Power to the People
Linda
Daly
David Plunkert
With Sungevity’s solar-panel program, Angelenos can reap the dividends of a sunny clime
“My Million Solar Roofs Plan,” Arnold Schwarzenegger said in 2006, “will provide 3,000 megawatts of additional clean energy and reduce the output of greenhouse gasses by 3 million tons...which is like taking a million cars off the road.” Thus the push was on to make California the nation’s leader in solar power.
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.”
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.
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.
LINDA DALY writes on things eco in prettyingreen@latimesmagazine.com. She is fueled by a belief that the green revolution will one day reach middle America.
Categories: Business / Living Green / Shades of Green / Tech / Technology / Trends
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The only catch is in the fine print and the quality of the product they install. Sungevity is still losing money. If they don't expand they will fail. The solar PV panels they install are the cheapest they can find. These products will not stand the test of time and the companies that sell them will not be able to stand behind them. At the end of the "lease" Sungevity will offer to buy the system at an unknown price or offer to lease the solar system to you again. The client will pay much more than just buying and owning a quality product. If you sell your home you have to transfer the lease or buy the solar system at whatever price Sungevity sets. This is a can of worms.
If something is too good to be true it most likely is.
Cheap is not better and in this case it is like leasing a couch from the furniture store. You pay twice for a cheap couch you never own.
Posted by: Mark Smith | 07/04/2010 at 04:29 PM
Learn more about Mark's company and how to go Solar in the Santa Monica area here: http://www.solarforward.com/
Posted by: John | 07/05/2010 at 12:00 PM
Interesting that this writer works for Solar Forward. My source tells me Sungevity has been in the black for the last few months--where are you getting your info? Their panels have the standard 25 year warranty common to all panels. Perhaps your company does not offer a lease, and that's why you're biased against it. A lease is a great option for those who can't afford thousands upfront to go solar.
Posted by: anonymous | 07/05/2010 at 04:15 PM
While I commend Sungevity's efforts to bring solar to the masses, homeowners should be cautious of an entity in the Bay Area that negotiates a firm price without a site visit, then hires a local sub-contractor at a rock-bottom price to install the system. All solar contractors are not created equal and your home's roof is vital!
Additionally, all solar leases or financing agreements are not equal and some have draconian terms should you sell your home and need to get out.
Please read my blog post at http://blog.heliopower.com/2010/03/solar-financing-agreements-the-fine-print/ for insight as to how to evaluate these agreements.
There are several great companies out there in addition to Sungevity offering these programs.
My company, HelioPower, designs and installs your installation exactly as if you'd purchased it and uses our partner, SunRun, to manage the financing and monthly lease agreement. That way you have each company doing what they do best.
The good news is that solar is affordable now and hundreds of homewoners are going solar in LA each month.
Posted by: Derek Girling | 07/12/2010 at 04:01 PM
Why not just steal twice as much money from taxpayers and make the solar panels completely "free"?
Think of the savings then.
Posted by: RSweeney | 08/19/2010 at 02:36 PM
So one of Kennedy's great achievements is working to halt new oil development in Papua New Guinea - - which allows the people there to continue to live in poverty by depriving them of jobs.
But hey, when you're among the Best and Brightest of Western Elites, it's incumbent upon you keep the Third World intact so you can feel good about yourself as you enjoy your First World lifestyle.
Let 'em eat beatlenut, Danny !
Posted by: Donald Bryan | 08/28/2010 at 10:45 AM
It's betel nut, you loser. You really think that bring an oil company to a developing country is a good thing? You're the one sounding like a western elitist when you say stupid crap like that. I'd love to see what you've done to help change the world.
Posted by: Sylvia | 09/02/2010 at 01:22 PM
That's golden aim. We must that kind of projects! It could be environmental and health friendly.
So keep it up! I admire you for having concern with the mother earth.
Posted by: Sam@ home business | 09/22/2010 at 11:16 PM
Leasing? 30% less? Spend, spend, spend. I can't afford the utility lack-of-service already foisted upon me by DWP and now they want me to pull money out of my... what? Nothing up my sleeves... no blood in this turnip.
If they wanted us to have the solar panels, it would be subsidized so we could all convert. Same stuff with electric cars... you gots to be willing to carry a buttload of debt or earn lots and lots of moolah.
Posted by: hairycarrion | 11/20/2010 at 09:56 AM
I really enjoyed this article.
I am always trying to foster good relationships with people who can help my cause.
Thanks for this short and informative post.
Posted by: coach outlets | 12/19/2010 at 08:14 PM
The idea behind this is great, but as with many green related things, there is always someone going to try and make a fast buck out of the latest fad (although I'm not suggesting Sungevity are doing that!). I have been looking at portable solutions for people like me who rent, there are some out there that do not connect to the grid, but they are not huge so it is doubtful as to whether there would be any extra electricity to go back into the grid anyway. The RV portable systems are reasonable and I can unbolt them and take them to wherever I rent. Although not fantastic, it would be nice if there was more of these type of portable systems available, there are a lot of renters out there who are green also. Don't write off the hybrid cars folks, Toyota are doing them interest free, I got one a year ago and wish I had bought one before, at around 50+ miles to the gallon the small extra cost (you can really get a good deal if you take the day off work and be prepared to sit and argue with them, go in with a payment figure in mind and do not deviate, walk away after a few hours, they will call you back and give you the deal you want!) I am now reaping the rewards. High gas prices? Bring it on.
Posted by: Jim Satriani | 03/03/2011 at 08:35 AM