GoSolarMarin grows to 200 homes

North Bay Business Journal - Marin County - November 5, 2007 - A group of more than 200 Marin County homeowners has attracted the attention of Bay Area solar providers with its plan to purchase residential photovolt-aic systems in bulk.

The group, which is calling itself GoSolarMarin, said it has received bids from 10 companies, several of them based in the North Bay, to install solar-electric systems at homes throughout Marin County.

The job could be worth several million dollars, based on rates paid by contractors in similar deals in cities such as Portola Valley and Mountain View.

Last year, Portola Valley became the site of what could be the country’s first large group-buy of solar systems by residents. Homeowners there signed a contract with Foster City-based SolarCity, which paid to market the program and offered residents increasing discounts based on the number of neighbors they could convince to sign up. The initiative attracted 78 households.

SolarCity, which is one of the 10 bidders on the Marin project, has since developed a specialty in filling large solar system orders for organized community groups.

“We’ve finished 12 cities,” said Bruce Karney, who was recently hired by SolarCity to run its group residential sales program after he organized a 119-home group-buy, as a resident, in Mountain View.

Group purchases allow companies to offer discounts by reducing their labor and marketing expenses, which are normally much higher for residential systems – relative to a project’s size – than for commercial installations.

Typically, each residential project requires its own custom design, building permit application, visits from sales representatives and other expensive services. The 412-kilowatt system installed at Cline Cellars Vineyard in Carneros, by contrast, captures the volume of more than 100 typical residential systems in a single project.

Many solar installers depend on the volume generated by commercial projects to purchase equipment at competitive costs.

“The commercial pays for the container loads,” said Tim Peterson, a sales consultant for Novato-based SolarCraft Services, which installed the Cline Cellars system and is also bidding on the GoSolarMarin project.

Supporters of the group-purchase model are hoping that it will make residential systems more efficient to sell and install and thus help drive costs down. In its group installations, SolarCity typically charges 20 to 30 percent less than the current market rate, according to Mr. Karney.

However, some solar providers question the amount of savings that can be gained from a group installation, since each home still requires a custom design and individual site evaluation.

“There may not be a whole lot there except for being able to schedule a bunch” of site evaluations back to back, said Robert Gould, president and CEO of Greenlight Solar in Mill Valley.

Mr. Gould said his company is nevertheless interested in the GoSolarMarin proposal because it may represent the future of most residential solar system sales.

“For us it’s a lot better to be in the conversation and working through these issues now than having it be dictated to us further down the line,” he said.

Rebates going quickly

Another important factor affecting the cost of residential solar systems is the availability of rebates through the state’s $3.3 billion California Solar Initiative launched last year. Rebates are set to decrease gradually based on how quickly they are being used in different regions, and they are being gobbled up most quickly in Northern California.

When the program started, the maximum rebate for a $36,000, 4-kilowatt system would have been $10,000, but now the payout for the same project would be $8,800. That number will soon drop to $7,600 and will shrink to $2,000 by the end of the program, which was previously expected to last until 2017.

“The thing that has surprised people was that what was intended to be a nine- to 10-year bank of incentives will probably be used up in five to six years,” Mr. Karney said.

Retail installers are hoping that manufacturers, most of them located overseas, will make up for the lost discounts once rebates dry up.

“There will be ways that the industry collectively responds to that because we’re all in the same boat,” Mr. Gould said. “If a manufacturer can’t lower their prices, then their product won’t move.”

The organizer of the GoSolarMarin proposal, Lisa Max, said that her group expects to select a bidder this month. The group’s list of interested homeowners was at 234 people last week, with 63 planning to buy solar systems soon with or without the group, according to Ms. Max.

For more information, email gosolarmarin@yahoo.com