Tuesday, August 24, 2010
The governor’s plan included $2.9 billion in incentives to residential and commercial owners who install solar electric systems. While developers building more than 50 single-family homes will have to offer a solar-power option to their customers beginning in 2011, buying solar continues to be cost-prohibitive for existing structures. So how can Californians reach the million-roofs goal by the proposed deadline of 2018?
The Los Angeles Department of Water and Power is convinced it has a solution that is win-win. For the DWP, more solar panels means a further reduction in the use of fossil fuels and an increase in renewable energy in its portfolio. For customers, there would now be an achievable alternative to traditional power, one that reduces their carbon footprint and saves them money. Add some healthy federal tax credits for individuals and private companies that enable customers to convert to solar, and you have the ingredients for a successful formula.
The X factor? Danny Kennedy, founder and president of Oakland-based Sungevity. Having had a number of jobs at Greenpeace since 1992, Kennedy’s eco-accomplishments are impressive, including working to halt new oil development in Papua New Guinea and starting California’s Clean Energy Now! campaign. He began Project Underground in 1996, helping indigenous communities fight oil and mining companies, and in 2002, he became campaign director of Greenpeace Australia and the Pacific.
However, it was Clean Energy Now! that set Kennedy’s current path. The spark for Sungevity can be traced to Kennedy and his Greenpeace team’s significant influence on the passing of San Francisco’s solar-reform propositions B and H, after which he saw an opportunity to create something unique within the burgeoning industry. “The kind of people inhabiting [solar] at that time were pioneering engineers who did not have the customer-service component,” he says.
So in 2007, Kennedy and two friends—Alec Guettel, a former deputy director at the EPA, and Andrew Birch, a former business-development manager for BP Solar—hatched a business plan to lease solar panels after using new software that enables them to view a customer’s roof remotely. Until then, solar was proffered largely through sales, which often put it outside the reach of the average consumer.
“We built the software with a company in Sydney called Extro,” Kennedy says. “The ability to combine 3-D models of buildings with the mashup of aerial and satellite photos is pretty unique. Microsoft licenses the image feeds to us, and they said they had not seen such a cool tool before!”
With financing from U.S. Bancorp, Sungevity was on its way to solving the conundrum of homeowners having to spend more to convert to solar than they would save by doing so. “Some of our timing was predicated on...an appreciation of incentives like the California Solar Initiative,” he says. “We could have started this in Europe or Australia, but we did it here because of the political setting and the can-do attitude of California entrepreneurs.”
But not everyone was on board, Kennedy says. “My partners and I had to withstand a lot of naysayers. They did not think we could do remote solar design or [online] sales because it had never been done.”
Three years and 500-plus roofs later, guess who’s having the last laugh? Jim Ulrick, a Bay Area customer, says, “I had been talking to [Sungevity] since they added the lease option. They evaluated my electric bills, then sized a system for me and said what the lease system would cost. The savings from PG&E was greater than the lease payment.”Here’s how it works: By using the imagery it gathers online, Sungevity can assess your roof’s sun exposure. This bypasses the need for someone to come out to your house. You just put your address into their system and provide a breakdown of the past year’s power bills, and within 24 hours, you have an iQuote for the leasing—a firm price.
Putting the entire quote process online, Kennedy says, makes Sungevity “the Netflix of alternative energies.” No trucks, no uniforms, no wasted fuel. Eighty or so employees in Oakland handle everything, with a few field reps in different counties to assess the maintenance for each roof. Installation and upkeep are free, and Sungevity works with existing roofing, electrical and solar contractors rather than staff their own.
While leasing is hardly revolutionary—there are other companies in L.A. who offer leases—allowing customers to get accurate pricing online is. When the lease is up, customers can opt for another five-year term. Or as technology evolves, they can upgrade.
After working on 10-year lease programs with PG&E customers up north, Sungevity is primed to take advantage of the 20-year lease agreement and substantial rebating offered by the LADWP to new solar customers who lease through a third party. The process is complex but beneficial.
You, as the homeowner, lease from Sungevity, which entitles you to both the federal tax breaks and DWP incentives. You sign over the incentives to Sungevity, which in turn, uses the captured tax credits to minimize the cost of the panels, enabling the company to lease at up to 30 percent off cost. Sungevity pulls energy from the DWP grid on shady days and puts it back on peak sunny days—with the utility’s blessing.
Customers still receive a bill from the DWP—for the “water” part of the equation and for whatever power is pulled off its grid—as well as an invoice from Sungevity. But those two combined consistently prove to be less than one’s prior charges—and you’re helping the planet.
Kennedy believes that within five years, Sungevity will be a lower-cost provider of electricity than mainstream sources. Daniel Kammen, founding director of the Renewable and Appropriate Energy Laboratory at UC Berkeley, agrees. “What is so exciting about what is happening in solar today,” he says, “is that clever innovations on financing and service are now matching the innovations in the technology itself. Sungevity—along with the several other companies that can assess a home’s energy needs remotely—offers the potential for improved service and reduced cost for clean energy.”
Currently, the DWP is working on integrating renewable energies into the current grid to become a greener utility overall. Hopefully, with innovative minds like Kennedy’s, L.A. can lower its use of fossil fuels while hitting the goal of a million solar roofs. Let the sun shine.