’re saying the homeowner gets that too in this case, I’d like to know more about their business model.
    – John http://www.TheSmallBusinessCoach.com

  • http://www.grist.org/feature/2008/04/11/?source=most_popular Jordan

    SolarCity is a similar company.
    With these suggestions, I’d love to see a head-to-head comparison of the different companies.

  • http://www.grist.org/feature/2008/04/11/?source=most_popular Jordan
  • http://www.greensmithconsulting.com Paul Smith

    I’m encouraging the COO to chime in on this, and wrote them myself to follow up. I think they were busy at a major solar conference this week, so hopefully they’ll check in next. Stay tuned!

  • thor

    Why get into a contract for 18 years. Sounds like a ploy form the energy moguls of today to hold on to their monopoly by hooking you up for 18 years now, for things that are free (solar energy) and in the very near future will only be a small upfront cost.

  • Wei-En Tan

    Hi Thor,

    The sun is certainly free, but harnessing its power certainly isn’t, and considering that utility prices are predicted to rise on an average of 9.8% in 2009 ,

    http://www.upi.com/Business_News/2008/07/25/US_electric_rates_predicted_to_rise/UPI-39351217004823/

    looks like a fixed rate for 18 years is a very good idea, and would be even better if it were longer…

  • Caitlin MIskimen

    Regarding a comparison between SolarCity and SunRun, here’s what I’ve gleaned from reading about them online:
    * SolarCity is an installer, and in the way of financing it provides homeowners with something called the SolarLease. Basically an equipment lease, homeowners pay a low upfront cost and then a set monthly bill for the duration of their contract. Seems a bit fuzzy when you get into details about insurance, monitoring and maintenance, and you don’t get much choice about who you work with.
    * SunRun is a service, so it works with a variety of installers to get panels on your roof (my favorite so far is Akeena, who has some really cool looking panels). Big differentiators with SolarCity: The amount of SunRun’s payments are based on the electricity you use; SunRun insures panels and guarantees performance; and SunRun takes care of the maintenance.

  • http://www.greensmithconsulting.com Paul Smith

    Wow Caitlin, you really did your homework, thanks for sharing this information. As I told the COO when I interviewed them, I’m definitely looking into them when I buy a home next year.

  • Bob

    From what I understand about how these companies make their money, *I believe* they would be able to harness any utility rebates and state/federal rebates.

    Simple example here in AZ – if it costs $9/watt to install solar they get $3/watt right off the bat from the utils. Then they get 30% of the remainder as a federal tax credit or about $2/watt meaning they are only out $4/watt for the install. Now remember you need to put a few grand up front plus the stream of payments over the service agreement.

    Even if they don’t get the federal credit they probably get the util’s money and your upfront payment. And they retain ownership – which with panels that have 20-25 year warranties they can expect to earn $ beyond the initial contract period.

  • Elizabeth De Roos

    What about those of us out in the boonies off the grid? If my research is correct we get no rebates & of course can’t sell back to a utility.

  • http://www.greensmithconsulting.com Paul Smith

    @Elizabeth you may want to check in with a company that does a lot of solar out in more remote places, Plan It Solar. They may have some ideas for you. http://www.planitsolar.com/

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