Oakland’s Bid to Become a Solar-Power Hub

The rise of solar-power companies and other solar innovators has created a future-oriented economic sector for the city.

Danny Kennedy, co-founder of Sungevity, holds a copy of his book Rooftop Revolution: How Solar Power Can Save Our Economy--and Planet--From Dirty Energy. 
National Journal
Oct. 7, 2013, 7:21 p.m.

This art­icle is part of a weeklong Amer­ica 360 series on Oak­land.

OAK­LAND—There are no white lab coats at sol­ar-ser­vice pro­vider Sun­gev­ity’s Oak­land headquar­ters. There are no hard hats, or equip­ment used for cal­ib­rat­ing sol­ar cells. In­stead there are cu­bicles — some dec­or­ated with totally un­ne­ces­sary leaf-shaped um­brel­las — from which some 300 em­ploy­ees ma­nip­u­late soft­ware and charm cus­tom­ers over the phone. Thirty miles north of the shuttered of­fices of sol­ar-pan­el man­u­fac­turer Solyn­dra—which went bank­rupt in 2011 after re­ceiv­ing $535 mil­lion in fed­er­al loan guar­an­tees—Sun­gev­ity’s busi­ness has doubled its sales every year for the past three years.

“We all feel like we’ve been rid­ing a rock­et ship for the past five years, and we’re about to go faster,” says Sun­gev­ity cofounder Danny Kennedy. Kennedy’s Aus­trali­an ac­cent makes him sound laid back, even when he’s rat­tling off stat­ist­ics about the sol­ar sec­tor’s rap­id growth. The price of sol­ar hard­ware is drop­ping “like crazy, pre­cip­it­ously, like noth­ing on Earth,” Kennedy says. The price of a sol­ar pan­el—the key com­pon­ent in a home sol­ar ar­ray—is one-fifth what it was when Sun­gev­ity got star­ted in 2007, ac­cord­ing to Kennedy.

Bay Area en­tre­pren­eurs are fond of call­ing their busi­ness ideas “dis­rupt­ive.” But help­ing to spread dis­trib­uted elec­tri­city gen­er­a­tion ac­tu­ally is. If cur­rent trends con­tin­ue, sol­ar ser­vice pro­viders like Sun­gev­ity and Sol­ar­City could trans­form the util­ity busi­ness in the same way that cell-phone pro­viders trans­formed the land­line tele­phone in­dustry.

Over the past dec­ade, the price of sol­ar hard­ware has plummeted, while con­ven­tion­al res­id­en­tial elec­tri­city has be­come more ex­pens­ive. A re­cent Deutsche Bank re­port found that res­id­en­tial sol­ar is already com­pet­it­ive with con­ven­tion­al elec­tri­city in 10 U.S. states — without ad­di­tion­al state sub­sidies — and pro­jec­ted that 12 ad­di­tion­al states will achieve par­ity in the next 18 months. Pro­jec­tions aren’t guar­an­tees, but Sun­gev­ity is bet­ting that pretty much every­one who puts a sol­ar pan­el on their house will even­tu­ally save money.

The fall­ing price of sol­ar hard­ware helped put Solyn­dra out of busi­ness. But the drop has been great for ser­vice busi­nesses like Sun­gev­ity, which make it cheap­er and easi­er for homeown­ers to get a sol­ar sys­tem. Ac­cord­ing to the Sol­ar En­ergy In­dus­tries As­so­ci­ation, a trade group, the U.S. is in­stalling roughly one sol­ar photo­vol­ta­ic sys­tem every four minutes. The Sol­ar Found­a­tion, a non­profit, cal­cu­lates that the sol­ar in­dustry ad­ded more than 13,000 jobs in 2012, mostly in sales, fin­ance, main­ten­ance, and in­stall­a­tion.

Al­though sol­ar ac­counts for just 1 per­cent of the net elec­tri­city gen­er­ated in the U.S., both res­id­en­tial and util­ity-scale pro­jects are ex­per­i­en­cing rap­id growth. “This busi­ness will not go away. It’s here for the long term, and it will dra­mat­ic­ally change, over time, the en­tire land­scape here in terms of the elec­tric-util­ity busi­ness,” says Cali­for­nia Pub­lic Util­it­ies Com­mis­sion Pres­id­ent Mark Peevey. In 2017, the 30 per­cent fed­er­al tax cred­it for rooftop sol­ar sys­tems will drop to 10 per­cent, but by that point it will be enough to keep sol­ar com­pet­it­ive, he says. 

Util­it­ies in Cali­for­nia are already com­plain­ing that rooftop sol­ar users aren’t pay­ing their fair share of grid main­ten­ance costs. They’ll have much more to com­plain about in years to come, should bat­tery-stor­age tech­no­logy al­low rooftop sol­ar users to totally dis­con­nect from the grid.

Cofounders Kennedy, An­drew Birch (known to all as “Birchy”), and Alec Guettel set up the first Sun­gev­ity of­fice in a friend’s back­yard shed. The three — a former Green­peace act­iv­ist, a fin­an­ci­er, and a so­cial en­tre­pren­eur, re­spect­ively — be­lieved sol­ar had a fu­ture as a non­pol­lut­ing al­tern­at­ive to fossil fuels, but they also knew that most homeown­ers wer­en’t will­ing to pay $30,000 up-front for a sol­ar sys­tem.

So they star­ted leas­ing pan­els as well as selling them. Homeown­ers pay no de­pos­it for pan­els they lease through Sun­gev­ity. A Cali­for­nia cus­tom­er with a pri­or monthly elec­tri­city bill of, say, $150 will pay Sun­gev­ity $70 a month for the pan­el, and will pay the util­ity com­pany a much lower bill—per­haps $50, as the sol­ar pan­el will have cut the amount of power the home needs to pull from the grid, Kennedy says. Thirty dol­lars in monthly sav­ings might seem small, but over a 20-year lease peri­od, the cus­tom­er could save over $10,000. To date, Sun­gev­ity has leased or sold more than 10,000 sol­ar ar­rays. 

A soft­ware-driv­en busi­ness mod­el al­lowed the com­pany to grow rap­idly. Sun­gev­ity em­ploy­ees reach homeown­ers in nine U.S. states, Europe, and Aus­tralia without leav­ing their leaf-shaded cubes. Rather than trav­el­ing la­bor­i­ously to and from homes to design rooftop sys­tems and give cus­tom­ers a quote, Sun­gev­ity’s sol­ar de­sign­ers use satel­lite data from Google Maps, Bing, and else­where to cal­cu­late how much elec­tri­city a sol­ar sys­tem of a cer­tain design, on a cer­tain cus­tom­er’s home, would gen­er­ate over the length of the lease. Rather than send­ing in a con­sult­ant to talk cus­tom­ers through their op­tions, Sun­gev­ity’s em­ploy­ees talk to cus­tom­ers on the phone and provide them with a Web-based es­tim­ate of dol­lar and car­bon sav­ings. And rather than hand­ing over a set of sol­ar pan­els and leav­ing homeown­ers to deal with loc­al per­mit­ting and main­ten­ance, Sun­gev­ity’s pro­ject man­agers help cus­tom­ers through the per­mit­ting pro­cess and co­ordin­ate in­stall­a­tion and main­ten­ance per­formed by some 100 loc­al con­tract­ors.

To spread the word about sol­ar, Sun­gev­ity has partnered with home-im­prove­ment re­tail­er Lowe’s and used so­cial net­works. Cus­tom­ers can share their Sun­gev­ity en­ergy-sav­ings data to Face­book, get a re­fer­ral bo­nus when they per­suade a friend to lease a pan­el, and track the en­ergy and car­bon sav­ings caused by their re­fer­rals. Get­ting a pan­el turns a lot of cus­tom­ers in­to ad­voc­ates. “They come in ra­tion­ally, they go out emo­tion­ally,” Kennedy says.

Sun­gev­ity’s busi­ness mod­el can only work in the 41 U.S. states that al­low net meter­ing—the sale of ex­cess elec­tri­city gen­er­ated by res­id­en­tial sol­ar sys­tems back to the elec­tric grid. Util­ity com­pan­ies can hobble the growth of rooftop sol­ar by get­ting state le­gis­lat­ors to lim­it net meter­ing. Re­cently, a push to do just that failed in Sac­ra­mento.

But the po­ten­tial mar­ket is enorm­ous. Sun­gev­ity is hop­ing to de­vel­op a whole eco­nom­ic sec­tor around sol­ar power. To help grow the next gen­er­a­tion of sol­ar en­tre­pren­eurs, Sun­gev­ity hosts an on-site in­cub­at­or and ac­cel­er­at­or pro­gram. One start-up that leases of­fice space in Sun­gev­ity’s Sfun Cube, Mo­sa­ic, al­lows in­di­vidu­als to in­vest in rooftop sol­ar pro­jects at schools, farms, and U.S. mil­it­ary bases. It’s a little like crowd­fund­ing, ex­cept in­vestors get an an­nu­al re­turn of 4.5 per­cent or more.

Over time, Kennedy hopes, suc­cess­ful Sfun­sters and oth­er sol­ar-ser­vice busi­nesses will set up per­man­ent of­fices near Sun­gev­ity in Oak­land’s Jack Lon­don Square, cre­at­ing a glob­al cam­pus for the sol­ar eco­nomy. Oak­land feels like a nat­ur­al home base, he says — and not just be­cause of the near year-round sun­shine. For a com­pany push­ing for a clean elec­tri­city re­volu­tion, there’s prob­ably no bet­ter place to be than in act­iv­ist Oak­land.

COR­REC­TION: An earli­er ver­sion of this story mis­spelled the name of sol­ar-ser­vice pro­vider Sun­gev­ity.

What We're Following See More »
SHE IS AMBASSADOR TO CANADA AND A GOP DONOR
Kelly Craft Nominated for UN Post
1 hours ago
THE LATEST
CRITICS CALL RULE "AN INDIRECT WAY TO DEFUND PLANNED PARENTHOOD"
Trump Blocks Federal Funding to Groups that Make Abortion Referrals
5 hours ago
THE DETAILS

"The Trump administration took aim at Planned Parenthood Friday, issuing a rule barring groups that provide abortions or abortion referrals from participating in the $286 million federal family planning program — a move that is expected to direct millions toward faith-based providers."

Source:
SENATE MUST THEN VOTE ON MEASURE WITHIN 18 DAYS
House Expects Tuesday Vote to End National Emergency
8 hours ago
THE DETAILS

"The House plans to vote Tuesday on legislation to formally block President Donald Trump’s attempt to circumvent Congress to fund his border wall, Speaker Nancy Pelosi announced Friday. The privileged resolution to stop Trump’s emergency declaration — which has 226 co-sponsors, including one Republican — is expected to easily pass the House. It then will be voted in the Senate within 18 days."

Source:
AVOIDS SHUTDOWN WITH A FEW HOURS TO SPARE
Trump Signs Border Deal
1 weeks ago
THE LATEST

"President Trump signed a sweeping spending bill Friday afternoon, averting another partial government shutdown. The action came after Trump had declared a national emergency in a move designed to circumvent Congress and build additional barriers at the southern border, where he said the United States faces 'an invasion of our country.'"

Source:
REDIRECTS $8 BILLION
Trump Declares National Emergency
1 weeks ago
THE DETAILS

"President Donald Trump on Friday declared a state of emergency on the southern border and immediately direct $8 billion to construct or repair as many as 234 miles of a border barrier. The move — which is sure to invite vigorous legal challenges from activists and government officials — comes after Trump failed to get the $5.7 billion he was seeking from lawmakers. Instead, Trump agreed to sign a deal that included just $1.375 for border security."

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login