Selling Homeowners a Solar Dream

slugo writes to mention a Wired article discussing a unique business looking to capitalize on interest in solar power. The Citizenr company will install a solar generator on your roof, completely for free. You then buy power from it, instead of a regular power company, at a fixed rate that's likely to be lower than the usual power fees. The company will make money on these usage fees, as well as credits from the federal government for spreading the use of solar power. If it sounds too good to be true to you, you're not alone. A number of financial analysts have warned people away from the company. "The naysayers are finding lots to say nay to. Much of the criticism is clinging to the company's multilevel marketing scheme. So far, more than 700 people have enlisted as independent Citizenr sales agents -- what the company calls 'ecopenuers' -- or about one sales representative for every 10 customers, with significant overlap. Heading that sales army is 42-year-old Styler, a veteran of multilevel marketing and a colorful figure in his own right." Pyramid marketing and shady business or not, it's an intriguing idea.

Hooray!

[mdsolar]

But, this is not completely free. There is a $500 deposit once you approve the design of the system.

One thing that confuses people about how this works is the idea of net metering. The system is designed to meet 100% of you power use over a year. It is not designed to meet you peak power use. Under net metering you build up kWh credits when the Sun shines and you are not using all of the power, and you use those credits at night or on cloudy days. The key thing is that the credits last for a year so the seasonal differences in power production and power usage can match up annually. There is good information on net metering laws at http://www.dsireusa.org/ [dsireusa.org].

At least three shashdot users are selling rental contracts for this company and if there are more please let me know so I can add them to this list http://mdsolar.blogspot.com/2007/01/slashdot-users -selling-solar.html [blogspot.com].

Please remember that this is a startup and it is going to take time to get going. No money will be collected until the panels are ready for installation!

Feasible...

[evilviper]

The plan is entirely feasible.

If you start up a solar power "plant" you have to pay for the land, and you end up selling the power to the grid at wholesale prices.

With this, you get the land (roof tops) for free, and you can probably sell a good portion of the power at nearly retail prices directly to the home-owner, rather than the much lower wholesale price.

Whether there is scamming going on or not is a completely separate issue... It's certainly possible this company could be a scam to get at that some of that state and federal subsidy cash, but it's just as possible that it's not. And frankly, if I'm not a stock-holder, and am just buying a service from them, why do I care much if it does turn out to be some type of scam? At worst, you save some money in the short term, and have to give it up after a while... At best, maybe they go under, you'll be lucky enough to get a solar panel installed on your roof, free and clear (no more monthly fees).

It's not like solar power companies have a monopoly on scams...

Worst Case Scenarios

[Joebert]

What happens if the company goes belly up, do I get to keep the generator, does uncle sam come & rip the thing off my roof, do I get the option to purchase it ?
Are they going to inspect roofs before installing theese things ?
"Multilevel marketing" ? Does that mean 3rd party contractors will be doing the install, who do I go to if my roof starts to leak after the install ?
If there's bad weather enough for me to have to use traditional grid power occasionally, do they cover the difference since their service failed ?
What happens if I decide to get my roof replaced while this thing is up there ?
How much of my roof will this thing require, will having a pool heating unit up there already be a problem ?

Re:Eww

[mdsolar]

This works really well in North Carolina where http://www.ncgreenpower.org/ [ncgreenpower.org] pays a very high premium for solar power. You could probably realize a 10% return. Elsewhere, it is an inflation tracking investment.

It's a scam.

[Ungrounded Lightning]

The plan is not feasible, with or without the multi-level scheme.

Solar installations of house-size with a net-metering grid hookup are not cost-competitive with grid power, even with government subsidies and without paying for the space under them. Otherwise people would be able to save money by doing this themselves, without the middleman and his pyramid scheme.

The difference currently is a factor of several - too large for even an exceedingly efficient company's economy of scale to overcome. It's dropping. But it's still far from crossover. (When it DOES cross over there will be efficient companies building customer-owned installations that homeowners finance with the mortgage, as part of their houses.)

This is a ponzi scheme.

Re:solar hot water

[Yartrebo]

I've read up on it, and it appears to indeed be a big scam. Established solar panel producers are having a very hard time buying silicon at any price (most of what they do get is on long-term contracts), no less at the discount prices needed for the whole scheme to work.

I'm guessing the factory will never be built and the scammers will pocket the money instead.

PS: About solar hot water, the payback does indeed work out a heck of a lot better.

Crossover is here

[mdsolar]

The $3-4 cost per peak watt with present panels is driven now by scarcity of solar grade silicon and smaller scale less efficient production. The company expect a cost near $1.53 per peak watt and an energy return on energy in in about one year. This comes from scale and producing their own silicon. You can see that this is pretty much on the trend identified here http://www.telegraph.co.uk/money/main.jhtml?xml=/m oney/2007/02/19/ccview19.xml [telegraph.co.uk].

"O Ye, of Little Faith"

[Olero]

It's funny to me how negative even the nerds are--this is the last place I would have thought I'd see this attitude, but as always, the techies fear the sales guys (OOOOOhhhhhhh--MLM!). I mean for crying out loud--an 18-month-old website just sold for almost $2 BILLION dollars, and although looking at stupid videos might be a good way to pass the time at the office for folks stuck in front of their computer all day, it ain't gonna change the world. I think Citizenre will (full disclosure - I signed up to be an associate - http://www.qcimarketing.com/ [qcimarketing.com], and I think the naysayers will be put in their place in the next month or so when the press release comes out. You'll have your questions answered then. I don't know if any of you people remember a little thing called the "Dotcom Era"? Anyone? If you're a tech person and you were working then, you remember the incredible level of secrecy around even the most duplicated business plans, and nobody would even dare to think about "opening the kimono" about their plans to anyone--even investors--without an iron-clad NDA. Why would you expect Citizenre to? With such an incredibly disruptive business model to today's energy industry--especially the traditional solar guys (who CANNOT compete with our model--EVER), and with many big-caps with big pockets who can see themselves making a few bucks in this $296 Billion market by simply copying us, I hope you people have the requisite 2c to rub together when it comes to just plain old business common sense. We may have announced $650 million in funding, but let's be honest here--there's a LOT more where that came from. Timing is everything here. I'm a NASD licensed former floor-trader (private fund--not a stockbroker), start-up business consultant, and C-Level Sales Shark, and I "get" the numbers, and they work. In fact, you can take a look at a PhD'd Independent Investment Advisor's analysis of our plan (I'm in CO like he is, but I've never met him, FYI) here: http://tomkonrad.wordpress.com/2006/12/13/102/ [wordpress.com] - if you see any flaws in that analysis, let me know! That's my 2c. PJ

Re:It's a scam.

[Ungrounded Lightning]

Odd that you think off-grid solar is cost effective and grid-tie isn't. Off-grid solar usually has batteries. Since people don't want their batteries to be constantly in discharge, they often end up with the panels throwing away the output because the batteries are charged or close to charged. This really screws up the economics of panels.

What makes off-grid cost-effective is when it saves you enough by NOT running the grid to the site to pay for much or all of the system.

Example: Suppose the cost of the system - panels, batteries, inverter, wiring (excluding the house wiring), instalation, and all comes to exactly the same as the grid hookup. Now your instalation is FREE. Your power cost become the cost of maintainence for the system - mainly replacing the batteries every five to ten years. That's a drop in the bucket compared to a power bill.

With grid-tie, all power generated by the panels is always used, either in the house, or by the grid. The grid is your 100% efficient storage.

Not really, though it's close. Two main losses:

If you feed more than you use in a given year the excess is lost. (Like the dump load on the batteries.)

And you still pay the connect fee. (In the case of Sierra power in Nevada that's currently $6/month. $72/year would cover the periodic replacement costs for about 5-10 KWHr of your deep-cycle battery capacity.)

Re:The top cat will make money

[kimvette]

Wouldn't you rather just own the system outright? Outfit the system with a large bank of deep-cycle batteries like they use in telco offices (20yr lifespan), a good power conditioner, and net metering to feed any excess into the grid. That way, you pay your up front cost, but then your property begins earning you money, perhaps even enough to pay your property taxes. Convert home from a loss to a profit center!

citizenre

[slashthedot]

I came to know about Citizenre through bestcashawards.com . BCA is a MLM scheme where you earn for attending marketing conferences if you manage to make 7 levels under you. Thereafter you get paid per person under you for each conference. I was initially quite interested in how they can help me make money but gave up after a few days in their internet conference. Citizenre was the first company giving a seminar under bestcashrewards. The sales guy offered me $5 for each customer I manage to get signed up with them. But when I asked him how would he track if the customer has been referred by me, he didn't have any idea; asked me to help him make a tracking software. I like the idea of harnessing Solar power, but not sure if citizenre can deliver. They count each person who fills up a form as a customer. Most of them attend the conference to make money and are hardly interested in buying anything. I think the 7000 count is just the people who have filled the form, not the real customers.

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Re:Eww

[hardie]

Read what Citizenre has to say. They are doing what you want.

They charge you what your current power bill runs for electricity, flat rate for 25 years if that is the term you sign up for. You still have to pay for the connection, since they sell excess power to the utility (and the utility is your backup power--no batteries).

They will also move your installation to a new house once, for free.

Now whether this business plan is going to work for them, I don't know, but the risk on your part is small ($500 for 5kW).

Steve

Re:It's a scam.

[aquabat]

I think he's saying that off-grid solar is more cost effective than on-grid conventional if you live way out in the sticks, because it would cost the electric company millions of dollars to run a line to your house, but it would only cost you a few grand to set up some panels and an energy storage system.

Another point in favour of off-grid solar is that your costs are all capital costs, as opposed to operating costs. You buy the hardware, set it up and forget about it. Also, when comparing costs, you get to amortize over the life of the equipment.

On the point of batteries, I think that if your batteries are always charged, then you are storing more energy than you are using. You can therefore further reduce your capital costs by reducing the number of solar panels you use.

On the point of subsidies, if you are going to exclude any subsidies given to off-grid solar, then you should also exclude any subsidies given to conventional electric companies, when calculating costs. This includes subsidies on fuel used to generate power, and on the transportation industries that move the fuel.

Finally, I'd like to make a point regarding the general economics of going off-grid. Sure, it might cost me more to go off grid than to stay on-grid. It might, in fact, cost me a lot more. However, when I weigh the costs, I weigh them against the benefits. I can only speak for myself, but I see great benefit in being off-grid, and still having electric lights, heat and refrigeration (ok, and maybe a laptop too). That self reliance is worth a lot to me. If I had, say, fifty grand to blow, I would rather use it to set up an off-grid power system than to purchase a nice 70" plasma TV.