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.
I think the politically correct term in Multi-Level Management. The term Pyramid Scheme might offend someone. :P
On a more serious note, I thought the best way to get more money out of a customer than the advertised price of the product was to put it on a lease with an interest rate.
"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.
But, this is not completely free. There is a $500 deposit once you approve the design of the system.
s -selling-solar.html.
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/.
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-user
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!
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...
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
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.
...they repo your whole roof.
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 ?
Wanna fight ? Bend over, stick your head up your ass, and fight for air.
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.
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.
Shady business in solar power? I see warning flags popping up all over the place!
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
I don't understand the skepticism. The company is willing to install a power generator on your roof free of charge. Even if the company goes under, it wouldn't make sense for the new owners to remove the panels as long as they have a revenue stream coming from them as is.
As far as I can tell, the only way you could possibly get screwed is if the market price of electricity on the public grid falls below the rate to which you agree for private provision. But if the market price rises, you get an even better deal. People are rational and will evaluate signing one of these contracts based on what they are paying for electricity now and expect to be paying in the future.
Who cares about the company's marketing method? What matters is whether they can make the business model work. This is a fantastic idea environmentally and it seems to be good for the consumer too. The details are all going to be in the contracts between homeowners and the company, not the company and its sales force.
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.
Unless this company has some patent or something, nothing will stop a more traditional company from entering this market, if it is an attractive investment.
Ditto non-profits and cooperatives doing the same. With the tax-advantaged status if a non-profit and the lack of a need for a positive rate of return, I expect to see local eco-nonprofits start doing things like this even if it's not a good commercial investment.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
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/, 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/ - if you see any flaws in that analysis, let me know! That's my 2c. PJ
Sorry to be rude, but you really need to be more accurate in your math if you're going to opine on this. First of all, it's not nearly so small a fraction wholesale. Typical costs installed are about $8/watt, which covers quite a bit more than the panels, which cost about $4/watt wholesale.
However, just take your $10,000 system. Now in reality that only will provide you with about $50 of electricity per month at $4/watt (2500 watts) but even if it did provide you with $150, you have forgotten what every mortgage holder knows -- that money today is worth far more than money (or electricity) in the future.
So $10,000 at 7% interest in fact takes 85 months, not 67 months to pay off at $150/month saving. This doesn't seem like a big difference, but it's because your price numbers are off. At the real price of solar, a $10K system provides, as noted, only $50 worth of power, and you can never, ever, in any number of months, pay off $10,000 at $50 per month because the interest per month is more than $50. So the math error becomes a difference between a real payoff rate and infinity.
Has it been over a year since you last donated to the Electronic Frontier Foundation
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
I had to look up GIYF. I honestly thought it was 'Google it, you fuck!', but as it turns out, it's 'Google is your friend.'
Who knew..
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."
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.)
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
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!
The Christian Right is Neither (Christian nor right). See: Matthew 23, Matthew 25, Ezekiel 16:48-50
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.
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.
They don't ask you for money until they put the solar panels on your roof. At that time a $500 security deposit is required. I don't see how this could be a scam on the consumers. I guess they could be scamming their investors, but that's not my problem!
I keep seeing comments about "government subsidies" here. THERE ARE NO GOVERNMENT SUBSIDIES - only taxpayer subsidies! I hope all you taxpayers are happy subsidizing this and all the other solar wet-dream schemes!
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).
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.
A republic cannot succeed till it contains a certain body of men imbued with the principles of justice and honour.
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,