by Jason Coughlin
What started out in a Portland, Oregon neighborhood as a way to buy solar at a discount has now spread across the US - and into the workplace.
This latest trend in solar, which has employees across the country opting in to collectively purchasing solar for their homes, is creating an exciting opportunity for solar companies. Installers selected through group-by-in programs can tap into aggregated groups of interested buyers and, in the process, reduce their customer acquisition and marketing costs, speed sales cycles and pass the savings on to customers.
This increased volume and velocity hold great potential for expanding installations workforces and growing local economies.
The solar industry is just one of the many beneficiaries of these employee purchasing programs. For employees of companies offering the benefit, group buying makes going solar easier and cheaper. Most programs have focused purchasing solar PV systems; a few have incorporated solar hot water systems and energy efficiency retrofits.
Program organizers - companies offering the benefit, or third-party administrators - set up the program and do most of the homework for participants. That includes soliciting installers through a rigorous RFP process, negotiating the group discount and either selecting the installer or advising an evaluation committee.
The programs remove both the cost and logistical barriers for participants. All they have to do is sign up, schedule a site visit and go solar.
There's something in it for companies offering these programs, too. Collective solar-purchasing programs help organizations to not only support their employees, but also meet their social responsibility and sustainability goals.
The Solarize Concept
This group-buy concept for residential solar is called "Solarize." Supported by the US Department of Energy, Solarize helps groups of individuals band together to realize volume discounts from a program-selected solar installation contractor.
Starting as a grassroots movement in 2009, Solarize Portland campaigns revolutionized the market for PV, driving down prices by more than 30% and generating more than 50 permanent, local solar jobs. During the past three years, six Solarize Portland campaigns have resulted in a total installed capacity of 1.7 megawatts on 560 homes.
The Portland program attained such success that cities in Arizona, Colorado, Washington, Massachusetts, Vermont, California and other states have established their own programs to buy solar energy in bulk and share the savings among participants.
Residential group-buy programs for PV have led to homeowner savings on the order of 10-30%, thanks to both the competitive nature of the RFP selection process and the marketing and outreach savings accrued by the selected contractor. It's no wonder then, that Solarize has moved beyond neighborhoods and into workplaces.
Here are a few examples, all implemented in 2012 and generally running for six months.
Solar Benefits Colorado
Spearheaded by the city of Denver through its membership in ICLEI - Local Governments for Sustainability USA - this program offered hassle-free solar at an impressive $3.90 per watt (a 15-20% discount from current market rates) to all Colorado local, state and federal employees, as well as employees of select contractors including the National Renewable Energy Lab and CH2M Hill.
During a five month campaign that covered four major metro areas (Denver/ Boulder, Fort Collins, Colorado Springs and Grand Junction), nearly 1100 participants indicated interest in beginning the process of buying or leasing solar.
The program easily surpassed its 600 kilowatt (kW) goal, with 119 participants installing 661 kW of solar.
It's good to keep in mind that the rate at which the participants who sign up actually go on to install solar through Solarize programs still depends on some of the traditional factors affecting conversion rates. These include the suitability of individuals' properties for solar, financing options and access to rebates.
Solar Benefits Tucson
This employee group-purchase program was implemented by the city of Tucson, Pima County, ICLEI and their program administrator, GroupEnergy.
Program organizers recruited some of Arizona's largest employers to join: The University of Arizona, The University of Arizona Medical Center, Tucson Electric Power, Ventana Roche and the town of Oro Valley. All of these participants had sustainability or social responsibility goals in which they were trying to engage employees.
Solar Benefits Tucson provided that opportunity - and the program finished with more than 850 participants and nearly 100 contracts equaling 620 kW of residential solar.
Leadership Group SunShares
Together with program administrator GroupEnergy, the Silicon Valley Leadership Group's SunShares team is working with 360 member companies (including Adobe, Genentech and eBay) to offer employees a tool that makes clean energy solutions simple and affordable.
Through SunShares, 800 employees in the San Francisco Bay Area have explored whether solar is right for their homes and budgets, resulting in the installation of 330 kW of residential solar.