[Update 8/27/07: CitizenRE now has a competitor...]
There is a lot of internet hype out CitizenRE, a multi-level marketing company that intends to rent solar panels to homeowners for the same price of electricity you pay to your electric company. Sounds great, right? Low or no money down and a solar system on every roof. Maybe too good…
Most interested people have either environmental intentions, economic motivations, or both. Solar electricity is your LAST priority for the environment and your bottom line. Solar is sexy, cool, and holds great promise, BUT if you weighed the costs and benefits, for the average homeowner, there are many things they should be otherwise doing – buying a more efficient car, putting in CFL lightbulbs, becoming a vegetarian, etc.
There’s always a balance between getting in on a “deal” and “too good to be true.” A deal on a car is one thing. Everyone buys a car, understands what a car does, how they’re made, where they come from, and has relatively good information about the transaction. How many people understand solar panels, how they work, are made, etc?
There is very little concrete information about this company other than “rah rah” and hype. They are recruiting salespeople through newspapers, Craigslist, and blogs. There is very little critical analysis, but here are two blogs that aren’t just sliced-bread:
EE/RE Investing (somewhat supportive of CitizenRE)
Advertising “Interview,” i.e. softball questions and answers (from CitizenRE themselves)
Renewable Energy Now (skeptical of CitizenRE)
I am a skeptic of CitizenRE in particular (though the business model will certainly emerge in the future). Here are the big questions:
1. Where is this 500 MW plant being built and is it under construction now? Where are they getting scarce raw silicon supplies? Why hasn’t anyone in the industry heard of this plant? Where is the money coming from?
2. Where are they developing an installer network? Will they be NABCEP certified? Why would existing dealers with their own businesses want to join this network?
3. They claim to be able to install in any state with net metering and a retail price over 7 cents/kWh. As such, they are willing to accept wildly variable profit rates – different electric companies and states have very different economic conditions. Is this realistic? Are they really doing business in every state with net metering?
4. Two companies in the US offer this same “rental” model on a commercial level (SunEdison, MMA Renewable Ventures) but only at a scale of at least 500 kilowatts or larger, i.e. over 200 times bigger than a home. This model is still emerging and developing and other large companies are considering getting into it on large installation. Why would CitizenRE have struck upon something that these companies haven’t at a size 1/200 of what is typically economical?
5. Why is there such a lack of information? Wouldn’t transparency help them answer these kinds of questions to the industry? Why has no one in the industry heard of them? Why aren’t they at solar conferences presenting their information? Why the hype and unrealistic dates and targets? (Proprietary jargon doesn’t cut it – the construction of a manufacturing plant can’t really be hidden.)
More to come as I put out feelers to some industry contacts…
UPDATE:
I don’t doubt the business model. I think it has everything a consumer could want – no risk, economic sense, etc. Like I mentioned above, it’s happening in the commercial, i.e. large, markets. It’s not a matter of “if” but “when”. But either we have the next Google on our solar hands (believe me, prove me wrong), or the entire solar industry has been grossly overlooking something.
In fact, the entire energy industry would be wrong. Why aren’t heat pumps, wind turbines, and even regular old furnaces managed this way? The answer: capital. If they get 10,000 people to do this at 3 kilowatts each, they need at least $150,000,000 to set-up systems on people’s houses. Add in a 500 MW manufacturing plant, worth another few hundred million…
They must have the Google Foundation as one of their funders…In fact, that’s my prediction. Somebody big has to be behind this (although their marketing leak/rumor strategy sucks). And 10,000 people banging down the door come October, won’t be fun to deal with.
January 26, 2007 at 12:37 pm |
Since I’m listed as the “pro” side, I thought I’d take a shot at answering some of your questions. (I astually consider myself “hopeful”… I think this is the business model for installing PV on homes for the future…To paraphrase Amory Lovins, people want power, not solar panels… but I do not know that CitizenRe is going to be the one to pull it off. Getting their plant up and running at reasonable cost is the biggest barrier I see.)
1. They have decided to keep a media blackout in the startup phase… basically because they want to make sure their website is working before they start trying to handle the volumes. I have heard that they are barely keeping up with volumes as it is. Basically, CitizenRE is still in Beta. The plan a big press release in the next two weeks. So far, we only know that the plant is “not in Texas” (one of the rumors.)
2. I seriously doubt the installers will be certified beyond the legal minimum. They will be working with just one type of system, and the installers will have specialized training on just that one type of system. This will be a much more assembly line type operation than the current customized installers. Which may allow them to get the cost reductions in installation that they need. Existing installers may not want to join, but they may have to… since CitizenRE is a much better financial deal for customers, and they can get it to work, the traditional installers are going to be hurting for business.
3. By theory is that they are signing up customers in all states with net metering, but only those customers in states with big incentives are going to see their panels anytime soon… as they lower their costs through volumes, people in other states will start to get panels, but it may be a very long wait. But it cost them very little to sign a customer, so they have no incentive not to start now. If I lived in a low incentive state, I would not rush out to sign up.
4. CitizenRE is the first to use this model on this scale. I think someone will make it work eventually. The first mover advantage may not be enough to make it work for them, but just becausse they are first does not mean that tehy won’t succeed. Think Amazon and Ebay…. and pets.com. We just can’t know, but I’m glad they are trying.
5. We’ll find out more with the promised press release. Again, my theory is that they wanted to start slowly, and keeping a media lid on it means that they don’t have a big volume surge. I agree the manufacturing date is unrealistic… unless they started construction 1-2 years ago. Again, we’ll see.
There are real questions, but at the moment, CitizenRE is the only real way to get solar in an economical fashion. Even in a high rebate state like CO, PV has a 25-30 year payback… I have better uses for my cash. I’d rather rent, even if there is only a 50-50 chance that my panels will ever materialize. If I had to pay for them out of pocket, I wouldn’t buy them at all.
January 26, 2007 at 2:06 pm |
Become a vegetarian? I’d think that’d be quite expensive, in terms of utility.
But economics isn’t just dollars. And there are other reasons to go solar than the environmental ones. People buy hybrids not because they save energy, but because they do it so conspicuously. Nothing gives a big green finger to those self-righteous Joneses than slapping some solar on el rancho relaxo.
That said, I agree that the chances of this working out aren’t too great. I wouldn’t sell it short right away, but once the hype dies off, the niche market just isn’t big enough to keep it going.
January 26, 2007 at 2:10 pm |
Actually, you know what might really sell? FAKE solar panels!!
And if there is a network effect, that could boost citizenre’s sales!
Conclusion: They should simultaneously start a spin-off that installs fake solar panels. If they’re substitutes then you’ve decreased the firm’s risk. If they’re complements then you capture more of the product’s positive externalities!
January 26, 2007 at 3:33 pm |
The skepticism is founded on two big leaps:
1. Business model – This isn’t a new concept in commercial scale solar but is still emerging, and moving it to residential is a leap.
2. Manufacturing facility – I don’t claim to know the industry through and through but a new 500 MW facility isn’t on anyone’s radar. And you don’t just build it and pump out new solar panels. Once it’s built, the panels need to be UL certified, tested for state requirements (CEC), etc. The fact that they say fall 2007 either makes them liars or naive, regardless of the business model.
January 26, 2007 at 7:42 pm |
Mr. Styler also responded on Renewable Energy Now’s blog…He has an active RSS feed and time to burn I guess…
From Rob Styler, President, Powur of Citizenre on Energista.org, where I cross posted this:
Your claim that being a vegetarian or buying the right car has a better cost/benefit analysis than going solar would make sense if the homeowner had to buy the panels.
With our model they just pay the same rate per Kwh that they paid before.
Yes, we make more money is certain markets, but we have to prove our model in every state and every climate for our investors.
You will have plenty of information soon. We are not trying to be secretive, just manage our growth. Once people know who is behind Citizenre, the growth will be exponential.
I understand that some people are skeptical. I am proud of the solution we have created. Watch the news over the next weeks.
Look what ABC news said about us: http://www.10news.com/video/10817092/index.html
And here is an article by the Associate Press: http://asap.ap.org/stories/1159211.s
Change always makes people nervous. Right now we are attracting the early adopters. When our model becomes obvious to everyone, the rest will join the solution.
If you want to see our video that explains our offer or see how much you would save with our solar calculator (lower left of page) just go to http://www.jointhesolution.com/join
Rob Styler
President, Powur of Citizenre
January 27, 2007 at 12:28 pm |
Not exactly confidence-inspiring, is it?
February 5, 2007 at 12:32 am |
[Editor's Note: They certainly love the exclamation!! points...and the point is that there aren't a lot of data and facts to evaluate right now. Just claims and predictions - you need actual installations to have data.]
Join in the solution and stop being part of the problem! I have investigated this company since its inception. I have spoken to it’s principals and have evaluated the technical side of this company. I have 28 years of electrical engineering background and give a “GREEN” light to sign up for this “GREEN” energy alternative!
Go to:
[WEBSITE LINK REMOVED]
and read all the data and facts – make your own educated decision to sign up for SOLAR!!
February 5, 2007 at 6:40 pm |
I have one major question for all of the doubters and critics of CitizenRe. Why do you want this to fail? That’s the only reason that I can think of for all of your negativity. In all the hype and hoopla about CitizenRe you failed to mention that it costs nothing to sign up and you and I and anyone else that signs up loses nothing if it fails.
Finally, I don’t see any alternative being offered except wait for the ungoverned to pass legislation that is going to force industry to become involved (via Al Gore… HA, HA, HA). Come to think of it, even Al Gore wasn’t a skeptic like you when someone mentioned the internet.
At the present rate of growth within the green energy industry we will all be long extinct before more that 5% of our energy is converted to renewable resources.
Is that what your aiming for?
February 6, 2007 at 11:33 am |
Here’s the answer: It’s called critical analysis of facts and reality.
There’s no vendetta – don’t question my passion for renewable energy or the environment. Do you use less than 100 kWh/month? Did you use less than 100 gallons of gas last year? Did you reduce your heating use 30% in a Minnesota winter climate? Do you track your carbon emissions?
The CitizenRE marketing machine exceeds anything that can possibly be tangibly delivered. If CitizenRE had a manufacturing plant built, had solar panels that were UL certified, had a cadre of certified solar installers, had a open dialogue with the existing solar industry, and started in a select few states with the best economics, slowly building market confidence and a track-record, I would be their biggest fan.
But they don’t have a manufacturing plant, no one in the solar industry has heard of them, they haven’t installed one system, and the marketing hype (!!) is excessive (it frankly reminds me of the Iraq War marketing wash).
And if it doesn’t deliver, it disillusions thousands of consumers.
Do you realize how many thousands of people still say that solar energy (of any kind) doesn’t work because they had a bad experience in the 1970s and 1980s with solar hot water scams?
I didn’t think so because 90% of the CitizenRE army signed up on Craig’s List in the last 6 months.
And before you write saying that you’re all this and more, I believe you. But for every one of you, there are 20 that aren’t.
February 18, 2007 at 10:42 pm |
check out this blog about Citizenre. Some useful info, PLUS a powerpoint slide of the exact test Sales associates have to take. definitely worth a look.
http://logiq.wordpress.com/
March 6, 2007 at 10:37 am |
I actually spoke with an Ecopreneur on March 4, 2007. I was told the “headquarters” were going to be located in Massachusetts and the price I was quoted for kwh rate was quite a bit higher than what I pay now (I was told 15.3 and I pay 9.1). The representative admitted to not knowing all the details but was more than happy to sign me up. I am hopeful but I can see there are many hurdles to cross.
June 21, 2007 at 8:27 am |
Incredible! Indeed it’s too good to be true.
It really has something to do with what I’m teaching at http://www.mlmtraining.org