Tuesday, March 27, 2007

Practical Solar Electric Power for Your Home, II

I mentioned yesterday that I came across a company that claims to offer you solar electric power with . . .
  • No upfront costs. (Actually, they do require a $500 security deposit 1 --returned with interest when your contract expires.)
  • No maintenance costs ('cause they take care of the entire system for you).
  • Up to a twenty-five year fixed-price guarantee at your current (non-solar) price.
The name of the company: Citizenrē.

And how and why does Citizenrē think it can afford to offer such a "deal"?

Their business model relies on what are called "net metering laws."

If you live in any of the 40 states where utilities offer this, you may have heard of it. The idea is that electric companies credit their customers' bills for any "excess power" they may generate from wind, PV (photovoltaic), or other electric generation systems they may own.

So Citizenrē provides you with a PV system that produces more power than you can use during the day, when energy requirements are at their peak. The extra electricity flows into the power grid and your meter spins in reverse. At night, you pull power back from the grid. The Citizenrē Solution is designed so that, over the course of a year, the electricity you send to the grid is very nearly equal to what you pull back from the grid--thus your cost to the utility drops close to zero, and you pay Citizenrē the "same price" for the energy you acquire from Citizenrē's system as you would have paid the utility.

A few key points:
  • Notice that you are still connected to the grid. Citizenrē is expecting you to utilize grid power at night.
That has a further implication:
  • While your ultimate cost for power from your local utility should drop close to zero, you will still have to pay whatever the utility's at-that-time current connect fee is.
  • Customers are charged by how much energy their system produces, not by how much they use.
         If you decide to accept bills for actual power produced, this could mean you wind up paying for "excess" power during some months. Example: say you go away on vacation in the middle of the summer. Your PV system will produce plenty of electricity, but you won't be using much of it.
         You still have to pay for the power your system produces--just like you pay your cable bill and mortgage when you're absent. However, you can use this "excess" energy that was flowed to the grid later. Your energy production and energy use should balance out by the end of the year. Your system will be designed to meet no more than 100% of your historical annual usage.
         To make the situation even easier, Citizenrē offers an "Even-Pay" plan so you can get an even payment all year long. The final month, they figure, may vary somewhat, but not by much.
  • What happens if you sign up for a certain usage plan, but then your energy needs shift dramatically: say, you have more kids, or your kids get older and run more electrical gadgets, or your kids go off to college and your energy needs drop significantly?
         Citizenrē monitors the energy usage daily. If a significant drop is registered, the local franchisee will remove one or more of the panels and adjust the contract. Same thing in the other direction.
  • And one more scenario to give you a full sense of what they are talking about:

    What happens to the contract if a customer sells their house?

    There are three options:

    (1) The Customer has the right to transfer the system to the new home — as long as it is within our service territory — at no cost to the Customer (one time only). Any additional moves during the contract period, the Customer will be billed a recovery and relocation fee.

    (2) The Customer has the option to transfer the contract to the new homeowner, so long as the new homeowner is willing to accept the terms and conditions of the agreement. The contract will often have a value because it is locked in at the rate of when the contract began. For example, if the seller started the contract 10 years ago when energy costs were 20% lower, the buyer could enjoy those savings if they take over the contract. This could potentially add to the value of the house, similar to someone transferring a low rate mortgage during the sale.

    (3) If neither of the first two options is available, then the Customer will forfeit their Security Deposit — which is the recovery cost to us. In addition to the recovery fees, we may charge additional fees if the Customer is uncooperative with us and does not allow us to recover the system in a timely manner. These additional fees may include collection fees, overdue service fees, early cancellation fees, late fees, and other fees that are described in the General Terms and Conditions of the Forward Rental Agreement. (Just like if you cancelled your cable and would not give them back the box and refused to pay your bill).

    Our service is: producing clean power with

         1. No upfront cost.

         2. Same rate--with a 25-year fixed price guarantee.

         3. No worries.

Citizenrē is in the midst of building what they claim will be "the largest manufacturing plant for clean energy in the world." The plant is due to come on-line late in 2007 or early 2008. This facility--that, they claim, will cut production costs in half--is a key component of their strategy.

The fact that the facility isn't ready yet means that, at this time, the company is selling a concept more than a real product. But I emphasize the words "at this time." They claim to have well over half a billion dollars in funding and are set to launch.

In the meantime, they are trying to get potential customers to sign up to register interest in the concept by means of what they are calling a "Forward Rental Agreement" ("FRA").

What does that mean?

If you sign an FRA, the will call you to schedule an initial site review by one of its engineers. At this site review, the engineer will talk with you about the engineering, procurement and construction process. He or she will also talk about the operating and maintenance of the system once it is installed. And then the engineer will answer any questions you may have about the system, or the Company, or solar power and electricity in general. But the most important subject will be your power consumption habits.

The engineer will determine what your historical energy consumption has been, how you use electricity, and actually suggest ways you might be able to decrease your power consumption.

At the same time, the engineer will review your site. The most important actions in the site review are site measurements, establishment of orientation, and identification of roofing materials and shading factors. From this and the historical energy consumption, the engineer can design the system right there, on the spot.

S/he will present you with an AutoCAD design for your approval. You will have the ability to discuss alternatives with the engineer if the design is not to your liking. The engineer will work with you to find a solution. HOWEVER, you need to know that they will not install a system of less than 2kW peak capacity.

The site review process should take no more than two (2) hours. At the end, you will have to either approve of or decline the plan. Upon approval, you will be required to make the security deposit. At that point, Citizenrē will begin to procure the necessary components, permits, and approvals for construction of the system.

Sounds so neat. But . . .

What if????

What if . . . anything?

What if . . . I decide at the last moment that I just don't like the system? Say I sign the FRA and then, next March or July or whenever, I see the design and I just hate it? Then what?

According to Citizenrē, you can back out at any time for any reason prior to installation. Even if you decide to move forward, it is still possible that:

(a) The utility company might refuse to approve an interconnection agreement.

(b) The local buildings and codes department might refuse to issue a permit.

(c) The mortgage lender might refuse to sign a letter of acknowledgment.

Citizenrē claims (b) is unlikely to occur, but (a) and (c) may occur. Personally: I think I might wind up with (b) problems: our local community association is picky-picky.

But, whatever. I'll go with Citizenrē's promise that I can back out at any time.

Moreover, as they state time and time again: your maximum exposure at any time--unless you deliberately sabotage the equipment--is the $500 security deposit.
Normally if you install a solar system and something better is developed, you are out of luck. You just invested $40,000.

With Citizenrē, if there is a new technology, or if [the] customer moves to Guatemala, or they want to cancel the contract for ANY reason that you can imagine . . . their total risk is the Security Deposit (provided that they cooperate with us when we remove the system, the system is not damaged, and they pay their bill).
Citizenrē anticipates that its manufacturing plant will begin producing panels at the commercial scale by the end of 2007 or early 2008.
Upon meeting such a milestone, the Company will begin installing systems on residential customer homes. It is with good probability that those Customers choosing to sign an FRA early on will in fact be some of the first Customers to receive a system on their home. Furthermore, the early signing of an FRA allows the Customer to lock their contracts with the best electrical rates for up to 25 years. We plan to have a tool where a customer will get an estimated installation date based on their order of sign-up.
So. According to the company, the benefits of signing an FRA include:You lock in the current energy rate. "Even if the rates are higher when their system is actually installed, the customer will enjoy the lower rate of when they signed up. If, by some miracle, the rates actually go down before their installation, the customer can choose the lower rate."

They get their installation sooner. "If a customer waits till the plant is completed, there will be tens and possibly hundreds of thousands of customers who will get their system before them. Also, there is no disadvantage. If the customer decides before the installation that they do not want the system, then they simply cancel. No penalty."

With all those reassurances, I've signed up for service.

If you're interested, you can go to Citizenrē's website.

They have all kinds of information there. Dig as deeply as you want.

I should note: Citizenrē offers an affiliate program that they call the "Powûr Network of Ecopreneurs." As they explain, they can imagine, five years down the road, they could have 500,000 homes using their solar solution. And then the power companies might send their lobbyists to Congress: "Hey, we can't compete with the sun. This isn't fair. They are taking too many customers from us. This save the planet stuff was great . . . but we didn't think anyone was going to really do it!"

Citizenrē then hopes the Powûr Network will be motivated to "lobby to keep Congress and Big Business honest. Imagine the power of 10,000 highly trained, business savvy environmentalists who know how to network!"

I hardly need another job, but. I did sign up to be an affiliate. All of my linked references to Citizenrē, above, use my affiliate ID. If you want to sign up on your own, I am happy. Feel free to do so. The un-"affiliated" [!!!] link is here.

1 "$500.00 for all REnU systems with capacities of 5 KWp DC or less. For systems larger than 5 KWp DC it is $500 plus 10 cents per Wp DC for every Wp DC greater than 5 KWp DC." Return to text.
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