Solar Cells Info

SolarCity challenges residents to place big orders
By Stephanie I. Cohen,
South Orange, NJ, Oct 30, 2007
Source:Marketwatch.com
http://www.marketwatch.com/news/story/neighbors-go-solar-together-save/
story.aspx?guid=%7BDA1E6E39-0126-4459-9A3F-2298B88EE487%7D

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 Clean Power Estimator 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.