Dow Jones News Service Covers Group Buying

Today a very complimentary story ran in several Dow Jones publications including Investors Business Daily and CBS MarketWatch. I've added the URL for Marketwatch to the home page, but in case the story disappears from their site, I've copied the story below.

SOUTH ORANGE, N.J. (Dow Jones) -- Convincing a group of neighbors to agree on anything is rarely easy. But in a growing number of communities in the U.S. over the past year neighbors have proven fairly persuasive at influencing dozens of their peers to spend $25,000 or more on a rooftop solar system.

It started in Portola Valley, Calif., a sunny community 35 miles south of San Francisco. In December, 78 of the town's 1,700 homes decided to pool their purchasing power and call in a large order for residential solar systems.

California-based SolarCity offered the community a group discount on the rooftop and backyard photovoltaic systems and installed them. The company, which started out installing individual orders for homeowners, began filling bulk orders for neighborhoods in California in 2006 as a way to try to drive down the cost of solar systems.

"If an entire group comes together they get a discount," said Lyndon Rive, founder and chief executive officer of SolarCity. "With three or four homes you don't get economies of scale."
Plenty of money and effort is being spent on developing solar technology but the most neglected part of the renewable story is the installation piece of the puzzle, according to Rive. Increasing the volume of sales of solar systems will help solar-generated electricity reach price parity more quickly with the electricity generated from power plants that burn fossil fuels, the executive said.

Today, the company has community discount programs underway in seven California cities and has completed installations in another eight. The company says that by September it had sold more than 500 residential solar systems in 19 cities and towns.

By the end of this year, the company is slated to open new offices in Colorado and New Mexico and by the first quarter of 2008 SolarCity plans to begin offering community discounts in both of these states as well.

SolarCity's program is focused on retrofitting existing homes with solar panels. But so-called solar communities aren't new. U.S. home builders such as Pardee Homes, Pulte Homes and Shea Homes have been developing planned communities where residences feature solar rooftops for several years.

Convincing 40 neighbors to go green
The company's offer is simple: if a town can get a sufficient number of homeowners to sign up for rooftop or backyard solar systems they receive a 20% to 30% cut off the local market price of a home solar system. The company typically aims to sell roughly 175 kilowatts to each community. Since an average-size home in the U.S. can usually support at least a four-kilowatt solar system, 44 homes becomes the standard target. Commercial buildings and businesses can also be a part of the mix.

SolarCity set a goal of 175 kilowatts for Portola Valley residents. The community easily topped the goal, with the participating home systems accounting for 343 kilowatts. Additional installations in the community have added 55 kilowatts, bringing the town total to roughly 400 kilowatts of solar power.

Other communities have also surpassed the company's goal. More recently, 119 households in Mountain View, Calif. ordered solar systems totaling 367 kilowatts. Another 124 kilowatts were subsequently installed in the community, even though these homeowners did not receive the rebate. Today, 2% of the single-family residences in Mountain View have solar installations and SolarCity installed more than half.

But not all towns receive the discount offer. SolarCity's strategy has been to handpick towns after conducting extensive local research, educating and interviewing homeowners, inspecting homes to determine if they can be outfitted with a solar system, and evaluating homeowners' electricity bills. The process is rigorous and can take up to three months to complete with 200 site visits to 50 homes, Rive said.

Targeting big energy consumers
The cost of a typical five-kilowatt system translates into about $9 a watt, Rive said. SolarCity can shave off about $1.50 per watt by selling in bulk, which brings the cost down to $7.50 a watt, before state rebates and federal tax incentives.

Federal and state incentives are a key part of the discount program. After deducting state rebates and federal tax incentives -- which pay for about 25% of a residential solar system in California -- homeowners in California working with the discount program have paid around $24,000 on average for a system, Rive estimated.

The California Energy Commission hosts a that allows California residential and commercial electric customers use a ZIP code to generate an estimate of the costs and benefits of investing in a solar system.

A report from Navigant Consulting released in September concluded that "the combination of California incentives, more aggressive [photovoltaic] system price reductions and new business models can have a significant impact on market adoptions."

California utilities use a multitiered pricing system for electricity that means the more electricity homeowners use the higher the rate they pay for electricity. Power prices range from 11.4 cents to 36.4 cents per kilowatt hour. This is why SolarCity employees assess the utility bills of interested homeowners to see if they are above average: higher power bills and a higher price for power is likely to shorten the payback period for a solar investment.

"In the Bay area you have homes with six computers that are always on," Rive said. "There are other parts of California that have tremendous huge air conditioning demand."

Terri Steele, spokeswoman for the California Center for Sustainable Energy, agreed that solar is being marketed to homeowners "with large homes, a couple of SUVs in the driveway" and not to the "most energy conscious"' consumers.

If an intense assessment indicates a town is right for solar, SolarCity gives the community a deadline to sign up the needed number of homes.

Mountain View residents had little trouble meeting the target. "It was pretty darn easy," said Bruce Karney, a resident who spearheaded the local buyers group. Karney now works for SolarCity as part of the team that markets and sells solar systems to other communities.
Karney acknowledged that the decision to go solar can be a significant one for many families. "It's a relatively expensive purchase. It's like buying a car," he said.

But Karney also noted that communities with high-price housing may find it a little easier to swallow the initial investment when it represents a small portion of the total value of a home. In Mountain View, the cost of a solar system is less than 2% of the cost of the average home, Karney said.

"The return on investment differs almost for every customer," said Rive, who estimates that SolarCity customers see a return investment of between 8% and 17% .

Boom in solar use
California was a natural focus for SolarCity. The sun-drenched state is the leading solar market in the U.S., representing 73% of the systems tied into the U.S. power grid in 2006.
In 2006, U.S installation of solar photovoltaic devices jumped 33% from the previous year, according to a 2007 report from Solarbuzz, LLC.
The solar boom in California is a result of the California Solar Initiative, a ten-year, $2.1 billion solar incentive program for existing residential homes and commercial buildings launched in 2007.

A new report released by the California Public Utilities Commission says solar "demand is booming." CPUC launched the California Solar Initiative on Jan. 1 with a goal of creating 3,000 megawatts of new, solar-produced electricity by 2017. The program has a budget of $3.3 billion over 10 years.

In the first nine months of 2007,requests for California Solar Initiative incentives "are on track to exceed California's total installed solar from the previous 26 years," according to the report.
Disregarding applications that have been withdrawn or rejected, the program has received 5,109 applications for 160.5 megawatts of demand, worth $320 million in incentives. Residential applications dwarf all others (4,564 applications) and comprise 13% of the total megawatts in the active applications.

As of Sept. 18, there are 1,157 projects installed and operating, and that have either received payment or are about to be paid. The installations add 9.4 megawatts of new solar capacity and total $25 million in rebates.

But California's rebates step down over time and as this happens company discounts like those offered by SolarCity are likely to become more important to customers looking for a price break. "The faster you convert the better your rebate," said Steele.

#End#

SolarCity's MV Solar Installations Reach 500 kW

One of the questions that I had when I launched the Mountain View Solar Buyers Group was: what will happen for demand for solar after the discount ends?

The discount was available to residents from Feb. 10 - April 30, 2007. During that time about 367 kW of solar was purchased from SolarCity (who I have worked for since June 5, 2007). I recently ran a report, and was pleased to find that from May 1 - Sept. 10, an additional 133 kW has been purchased from SolarCity by Mountain View residents and businesses.

At the same time, sales by other solar companies has been running ahead of last year's pace. Though SolarCity has the lion's share of the Mountain View market, other vendors are doing MORE business here in 2007 than last year.

Summer Solstice Potluck

The article in today's Mountain View Voice about the Summer Solstice Potluck reminded me that I haven't posted anything here in almost a month. That's because my new job as Community Programs Marketing Manager at SolarCity has been keeping me really busy. This is my first job with a start-up, and the pace is as hectic as I've heard it would be.

Community programs like Mountain View's have become incredibly popular, and we now have them running in Berkeley/Rockridge, Castro Valley, Rocklin, San Carlos, Menlo Park/Atherton, Los Altos, Los Altos Hills, and the Willow Glen/Cambrian Park/Rose Garden neighborhoods of San Jose. Oh, and there's also the Stanford program, which covers not only houses on Stanford land but also the homes of all Stanford faculty and staff within a 15 mile drive of Hoover Tower. And more to come soon! You'll find the complete list at http://www.solarcity.com/Default.aspx?tabid=137

Getting back to the subject of the potluck picnic -- it was really a wonderful evening and a great way for new solar system owners to share shop talk and ask questions of each other as well as the SolarCity employees who were there. About half a dozen installers were there along with an equal number from the marketing and management team.

Our own experience as solar owners has been going very well. We've had outstanding sunny mild weather for the last two months which is ideal for solar power production. Our 2.1 kW AC system is generating about 14.5 kWh per day, and we're only using about 10.2 kWh. The rest is being "banked" for our wintertime use, and my guess is that we will truly find a year from now that we have lowered our electricity bill to zero (except, of course, for the $5 or 6/month that PG&E charges for reading our meter and providing us with a connection to the grid).

It's a great feeling to know that our home's power is provided by free range organic photons streaming in from the sun. Instead of just heating up our shingles, they're powering our home! ;)

My New Job at SolarCity

The post below is something I have sent to everyone on the MVSolar Yahoo!Group:

Organizing the MV Solar Buyers Group was one of the most fulfilling things I've ever done. Once the sign-up period ended on April 30, I just didn't want to stop.

So, in mid-May I approached SolarCity about joining them as a Marketing Manager for their community programs. My goal is to take what I had learned in Mountain View and share it with Solar Champions in other cities and neighborhoods. It seemed to me that this would combine my passion for community work and the environment with my professional background in marketing and knowledge management.

I'm pleased to let you all know that SolarCity liked the idea and I have joined them as an employee. Today was my first day.

I want to continue to channel your feedback to SolarCity as I have been doing for the past four months. As an employee, I hope I will be even more effective in that role.

Sometime soon I will also be asking for your help in spreading the word about Community Purchase Programs to your friends in other communities where we have or soon will start programs. These include: Berkeley, Rockridge, Castro Valley, Stanford, Menlo Park, Atherton, San Carlos, Santa Monica and the Rose Garden, Cambrian Park and Willow Glen neighborhoods of San Jose.

Our Installation Starts Monday

Monday will be a red-letter day for two reasons. It's the last day for homeowners to sign contracts with SolarCity that will allow them to get the group discount price, and it's the day that installation of our solar system will begin.

Even though I've been working on the solar project for three months now, the phone call asking if we were ready for installation seemed like a bolt from the blue. It's hard to believe that in just 4 days we'll be solar owners.

Recap of Today's Meeting at Google

This afternoon Lyndon Rive of SolarCity and I were invited to make a presentation about the Solar Buyers Group at Google. Steve Lacy (a member of the Buyers Group) was our host.

As you may know, Google is currently installing 1,600 kW of solar panels. Some of them are being built as shade structures in the parking lot, and I parked near one of them. It looks like it's almost ready to hook up to the grid. The panels were not tilted, but were parallel to the parking lot. This probably makes for a very simple installation and minimizes problems with wind loading.

There were about 40 Googlers at the meeting, and, as you might expect, they asked very good questions. I think several of them will buy systems. There were many others in attendance who don't live in Mountain View -- I hope they will become advocates for solar in their home communities.

We Bought Our Solar System Today

A busy day! I went to lunch at Rotary with Twana. She gave a 30 minute presentation explaining the idea of a carbon footprint and how we are trying to cut ours in half in the next 3 years. The audience literally gasped when they saw how large a portion of our CO2 emissions come from air travel. Twana asked for a show of hands of members of the audience: had anyone ever calculated their carbon footprint? Not a single hand was raised.

Right after lunch I met with Don Giberson from SolarCity. He brought over the paperwork so we could finally order our solar system. There were lots of papers to sign -- about as many as when we bought our last new car. I signed everything and handed him the check for the downpayment. It feels good!

Our Site Visit from SolarCity

This afternoon we had our site visit to see how big a solar system we would need and what the best place to put it would be.

Don Giberson was the guy who came out from SolarCity. I gave him a year's worth of electricity bills (actually, a year's worth of projections because the work I've done in the last few months to reduce our consumption hasn't yet been fully reflected in our actual bills). We then went up on the roof.

I had expected that the best spot for solar panels was the east-facing roof (the side away from Bush Street), but Don found some shading problems from trees two yards away, and also from the numerous vent stacks on that side of the roof. Our south facing roof is very small, and also had some shading issues from utility wires nearby.

Don said that the west-facing roof is definitely the best place for solar for us. PG&E pays more for electricity produced in the afternoon, so a southwest orientation is ideal. We'll end up paying somewhere around $10,000 for a system that will virtually eliminate our electricity bill. (I project that we will use about 5,000 kWH per year in the future.)

While we were up on the roof two neighbors came by to talk about solar. One asked Don to call her to schedule a visit to her house. Cool!

Second Story in The Voice

Don Frances, the Editor of The Mountain View Voice, gave the Solar Buyers Group some really nice free publicity in his column today. He wrote:

Sunny side up

BRUCE KARNEY'S plan to bring bulk-rate solar to Mountain View — he's calling it the "Mountain View Solar Buyers Co-op" — is coming along nicely, it seems, after a huge turnout for last weekend's kickoff meeting at the Mountain View Senior Center.

"More than 220 people attended Saturday's meeting, which was more than twice as many as my most optimistic estimate," Karney wrote.

"I was particularly pleased to see individuals of all ages, from late 20s to late 70s, in the audience. It's the largest civic meeting I've been to in many years where people didn't show up because they were trying to stop a project."

Karney was inspired by the recent success of Portola Valley, which managed to strum up enough buyers — nearly twice the needed amount, in fact — to get a 30 percent discount from SolarCity, a Foster City company which installs solar arrays.

A discount of that size, Karney estimates, "brings the price of a kilowatt-hour of solar electricity down to about 10 cents — less than PG&E's lowest rate."

Not too bad. The next informational meeting will be Tuesday, Feb. 27 at 7 p.m. at the Mountain View High School Theater. For more info on the company, visit www.solarcity.com.

Solar Conversations at Chamber of Commerce Mixer

It's Valentine's Day, and Twana and I went to the Chamber of Commerce monthly mixer before going to dinner. Twana won a really nice gift basket with wine, dark chololate, and other treats!

Lots of people had heard about Saturday's successful meeting. Former Mayor Mike Kasperzak told me that he and his wife Lisa just got a quote on a solar system. By coincidence, the sales rep was a young man that Mike had known for more than 25 years. I like the fact that the solar industry is creating local jobs (unlike the fosssil fuel industry). Even if the panels themselves come from outside the US (some do, some don't), the sales, installation, and administration is all done locally.

Mike O'Farrell, the President of the Chamber Board, said that he would be interested in having a presentation about the Solar Buyers Group at Palm, where Mike is the VP of Facilities. I'll definitely follow up! I think that Alison Nelson, the CEO of the Chamber, is already in touch with SolarCity and planning on setting up a special info meeting just for Chamber members.

Standing Room Only at Today's Meeting!

Wow, what a great start for the MV Solar Buyers Group! I was expecting 60 people at the meeting at the Senior Center this afternoon, but 250 showed up! Jamie, the lady from the City who was staffing the door, told me that she had to turn several people away because there were no more seats available!

Almost everyone stayed through the Q&A, and there were lots of great questions. I don't know if there's any way that future meetings will top this one, but I hope they at least come close!

In one slide that Lyndon Rive (the CEO of SolarCity) showed, he said that installations could stretch out until December if the number of people signing up for the co-op is really large. Not good! I talked to him after the meeting about instituting some kind of "first to sign up, first to install" policy. He said that is a possibility. I hope so. It seems fair, and it will give people a strong incentive to take the plunge.