February 21, 2007 1:51 PM PST

Breaking the mold in solar power

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That model calls for Citizenre to make a significant break from today's solar supply chain. The company plans to do its own manufacturing and to offer installation services for its panels through a network of independent affiliates.

Citizenre intends to purchase the equipment to build panels from existing manufacturers such as SpireSolar, Gregg said. It will buy its own silicon, which is used in the solar cells that convert light to electricity. And it will manufacture its own inverters, which are the boxes that convert the direct current electricity generated by the solar panels to the alternating current used in a home.

"The industry has always known it is possible to manufacture on a large scale to drive down costs."
--David Gregg, CEO, Citizenre

By "vertically integrating" these different steps--manufacturing, assembly and installation--the company will be able to wring an economic advantage out of today's fragmented market, Gregg said.

He noted that the solar industry is already seeing signs of this sort of combination. SunPower, a manufacturer of solar cells and panels, last year bought PowerLight, an installation company, with the goal of speeding up its delivery of systems.

"The industry has always known it is possible to manufacture on a large scale to drive down costs," Gregg said. There are other ways of squeezing costs, he added: "We can eliminate the investment hurdle using our debt financing structures."

Gregg said that within nine months of breaking ground on a manufacturing plant, it will have turned out enough solar panels to generate 100 megawatts of power. Within two years, it will have produced 500 megawatts of capacity.

By comparison, there were about 100 or 150 megawatts of capacity installed in all of the United States last year, said Alex Klein, a senior analyst at Emerging Energy Research.

To keep the cost of sales down, Citizenre has devised a multilevel marketing approach in which independent salespeople, called "ecopreneurs," get a cut of the money generated by other salespeople. That, in theory, will enable the company to sign up a large number of customers quickly. It also intends to set up franchises that will help train sales staff.

Not buying it
Citizenre, whose management has a mix of experience in renewable energy and the IT industry, has made ambitious claims since launching a pilot program five months ago. Perhaps because of that, the company is getting grilled by many people who have been steeped in the solar industry for decades.

Jeffrey Wolfe, CEO of solar photovoltaic installer and distributor GroSolar, said he examined the company's business plans and concluded that the numbers do not add up. In a piece on the Renewable Energy Access Web industry site, he said that Citizenre's promises ultimately will disappoint consumers in a situation which "represents a threat to the entire solar industry."

Richard George, a solar industry professional who signed up as a salesperson for Citizenre, has also been a vocal critic. George stepped down, as he felt that the company's top executives were not addressing a long list of "red flags" (described in this PDF).

Gregg said that some skepticism is warranted because people have yet to see and hear the full picture of the company's plan, something it intends to divulge over time.

However, he believes Citizenre is also catching flak because its business model is a challenge to solar power industry incumbents.

"The harshest critics making accusations are the distributors, who are the most at risk of us taking their jobs away," Gregg said. "Unless you study the industry from the bottom up, you won't know where the cost savings are."

Gregg and Morgan acknowledge that the company has gotten ahead of itself in some respects. Specifically, it has signed on many salespeople without having the resources to fully train them. That's a situation the company intends to address in the coming weeks, Gregg said.

Also, they caution that customers may have to wait years between signing their forward rental agreement and having the panels installed.

All in all, Citizenre--which Morgan describes as still being "in extreme start-up mode," has drawn both ire and admiration.

Some solar installers say its rental plan addresses one of the biggest problems facing the widescale adoption of renewable power, a long-pursued but unrealized goal.

Yet the company's stated ambitions to break the rules of the existing solar industry have alienated many of those who built that industry up. Much of the criticism is due to the large scope of its planned operation and the lack of detailed information on its setup.

"If you're going to make claims like that, the details need to be available if you want the support of the industry," Bradford said.

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16 comments

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New Solar Model...!
Sign Me Up...!

Looks like Everybody Wins with this.

fmv // Placitas, NM
Posted by fmvigneri (2 comments )
Reply Link Flag
c"oming to a roof near you"
Please join me in a discussion about this company CitizenRe. I have been an associate for months now and have communicated with all of the pricipals involved with this company. I feel that they have a great buisiness plan and soon everyone willl see their financial backers and will be registering their homes for solar. Please visit this site for more info or cal me at 630-553-8697
www.jointhesolution.com/yorkville
www.powur.com/yorkville
Posted by yorkvillesolar (9 comments )
Link Flag
Hmmmm...
Selling solar before a factory to manufacture products has been built? Hmmmm.... Hopefully this is not a phishing expedition to attract venture capital money. Hopefully the marketing team has a clean background, with no prior history of shady deals.
Posted by bloated2 (2 comments )
Reply Link Flag
Better Business Model
Why can't someone just set up solar panel manufacturing in China and sell it at Walmart?
Posted by eabu (15 comments )
Reply Link Flag
Nothing new about this technology, or ancient either.
In the late 70s & early 80s, there were many plans in the "Green' magazines & books on how to build a passive solar systems for both hot water & heating use which are much cheaper than $10,000. Unfortunately, none of the major media picked up on it. Evidently they were afraid of losing ad revenue from the power & oil industries (& they were correct in that assumption). Some community colleges even offered low cost classes on energy efficient systems like the excellent 6 week course I took. There were also companies that sold pre-fab ones. Some of those designs eliminated the need for commercial traditional furnaces & water heaters. A few were even capable of meeting at least part of air conditioning needs, though they were more expensive because they required undergroud tanks.

At least some libraries will still have copies of those publication for those who wish to investigate further. "The Mother Earth News", "The Whole Earth Catalog", & some of the Rodale publications magazines are a start. More can be found under the subject files.
Posted by Bob H in NPR (39 comments )
Reply Link Flag
HOPE and a PRAYER SOLAR SYSTEM
Interesting,

So with no confirmed financing, no investors and no factory, makes you wonder how they are taking reservations? For what, a hope and a prayer that they will ever have their act together?

Privacy-Rights-Army.com
Posted by Privacy-Rights-Army.com (12 comments )
Reply Link Flag
HOPE and a PRAYER FREE SOLAR SYSTEM
Interesting,

So with no confirmed financing, no investors and no factory, makes you wonder how they are taking reservations? For what, a hope and a prayer that they will ever have their act together?

Privacy-Rights-Army.com
Posted by Privacy-Rights-Army.com (12 comments )
Reply Link Flag
Citizenre
Citizenre has ZIPPO. It has a great website, 700 poorly trained ecopreneurs and that is it. There is no manufacturing plant, and no details as to who is backing them to the tune of 650 million. There are so many holes in this company. Why does Citizenre do not want to disclose?
Posted by citizenre (1 comment )
Reply Link Flag
don't agree
I am an manager at CitizenRe and I am well trained to represent this company. All of the associates have passed an exam that is being re-done as we speak to be even more difficult. For some reason, there is a lot of fear about change in the solar industry. I have two masters degrees related to engineering and many of the other associates have similiar backgrounds. Please join me in a discussion about this company CitizenRe. I have been an associate for months now and have communicated with all of the pricipals involved with this company. I feel that they have a great buisiness plan and soon everyone willl see their financial backers and will be registering their homes for solar. Please visit this site for more info or cal me at 630-553-8697
www.jointhesolution.com/yorkville
www.powur.com/yorkville
Posted by yorkvillesolar (9 comments )
Link Flag
if you ever wanted solar on your roof
I have investigated all he pricipals of this company and I personally believe they are sincere in waht they want to accomplish.Please join me in a discussion about this company CitizenRe. I have been an associate for months now and have communicated with all of the pricipals involved with this company. I feel that they have a great buisiness plan and soon everyone willl see their financial backers and will be registering their homes for solar. Please visit this site for more info or cal me at 630-553-8697
www.jointhesolution.com/yorkville
www.powur.com/yorkville
Posted by yorkvillesolar (9 comments )
Reply Link Flag
Why Can't We Believe?
If this company is willing to help the person who can't afford solar power why not? If people can afford to put the solar power energy in their house do it now... It will help our planet... If you can't sign up for the solar power from this company.... No investment in the system.... Why can't we embrace the idea and get behind a company that has a vision.... It's not about the money it's about the connection of everyone who plans on living on this planet.....

April Moore Central Oregon
1-541-340-9504
Why do we defend something that is different? Why do we not see the value when you don't have an investment? Why not make a choice to be a part of the solution............
Posted by alleybratz (1 comment )
Reply Link Flag
I would still like to hear why we can;t or havn/t imported the solar panels from china and sell kits.
Posted by aquasundean (1 comment )
Reply Link Flag
No way, stop buying from China!

We need to put American back to work manufacturing products, and Solar Panels are just one example.

With our economy in the can, and price adjustments are in play, America should be adjusting pricing on the many costs of doing business so we can bring jobs back to our shores. Why import technology when we have the technology. I believe it all comes down to greed. Charge less and sell more, get on the band wagon.

RLP
Posted by rlwparker (2 comments )
Link Flag
Citizens....... This concept is what I have been looking for from the big power giants supplying our power now. Of course I'm looking for a few differences. For the example lets say the company is Southern California Edison. They enter into an agreement with track home owners, which for a small installation fee of $500, a locked monthly fee of $50, and all right being given to the power company for all electricity generated above and beyond what each household uses. There also has to be no usage limits. This allows the companies to stay in control, which is what they desperately want. It also feeds the power grid with a clean power generation model. Go Green.

Go Green... leave greed behind. Power companies should be serving the citizens needs. A break even is what plus 10% is what the government should mandate.

RLP
Posted by rlwparker (2 comments )
Reply Link Flag
Citizenre is real and a wonderful example of a renewable energy movement that understands the economic issues that have kept our country from moving into the renewable energy age.
Renting vs Purchasing...Who cares? Clean Energy is the mission and a solar lease program is designed to make the solar conversion to clean energy a simple and affordable way for the masses to participate in a solution to help minimize the environmental destruction, and dependence on fossil fuel driven power plants. In this economy most homeowners are just trying to get by, they want to do something to change our carbon footprint, but the investment of $25,000 and even after all the rebates and write offs they may only pay about $11,000 for the system. Then factor in the maintance and any repair cost of a system, and the purchase option to a new solar customer may seem a bit of a stretch. A new solar customer should have the option to test drive the technology before investing and a solar lease offers just that. Technology changes so fast these days, many of the systems being purchased today may be obsolete in 10 years, remember all of those giant cable satellite dishes, or the block sized cell phones, and I can go on and on, the point is sometimes it is better to find a way to enjoy the technology during its ?evolution stage without having to invest the farm. The main mission is to bring the clean energy of solar to the masses with a program that will work for them now, not wait until they can afford to purchase and who cares if a homeowner buys or leases? What we desire is a clean environment, and the reduction the BP oils spills and the coal mining accidents. Ohhh, by the way there is a solar lease program that you can lease with the option to buy in six years, they have two of the best leasing programs in the nation, you can get a free solar quote and compare before you decide. Read about it: http://www.2rentsolar.com

Either you are part of the problem, or part of the soultion, either buy or lease, but please, please convert ot clean energy.

Gregory
Posted by todayturnstomorrow (2 comments )
Reply Link Flag
 

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