Slashdot Mirror
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.
"So far, more than 700 people have enlisted as independent Citizenr sales agents -- what the company calls 'ecopenuers' "
The boldface buzzword is a warning sign: stay away, stay very far away.
I would love solar (or some other alternative) energy for my house. Love it. But it's just too expensive.
That said, this is kind of nuts. They're using my roof space, selling power back to the energy companies and I still have to pay them?
Now, set this up so I pay them a flat-rate for a few years (even a rather long time, like 7 years) and I would absolutely consider it.
In the land of the blind, the one-eyed man is kinky.
This works under net metering, so it is not really a matter of running out of electricity. There is no storage in these systems except that provided by the grid and its responsiveness to changing loads. Net metering runs over a year, so an unusually cloudy year could affect revenues, but there are 40 states with net metering laws, so it would have to be cloudy all year everywhere for this to be a problem.
I suspect there's more to it.
I was roughly quoted something on the order of $50,000 for a solar power system for my house. I know I could build it for something more like $15,000, so that company was already making $35,000 for labor and other misc expenses.
Now, where these people are "loaning" you the hardware, that means you're getting say $15,000 retail worth of equipment, which is probably more like $10,000 wholesale. Really, it's probably $7,500, but $10k is a easier number to work with.
Say an average home pays $150/mo for power with the system in place, they've made their money back in 67 months. Anything after that is pure profit. It's kinda like leasing a car. You're paying for the car, but in the end, you don't own it.
I strongly suspect somewhere in the fine print of the document, the life of the "loan" extends until you've used enough power, and paid their "reduced" rate, to cover the cost of the "loan". More than likely, you're wrapped up in a 80 month contract of at least $150/mo. It's a good long-term profit scheme, assuming they can get the customers in. Probably if you default on the loan, you are now responsible for their early termination fee, which I'm sure is roughly the cost of the equipment, plus a small profit.
Really, it's not much different than what cell phone providers, and satellite TV providers are doing. Consider someone like DirecTV. You get a "free" satellite system, which includes 4 receivers and a dish, installed. With this, you're signing a 2 year agreement. You're really getting a few hundred bucks worth of stuff, and they get you in a service contract for a couple years. More than likely, you'll keep using the equipment beyond the end of the original contract, so they'll continue to make money for a long time.
Personally, I'd rather own the solar equipment, but hey, if they want to give it to me, cool.
Serious? Seriousness is well above my pay grade.
The ownership of the systems stays with the company, so recievers would be collecting them, or the bill in the worst case.s -selling-solar.html
The roof, shading factors, past electric usage all go into the system design. Under the 25 year contacts, there is one free deinstall-reinstall in case you need to move or reroof.
Installs are performed by franchises. These are brick and mortar. The network marketing is for sales. It is working as well.
These systems are only available where there is net metering. You use up kWh credits when the weather is cloudy that you build up when the weather is fair.
The amount of roof the system needs depends on how much electricity you use. The panel configuration is still not set but they will be 15% efficient. So, you can take 340 W/m^2 http://en.wikipedia.org/wiki/Solar_radiation day night average mutiply by 0.15 and get about 50 W/m^2 out. For a 1000 kWh/mo bill you can work out that you use 1.4 kW on average so you need about 28 m^2 of panels, about 5 meters square. The tilt and orientation of your roof is also important and the amount of annual cloud cover. Ground mounted systems are also offered.
You can find out more following links at http://mdsolar.blogspot.com/2007/01/slashdot-user
Thousands upon thousands of people have done it, and continue to do so. The economics are well-settled at this point.
Photovoltaic generation on a house-load level IS cost-effective in one situation: New construction in rural areas, where it displaces running a long (and high-priced) grid connection. Then the money that would have been spent on the grid tie can be spent on the capital cost of the photovoltaic system instead.
This one requires a grid tie for net metering, so that displacement is not available.
Unfortunately, equipment costs for grid-tied photovoltaic equipment is still high enough that you're ahead to invest the money it would have cost and spend the interest buying power for the life of the system you didn't install. (This could change with enough lowering of equipment costs or raising of electric power prices.)
If you have a source for equipment inexpensive enough to back up your claim, please let us know what it is. I have two houses where I'd LOVE to install such a system.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
California has a major share of the solar market due to strong incentives. For each rebate, the state lists the system size, seller, and cost. There were about 15K installs in the last two years. Of the over 600 sellers listed, many are "green driven" types with few installations and not much business motivation. Below is the full list of 39 sellers that have over 100 installations. They are much more likely to return calls.
w ables/COMPLETED_SYSTEMS.XLS
PowerLight Corp. (798 installs)
Renewable Energy Concepts, Inc. (712 installs)
GE Energy USA, LLC (473 installs)
Gaiam Energy Tech dba Real Goods (449 installs)
SPG Solar, Inc. (447 installs)
Carlson Solar Inc. (334 installs)
Regrid Power, Inc (320 installs)
Akeena Solar, Inc. (311 installs)
Premier Power Renewable Energy Inc. (278 installs)
Unlimited Energy (274 installs)
Sun Light & Power Co. (233 installs)
Sharpe Solar Energy Systems, Inc. (219 installs)
GenSelf Corporation (218 installs)
Mohr Power Solar, Inc. (213 installs)
Southern California Solar Inc. (202 installs)
Helio Power (198 installs)
Advanced Solar Electric (192 installs)
Cooperative Community Energy Corp. (190 installs)
Altair Energy, Inc. (188 installs)
Borrego Solar Systems, Inc (183 installs)
Next Energy Corp (181 installs)
Borrego Solar Systems Inc. (174 installs)
M C Solar Engineering (171 installs)
Marin Solar, Inc. (170 installs)
Sierra Pacific Home and Comfort (166 installs)
Sharp Electronics Corp. (160 installs)
Energy Efficiency Solar, Inc. (156 installs)
Clean Power Systems, Inc (150 installs)
Solahart All Valley (144 installs)
Power Independence Electric (thru Home Depot) (137 installs)
Sun First Solar (129 installs)
Plan It Solar (126 installs)
Revco Solar Engineering, Inc (123 installs)
New Vision Technologies, Inc. (123 installs)
Solatron Technologies, Inc. (122 installs)
Solar Technologies (118 installs)
Solar Works (118 installs)
Independent Energy Systems, Inc. (106 installs)
TMAG Inc dba Stellar Solar (Home Depot) (102 installs)
Source data from http://www.energy.ca.gov/renewables/emerging_rene
Hmm.. I didn't know that. I also checked you facts, and it's 41 states + D.C.
Thanks
Aero
Please stop hurting America -- Jon Stewart
No, this is actually a rental. If you break the contract, you lose your security deposit and that is it. The company can still make money with the system sitting on another roof. The contact does have a lot to it though. You can read it by clicking on any of the links at http://mdsolar.blogspot.com/2007/01/slashdot-users -selling-solar.html and clicking "Reserve your System."
From wikipedia: "A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered."
In this case, the money exchange isn't primarily for enrolling other people -- and there is an actual product/service being delivered: energy. It may be a scam, but it's not, strictly speaking, a pyramid scheme.
It's also not a Ponzi scheme, which "involves paying abnormally high returns ("profits") to investors out of the money paid in by subsequent investors". They're offering a service, not paying "abnormally high returns".
This *could* be called MLM -- which you are understandably suspicious of: "Multi-level marketing has a recognized image problem due to the fact that it is often difficult to distinguish legitimate MLMs from illegal scams such as pyramid or Ponzi schemes".
In a legit MLM system, the majority will not make as much money as the founders (the Amway president will always make more than people who simply bought Amway products -- duh), but that doesn't mean that people down the tree will *lose* money. They exchange money for a service; the fact that it was sold to them by another customer is irrelevant.
I've signed up with CitizenRe as well, and I have not chosen to be a "ecopreneur," so I have no referral link to place.
To answer your question: yes, I would love to own the system outright, and to outfit it with a large bank of deep-cycle batteries, etc. However, I do not have the $35-50,000 that such a system would require, nor do I have the credit to finance such a system. Therefore, CitizenRe, with their virtually "no risk to either side" contract, is the best option for "going green" and also saving a whole bunch of money.
Right now, CitizenRe has nothing about me except a name, an address, a telephone number, and a signature on a piece of paper indicating I will purchase all the electricity their solar cells can generate for a period of 25 years at $0.08/kWh. I predict this will be an excellent gamble, as energy prices are unlikely to fall dramatically (right now, the average rate for electric service in Texas is $0.124/kWh), and I will still be generating electricity in an environmentally-friendly manner.
These are the reasons I signed up. Not to make "gobs" of money, or to try to recruit other people. I did so because I wanted to, and without selling, so they let me.
A quick read of the article shouws you can't do math and have NO idea what you've signed up for ...
FTFA:
So, either you get a unit large enough to supply all your needs, in which case you're going to be paying for a lot of unused ppwer, or you pay for a unit that's undersized, still costs you money even when you're drawing ZERO power (like when you're on vacation, or those days when nobody's home, the heating and AC are off, etc ...).
You'd be better off to just find one energy hog in your house - say your PC - and hook it up to a UPS charged by a bank of solar cells, after replacing the UPS battery with a larger deep-cycle marine battery (the UPS battery is only an el-cheapo sealed lead-acid anywhay).
Return on Investment for solar panels that generate electricity is about 5 years and that's WITH state rebates and federal and subsidies. After that it's gravy but panels only last around 25 to 30 years. According their website, they are building a plant that will produce enough panels for up to 100,000 customers per year. That's IF they are actually building something, somewhere - details on their website are pretty murky about this subject. From what I understand, it costs a fortune to build a factory that can make that many panels per year.. (If anyone knows an approx. number please reply w/ info) I guess they COULD just buy them from China, where most panels come from, and assemble them in Cali or elsewhere in USA and thus have the right to label them "made-in-USA" :)
Citizenre's burn rate for the first year would be $2,000,000,000 (2bn) for 100,000 customers PLUS cost of plant, employees, marketing and other expenses. Where are they going to get this kind of cash??? Ah, that's where YOU come in
For a bag full of money, you can help them spread the burden of that $2billion+ burn. If things don't work out, you'll get your empty bag back.
If they continued to install panels for free @ 100k units per year, they would ALWAYS lose money - even after year 5, the first batch of customers would only net them 360million AND that's assuming their customers would pay $300 per month to them directly to heat and cool their house. (In USA most houses are gas and oil heated, so this number would be a lot lower. If they sold excess power to local utilities, this number would be a lot lower as well)
So the finances make no sense - if you are going to spend $2bn, you may as well build a solar, nuclear, etc. power plant, somewhere in Arizona or even California where there's a lot of sun all year long. Then sell power to utilities since they already have steady customers AND excellent infrastructure to deliver their and your "product".
If Citizenre's customers stop using (and paying for) the electricity from these panels, or even worse, rewire and steal power, what's Citizenre going to do? Spend money and have someone come and remove these panels? That wouldn't be cheap plus you would have to cover repairs to the roof since most solar installs are permanent and require solar panels to be screwed into the roof or south-facing wall.
About five years there was a company that charged next to nothing for Internet terminal "PC"s that customers could purchase in major electronics stores (with cash) and take them home (without any kind of commitment!) This company was supposed to make money by charging customers for Internet access since device was dumbed-down to do just that. Well, to make this long story short, many dishonest customers purchased the device but did not activate and sign-up for Internet access. They hacked the box and put Linux on it. Back then LCD monitors were expensive and this box came with one as a all-in-one unit. The point is that once they hand over the goods, there is not much Citizenre can do. (customers can put a tarp over it to speed up that burn rate:)
I spent about 15 mins reading reading their website and was not impressed with CEO's credentials (sounds like some web marketing guy who jumped from company to company) and was alarmed by their "Senior Vice-President of Direct-Sales"
this Sr. VP was directly involved with one of the biggest scams in the 1990s in "direct-marketing" when he was at Equinox. not only was he scamming, he even had the balls to write a book about it. (maybe finally woke-up and didn't want to be arrested like Enron's senior management) Below is Julian Wise's review of Rob Styler's book that I copied from Amazon.com:
'This book is an absolutely fascinating read for anyone who came into contact with Equinox International, the Multi-Level Marketing company that flared across America in the early 1990s and lured thousands of Americans into handing over their money, time, and, most often, their self-respect in pursuit of quick fortunes. Equinox,