This space is dedicated to bringing about home solar panel installation through a variety of different business models. Specifically, I’ll be looking at two different approaches: the startup model and the existing business model.
Startup Model
The idea of this model is to create a company from scratch that is dedicated to getting solar panels to consumers. There are already a few similar companies around right now, such as Sungevity, REC Solar or Real Goods Solar. These companies all install panels, and each has a variety of financing options, ranging from full-out purchase by customers to leasing solar panels from the company for a designated period of time.
Each company has the same sort of diagram depicting how customers save energy with solar panels, such as this one (PPA Payment is simply the loan payment that customers make each month to pay back the cost of the panels and their installation):
Solar Savings Chart
As you can see, this type of model is dependent on customers still using some of the electric bill while paying back their loan. This model works as long as those two costs have a net total less than the previous electric bill.
How I Would Do It
If I was to create a startup company, the focus would be on creating a system for the consumer that results in consistent net-positive power generation. This means that my company would not only install the solar panels, but would perform a complete home energy assessment. So much energy is lost through electrical appliances plugged in 24/7, leaks around doors and windows, and poor insulation. My company would make those fixes to the home, automatically decreasing the energy the home uses. (This would be especially apparent where air conditioning is concerned: less cold air would escape the home, and therefore the air conditioner would run less and use less electricity.)
In addition, my company would recommend spending slightly more money upfornt in order to get a large solar panel system and guarantee that in the future homeowners will generate consistently more power than they use. This extra energy will be sold back to the power companies and help to pay back the loan for the initial solar installation.
So, to summarize: Energy efficiency of the entire home will first be improved. This allows for a net smaller (and thus net cheaper) solar panel system for the home. Due to the increased efficiency of the home, income from selling back power to the energy companies will offset the loan cost. These concepts are visualized below:
While this particular model doesn’t have numbers associated with it, the concept is still sound, as illustrated by the model above. With increased home efficiency and the correct amount of solar panels that generate more electricity than the home uses, it is clear that this model is profitable. In five or ten years, as the efficiency of solar panels improve and their costs go down, it is foreseeable that the extra energy sold back to the electricity company could completely cover the cost of the solar panels.
Existing Business Model
The model for existing businesses is the same as the startup model. In order to implement this model, however, existing businesses must merge or buy each other out to form one central company.
Imagine an existing solar panel company (as listed above) buys out a home energy audit company. Or a bank buys both a solar panel installation company and an energy audit company. Any of these combinations would create a company that could implement the business plan listed above.
A huge benefit to working with existing companies is that the framework is already in place, and the new business model can be implemented very quickly. The drawback, however is convincing each company to buy into the new model – with a startup, the company founder is in control and doesn’t have to listen to anyone but themselves.
Save with Solar 