Perhaps you’ve had this experience - you have an outfit that you really love. You loved it the day you picked it out, years ago, and it remains a favorite to this day. You wear it constantly - it is so comfortable and just putting it on reminds you of great times you’ve had wearing it. And what’s more, when you wear it, “You. Look. Mahvelous!“
But then a close friend pulls you aside and questions whether you should maybe reconsider your fashion choice. Shocked - and somewhat offended - you discount your friend’s concern. Until another friend, and then another, gives you the same, sad news - your outfit, however spif it once was, is long past its prime. It looks old and tired. Even a little frayed at the edges. Bottom line - it is making you look bad. Finally, painfully, you come to realize your friends are telling you the truth. Time for that old, beloved outfit to finds its way to the recycle bin - you need a new look!
Well, that is pretty much where things stand with our beloved (by us) website at RunOnSun.com. It has been nearly three years since we did our last major redesign and while we’ve continued to add features, the underlying look is tired and behind the times. Not exactly a good image for such a progressive company.
So, having heard our friends/critics concerns, we are pleased to announce that a major redesign is underway with a target go-live of Q1 next year!
In addition to incorporating a leaner, less cluttered appearance, we are also taking strides to address one of the major complaints of the existing site - it is too wordy. (Now there is a perfectly reasonable explanation for that - we are better with words than we are with art. So… easy to create textual, some would say verbose, content - hard to produce stunning visuals.
But we are trying to change!)
The new site will be far more visually oriented with greater interactivity. We are experimenting with some new technologies - most significantly D3 - that we hope will make the website as fun to explore as it is informative.
Trust us - this isn’t about dumbing down the site. Rather, it is about making all of our information more appealing and applicable to why folks come here in the first place.
If you have thoughts about what you would like to see (or NOT see) at the new site, please let us know in the comments.
We have expressed skepticism over the value of solar leases for residential clients in the past and, as a result, we have refused to offer them. Unfortunately, for some perspective clients, something was needed between a straight-up cash purchase and the siren song of the solar lease. Now we have an answer - the solar loan.*
Run on Sun is now able to offer qualified residential clients a $25,000 secured loan with the option to also include up to $15,000 more in an unsecured, 18-months same-as-cash plus loan. Together, these two loan options provide for as much as $40,000 for solar power systems - enough for 95% of all residential solar projects.
The first piece of the financing mechanism is the $25,000 step-down loan. Under this program, which is open to residential clients with FICO scores of 650 or more, the client has the option of re-amortizing the loan once within the first 24 months - after the rebate and tax credit payments have been received. This allows the client to take advantage of those incentives - as opposed to surrendering them to the leasing company - and use some or all of those proceeds to lower your monthly payments. In addition, there are no pre-payment penalties and the interest is most likely tax deductible - unlike lease payments (but please, check with your tax advisor).
The second piece is the $15,000 plus loan for systems larger than 5-6 kW. This loan requires a FICO score of 700 or more, and no payments are required until 18 months from the date of funding. The intent here is that for larger systems, no payment is made on this second loan piece until the rebate and tax incentive have been received, at which time they can be used to pay off this part of the loan. In this way, qualified homeowners can purchase larger systems without increasing their monthly payments.
So why is this better than a lease? For one thing, the loan terms are more flexible than many leases, allowing the homeowner to choose repayment periods from five to twenty years. (Of course, the shorter the term and the better your individual credit, the better the interest rate will be.) Another benefit is that your payments are fixed; there are no escalator clauses in this loan, thereby eliminating the fear that your payment could increase faster than utility rates, possibly destroying the value of your system - no such assurances with leased systems. And because you own the system, if you decide to sell your home there is no qualification issue to worry about with potential buyers.
But here’s the best part - you will save more money with a loan than you will with a lease! Don’t believe me? Take a look - let’s suppose you need a 5 kW system and you want to pay for it over twenty years (the same terms as most leases). Your credit is very good, but not outrageously good (say, somewhere between 725 and 759), and you are presently averaging $0.22/kWh to SCE. We will assume you are in a 30% tax bracket and we will estimate SCE’s rate increases, conservatively, at 4.5%/year. (Note that some leasing companies use 6% or higher - making their numbers look better than they might really be.) That works out to a loan amount of $22,500, give or take.
How do your savings compare over 20 years? Take a look:
Because you are able to apply your rebate and tax credit to the loan - as opposed to simply handing those over to the leasing company, your loan payment steps down in Year 2. By Year 6 the loan has saved you more money than the lease, and that differential continues to grow year after year. By the time the loan is paid off and the lease term ends, you will be $5,600 ahead having chosen a loan over a lease! (Of course, these are estimates only, your mileage may vary!)
If you are looking to go solar but need a financing vehicle, we strongly encourage you to consider the loan option. Give us a call today and let’s help you run some number and get you started on a solar project that will maximize your benefits!
*Solar loan financing provided through Admirals Bank, Equal Housing Lender, Member FDIC.
Run on Sun is competing to earn a $250,000 grant from Chase bank as part of their Mission Main Street campaign. We thought folks who were supporting us might be interested to see how we have answered the competition questionnaire and that is the topic of this post.
First, some background.
The competition is for small businesses (i.e., fewer than 100 employees) that have been operating continuously for at least the past two years. Twelve winners will receive grants of $250,000 each.
To qualify, businesses must complete the questionnaire and get 250 people to go online and vote for them. Clearly, this latter requirement is easier for some than others - if you run a storefront where customers come by everyday, getting 250 of them to vote for you is pretty easy. But for a company like Run on Sun, where we mostly do “one and done” projects for our clients, it can be quite a slog to get to 250. (You can help by clicking on the giant logo above to vote for us.)
The questionnaire asks five questions which are all pretty straightforward, but here’s the rub - you only get 500 characters in which to answer! Counting spaces and punctuation!!! (Oops, there goes three characters with those exclamation points!) To say that this puts a premium on brevity would be a major understatement. Still, we gave it our best shot. So, without further ado, here are our responses:
1. Tell us about your business. What inspired you to start your business? How is your business successful? What makes it unique?
I founded Run on Sun to replace the well monetized misery of Big Law with a chance to do well while doing some good. Seeking solar for my own home convinced me a niche existed for a company that could answer client questions with honesty & clarity. Key to our mission, therefore, is educating the public via our website, blog & recently published book, Commercial Solar: Step-by-Step. Our three owners have earned the distinction of NABCEP certification, a claim no other solar company can make.
2. How is your business involved with the community you serve?
We serve two communities: LA & the broader solar industry.
LA: We facilitated the donation of solar equipment to USC’s Solar Decathlon team. As their pro bono solar contractor, we provided thousands of dollars of in-kind assistance on their entry, fluxHome, to be donated to a family near USC.
Solar Industry: Our widely read blog, a respected voice on best practices and making our industry viable long term, has been quoted in respected print media (e.g., Wall Street Journal, LA Times).
3. What would a $250,000 grant mean to your business and how will you utilize the funds to ensure long-term growth and stability?
We would capitalize on our recent growth by spending:
- $73,500-Expand into new office/warehouse space
- $37,800-Office Manager @ 30 hrs/wk
- $48,000-Salesperson base salary for two years (commission from sales)
- $24,000-Second salesperson base in Y2
- $18,000-Online marketing
- $10,000-Website redesign
- $2,750-Direct mail to commercial clients of our book, Commercial Solar
We will grow our commercial project pipeline, hire additional crews (from project proceeds) & expand our local community outreach.
4. What challenges can you identify for your business, and how do you plan to overcome them?
Identifying & retaining superlative sales staff is hard–we will address this by tapping our extensive network of solar contacts to attract the best possible talent. We will also offer best-in-class commission payments tied to performance that does not require high-pressure tactics.
Hiring our office manager will provide needed admin assistance to manage our growth, and free our core personnel to do what they do best–strategize, market, design & build world-class solar power systems.
5. Describe the talent and skill of your employees, and how they contribute to a successful business.
Our company is diverse: 50% female or minority.
Our chief electrician is a woman with 20-years’ experience in industrial electrical work.
Our Founder’s experience at Bell Labs, teaching high school & practicing law, gave him the ability to explain solar’s value to potential clients ranging from homeowners, to school boards & CEOs.
We have earned solar’s most prestigious certification: NABCEP.
This grant will expand our reach, enabling us to renew our business of making a more sustainable world.
What do you think? If you like what we have to say, please take a moment and vote!
A key to the growth of solar, particularly commercial solar, is the availability of affordable storage solutions. Two recent developments suggest that we are about to see dramatic growth in this vital market sector.
One week ago the California Public Utilities Commission (CPUC) voted five to nothing approving a plan to require the three investor-owned utilities (SCE, PG&E, and SDG&E) to procure 1,325 MW of energy storage by 2020, with installation completed by no later than the end of 2024. Both SCE and PG&E are required to procure 580 MW each, with the remaining 165 MW allocated to SDG&E. 200 MW of that 1,325 MW total is to be interconnected at the customer’s site. In addition, the decision provides a timeline for this to happen with the first 200 MW to be procured by the end of next year.
Other electric service providers, like the munis, will have to procure energy storage equal to 1 percent of their annual peak load by 2020. Those storage systems can also include customer sited and/or customer-owned storage devices as long as they were installed after January 1, 2010.
Large scale pumped hydro storage (greater than 50 MW) is excluded from the program, but storage obtained from plug-in electric vehicles can be counted.
This is a tremendously significant decision as the mandate will surely drive R&D as well as deployment investment and help provide a ready market for these emerging technologies.
An announcement this week during Solar Power International shows how that investment is already starting to happen.
Stem - the company with the clever technology for using storage to “smooth out” the demand peaks that drive commercial energy costs - just announced a $5 million project finance fund with Clean Feet Investors (CFI). From the parties’ press release:
The new financing model, which Stem developed in collaboration with CFI, is designed to open access to a wider pool of customers by removing barriers to adoption, enabling up to 15 MW of energy storage to be deployed. With this financing capability, Stem hopes to follow the dramatic growth trajectory pioneered by the third party ownership model in the solar industry. Stem and CFI plan other innovative financing offers for customers including performance-based and shared savings financing solutions with the capital from this financing.
“In addition to breakthroughs in technology, Stem is focused on driving business model innovation,” said Prakesh Patel, Stem’s vice president of capital markets and strategy. “By working closely with CFI, I believe we have created a unique offering to help accelerate customer adoption of Stem systems. This transaction paves the way for Stem to become one of the first efficiency technologies to achieve bankability.”
“Deployment capital is essential for Stem to get their technology in the hands of their customers – many of whom prefer a “pay as you save” offering,” added Jigar Shah, a principal at Clean Feet, and founder of the largest solar services company, SunEdison.
Allowing companies to install Stem’s technology with little or nothing down will help those companies save money at the same time it allows Stem to ramp up. This is great news for the solar industry since it is posed to provide the energy that Stem’s system later distributes as needed to offset those costly demand peaks.
Of course, this isn’t exactly great news for the utilities who, if this technology were widely adopted, would see a huge revenue hit as more and more commercial customers were able to lop-off the most expensive energy they now have to procure. Whether it is the continuation of net-metering on the residential side or the ability to eliminate the worst of demand charges on the commercial side, the pressure on the utilities will only continue to grow. But for their customers, things have never looked brighter.
We have written about the faux populism of electric utilities decrying solar generally - and net metering in particular - as unfair to poorer utility customers. But is that true? Are solar incentives really a question of robbing the poor to give to the rich? (H/T greentechsolar.)
Attacks on the solar industry as being unfair have been on the rise and getting nasty - and not just in California where folks like Ms. Burt from PG&E have been accusing the industry of being a Robin Hood in reverse. For example, over in Arizona, APS - the state’s largest utility - was just discovered as having spent thousands of dollars supporting attack ads against the solar industry. “We are in a political battle,” said APS Spokesman Jim McDonald. “We didn’t ask for it. But we are not going to lie down and get our heads kicked in. We are just not. We are obligated to fight. It is irresponsible to our customers not to fight back.”
And how are they fighting back? With ads like this one:
There’s so many things wrong with that ad - for example, I love the irony of the ad attacking “out of state solar companies” when the ad was produced by a DC-based lobbying group!
But the real message is the class warfare meme: “Out of state billionaires using your hard-earned dollars to subsidize their wealthy customers.”
Which begs the question - are solar customer really wealthy?
To be sure some are, and back in the day, perhaps most were. But as solar costs have plummeted, solar has become more affordable for more people. We see that in our own business - we have had our share of wealthy clients, but certainly the majority of our residential clients appear to be of far more modest means.
Now a study is out from the non-partisan Center For American Progress titled, Solar Power to the People: The Rise of Rooftop Solar Among the Middle Class, that seeks to answer that question more generally. The study looked at solar installations in the three biggest solar markets in the US - California, Arizona and New Jersey - and correlated census zip-code median income data against the locations for solar installs. What they discovered will surprise many and directly undercuts the faux populists at Big Energy.
Check out this chart - click for larger - it shows the distribution of solar installations across income range for these three markets over time. Interestingly, in each state, the distribution follows a similar patter with more than 60% of all installations occurring in zip codes with a median income of between $40,00-$90,000. In Arizona, where allegedly all those hard-earned dollars are going to wealthy customers, just under 80% of the installs were in middle-income zip codes! Here in California, two-thirds of installations are in middle-income zip codes. That tracks with our experience: we’ve done lots of installs in Pasadena, South Pasadena and Altadena - but none in San Marino.
As alternative financing mechanisms combine with lower prices, this is a trend that will surely continue. (Indeed, intelligent solar loan programs are the best development yet - and we will have more to say about that later this week.)
Which makes it hard to argue that solar is a rich man’s toy when two thirds of the installs are occurring outside of rich person enclaves. And yes, we realize that zip code median income is not a perfect proxy for wealth of the person installing, but it is a better proxy than any being used by the other side of this debate.
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