There has been an enormous effort in one Bay Area community to push the adoption of residential solar electric systems. While not the first instance in the country of community or group solar, this is an intriguing story with unique roots. The driving force behind the effort is GoSolarMarin, now in its second and more formal year of negotiating a lower bulk rate for the installation of solar electric systems for residents of Marin County. While the cost per installed watt of solar varies greatly, not only state to state but installer to installer, an average range is $8-9/watt DC. For a comfortably-sized residential system of 4kw, that’s between $32 and $36 thousand before rebates and incentives. The bulk rate negotiated by GoSolarMarin is $6.56/watt DC ($7.87/watt AC), or just over $26k for the same size system, and is available for residents if they go through GoSolarMarin to work with the solar installer and financer SolarCity. This, according to GoSolarMarin, is the lowest price every negotiated for a community solar purchase.
But a good deal doesn’t make everyone happy. Unfortunately, a side effect of group purchases of this kind is that it makes it very difficult for the competition. It is not feasible for most installers to simply drop their installation price by 15-20%: their profit margins are nowhere near big enough to allow for that. So organizations like CALSEIA are against group purchases, since the organization needs to protect the interests of all its members and group purchases are really only good for the one installer lucky enough to be involved. It’s a bit like neighborhood convenience stores shaking their fists at the new Wal-Mart down the road: they’re losing business, Wal-Mart is thrilled, and even if consumers feel a bit guilty taking advantage of the much lower prices, they’ll probably still shop there. Not that SolarCity, which installs systems in California, Oregon, and Arizona, is the Wal-Mart of solar. Far from it. And an argument in favor of such group efforts (aside from the cost savings for consumers) is that they may play a role in what many see as a coming necessary consolidation of the market.
One feature of working with SolarCity that particularly appealed to Lisa Max, GoSolarMarin founder, was the fact that the company offers solar leasing. This means that when a homeowner has a solar PV system installed at a cost of, say, $16k after rebates and incentives, SolarCity bankrolls it and the homeowner pays a fixed monthly sum until the system is paid off. As with any leasing system, the lessee has to pay up every month regardless of whether or not the system is performing to expectations. SolarCity tempers this with a performance guarantee, backed by their commitment to repair or replace the system in case of under-performance.
More financing options for homeowners include energy efficiency mortgages [EEM] and using existing equity or line of credit to pay the full sum up front to the installer. The appeal of a lease is two-fold: 1) no up-front investment; and 2) potentially positive cash flow from the outset. This is because the monthly lease payment is often lower than what you were paying your utility company, especially if you live in a state with high electric rates.
So this explains the appeal of the program, but how did the program come to be? When Lisa Max and her husband moved to San Rafael in 2006, their 55-year-old house was woefully energy inefficient, its flat, Wright-style roof offering little insulation. Frustrated by electric bills averaging well over $350 per month, Lisa decided to be proactive. She made a flyer that she stuck under her neighbors’ doors, explaining her interest in solar and asking them to call her if they, too, might be interested. Not many people called. But when Lisa spoke at a neighborhood association meeting about her interest in building community momentum for solar, a local reporter ran a piece about it that generated a deluge of calls.
At this point, Lisa decided to slap a name onto the nascent group—GoSolarMarin was what she chose—and announced a public meeting for it. She got on the phone with solar installers servicing Marin County and invited them to the meeting as well. It was a successful enough meeting that it led to another one to discuss how exactly one writes a request for proposal (RFP). Once she had the RFP in hand, Lisa approached the vendors who had expressed an interest in the project and asked them to submit prices based on different volumes: that is, what would you offer people as an installation price if we got you 50kw worth of interest? What about 100kw? Lisa eventually chose Novato-based SPG Solar’s $7.94/watt AC ($6.62 DC). Not bad for an organization that was created so spontaneously and grew so organically.
During the bid-review process, Lisa did due diligence on the solar companies—since she was new to this business there was necessarily a great deal of research involved—including visiting their offices personally, and checking up on their business performance via California Solar Initiative (CSI) ratings. One reason SPG Solar won the bid was due to the fact that they’re a local company, which tied in well with what Lisa was trying to keep as a community effort. SPG Solar ran a couple of full-page ads in local newspapers, and ended up installing over 100 solar electric systems throughout the county.
 Over 100, but that still didn’t satisfy Lisa, who wanted to see as much of the county go solar as possible. Not to mention she still hadn’t had her own house attended to. But before moving forward, she had to figure out how to get paid equitably. She decided to partner GoSolarMarin with a non-profit. GoSolarMarin became a program of MarinLink, an organization that runs programs and develops community connections throughout Marin County. Thus GoSolarMarin’s Phase 2 RFP asked that proposals include a 1% referral fee, which would be paid to Marinlink, which in turn would fund GoSolarMarin’s expenses. This arrangement compensates GoSolarMarin for the time and effort it spends making connecting Marin County residents with installers, while helping fund the wide variety of community programs sponsored by MarinLink, which range from a United Way effort to homeless outreach and book festivals.
In researching companies to send the Phase 1 RFP to, Lisa had noted SolarCity’s history of working with community projects, and in fact their bid was in the running for the first year; however, since SPG Solar’s price had been almost identical to theirs, they won out for the local factor. For Phase 2, she dug a little deeper and decided that the combination of SolarCity’s experience with community projects together with their leasing program made them the strongest contender. Additionally, she had been impressed by their accessibility and attentiveness throughout the intervening year; they had made themselves available as an informational resource even when they didn’t win the bid, and their interest in the project was clear. Considering the extent to which GoSolarMarin wanted to see the project advertised, SolarCity’s in-house PR department promised to lift that burden off Lisa’s shoulders (or perhaps more accurately her husband Gary Tobin’s, whose PR agency has been a valuable asset for GoSolarMarin. Plus, their price was pretty sweet.
However, the choice was not up to Lisa: it was up to the GoSolarMarin steering committee to choose which proposal to accept. Both Lisa herself and Dana Armanino, the Green Business Coordinator for Marin County’s Sustainability Team, offered advice and guidance but abstained from voting. One stipulation of working with a non-local installer, for GoSolarMarin, was that the installer should get involved with the community to some extent. To this end, SolarCity and GoSolarMarin are working to educate the county about solar power through a series of information workshops, and they’re working together on a program that would provide solar workforce training for Marin County nonprofits.
It remains to be seen how many kilowatts of solar electric systems will be installed on rooftops across Marin County as a result of this second push from GoSolarMarin, but there will be at least one: Lisa and Gary have signed a lease for a 6.2 DC kw system for their home, one that is guaranteed to produce at least 8000 kW hours of electricity annually. GoSolarMarin’s new automated registration system takes the basic stats of anyone interested in participating of Phase 2 of this program, including some details about electric use. The information feeds directly to SolarCity representatives who take it from there—once GoSolarMarin has made that connection, it can step out of the process.
The move towards group purchasing of solar has clear appeal in terms of cost to the consumer and of workflow for the installers who come by these bids. Considering the drawbacks of group purchases (competition issues, potential service quality problems given the number of simultaneous projects, the relative difficulty of getting enough members of a community involved), it’s possible that the trend will shift towards programs that encourage community adoption in different ways. For instance, the progressive Berkeley First program allows residential and commercial customers to pay for renewable energy systems via a 20-year tax assessment; this has the advantage of unencumbering the property owner, as in the event of the sale of the property, the new owner inherits the assessment. One thing is certain: the market has noticed consumers’ reluctance to foot the entire cost of such a major investment in a home or business up front, and is responding with a set of options that will only to continue to expand.
Community Solar Purchasing |
