.Making Solar Power Affordable

A new San Francisco company lowers installation prices by pooling buyers together. Plus, a state agency votes to save small plug-in hybrid companies.

It’s no secret that the biggest barrier to widespread adoption of
solar power is price. Unless you live in Berkeley and are lucky enough
to take part in that city’s innovative municipal financing plan, you’ll
have to pay $20,000 or more, up front, to install a solar system on
your home, even with state and federal rebates. That’s far more money
than most people want to spend or can afford. However, a relatively new
San Francisco company, One Block Off the Grid, may have a solution that
could jumpstart the solar-power industry.

One Block Off the Grid, or 1BOG.org,
makes home solar installations more affordable by pooling buyers
together in the same geographic region to increase their purchasing
power, and thus lower prices. “The bigger the pool gets, the better
deal you get,” explained company co-founder Dave Llorens. He added that
you can buy a standard-sized solar power installation for your roof
from 1Bog for less than $13,000, after rebates, which is a cheap enough
price to allow you to recoup your money over the life of the solar
system. “It’s a slam-dunk for anybody with a monthly electric bill of
about $100,” he said.

And if $13,000 is still too much cash upfront, 1BOG’s financing
partner in California, SunRun, will allow you to install a solar system
for as little as $1,000. SunRun, which is also based in San Francisco,
offers a sort of lease-back deal, in which it buys the solar system at
1BOG’s discounted price, and then installs and maintains it for you in
exchange for a monthly payment. The amount of the payment depends on
how much money you pay upfront, how much energy you use, and the length
of the financing deal.

One Block Off the Grid groups buyers by region, such as the inner
Bay Area, including Oakland, San Francisco, and San Jose. The San
Francisco-based company also is conducting group buys in Sonoma County,
Los Angeles, San Diego, Denver, and New Orleans, and is launching
programs in Sacramento and Phoenix later this summer. It just finished
a group purchase in the Bay Area last week involving more than 100
solar buyers, and plans to launch another on August 1. Interested
consumers can sign up in advance on the company’s website, 1BOG.org.

Llorens said the price of solar installations is dropping rapidly
because of a worldwide surplus of solar panels. The surplus was caused
by a global drop in the number of solar installations due to the
economic crisis. “Right now, panels are about 40 percent cheaper than
they were six months ago,” Llorens said. As a result, he said, the next
group buy in the Bay Area will be significantly cheaper than what 1BOG
charged per kilowatt in the last go round. “I can’t tell you how much
it’s going to be,” he said. “But I can say it’s going to be
awesome.”

Participants in the program make no commitments by signing up in
advance, and pay no money until installation time. During the sign-up
period, 1BOG puts out a request for proposals from solar installers,
based on how many buyers it estimates it will have, and then chooses
the lowest responsible bidder. Llorens says the company plays no
favorites because it charges installers the same fee, regardless of how
low the winning bid is. He said the company also puts a premium on
choosing experienced installers who have a track record of handling
large projects.

Once the sign-up period is over, 1BOG sends the installer to your
home to determine the size of the system you need and quote you a
price. You’re not committed to pay anything until you sign a deal with
the installer. From then, it takes four to twelve weeks to complete the
installation, depending on how busy the installer is. Llorens said it
tends to take longer in summer months.

One drawback of the company’s business plan is that it puts small
solar companies at a disadvantage. Llorens acknowledged that they tend
to work with larger solar companies that can handle big jobs. He
explained that 1BOG is about promoting widespread use of solar energy,
and that the best way to make systems affordable for large numbers of
people is to pool them together and reach economies of scale.

Saving the Plug-In Hybrid, Part II

The California Air Resources Board voted late last month to grant
the nascent plug-in-hybrid-car industry a reprieve. The board voted 6-2
on May 29 to allow small companies, such as 3 Prong Power of Berkeley,
to convert up to fifty Toyota Priuses into plug-in hybrids before
having to undergo expensive emissions testing. The board’s staff had
recommended that small companies could only convert ten cars to
plug-ins before having to pay for the tests, which can cost up to
$200,000. But the board rejected that proposal after business owners
said it would bankrupt them, because it wouldn’t give them enough time
to raise money for the tests. “Overall, we were impressed that we
actually made a difference and people saw our side,” said Paul Guzyk,
co-founder of 3 Prong Power. “It could have been a lot worse, and
probably couldn’t have gone much better.”

Guzyk and his business partner Daniel Sherwood had proposed that the
air resources board allow them to sell up to 100 conversion kits before
paying for the tests, but the board deadlocked on that proposal 4-4.
Air board staff was concerned that converted Priuses could cause more
air pollution and urged for stricter standards, even though all sides
agreed that plug-in hybrids lower greenhouse gas emissions. Plug-ins
can get in excess of 100 miles per gallon because they can run on
battery-powered electricity for around-town driving. Small conversion
companies contended that they had found simple solutions that would not
increase air pollutants.

Guzyk also credited the Express for its coverage of the
plug-in hybrid issue, saying the paper’s stories stimulated a “whole
movement” to keep the air board from killing the plug-in-hybrid
industry, just as it had done with electric cars earlier this decade.
After an Express cover story earlier this year (see “Who’s
Killing the Plug-in Hybrid,” 1/14/09), the air board rejected a staff
proposal that would have forced small conversion companies to begin
paying for the expensive tests right away.

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