Earth Day Brings EnergySage to Rooftop Solar
New website promises quick solar cost analyses
Despite its reputation as a luxury item, residential solar power in the U.S. is found mostly on the roofs of middle-class households. "More than 75% of the people who put solar on their homes are actually ... making between $45,000 and $95,000 a year," says Minh Le, director of the U.S. Department of Energy's SunShot Initiative. "Those people are making economic decisions. They're not trying to do it because it feels good." Solar prices have fallen dramatically in recent years, and new financing options – leases, loans, and on-bill financing – have broadened the market. Nonetheless, solar panels have yet to appear on the average American's shopping list.
That could soon change. Since its inception in 2011, the SunShot Initiative has helped fund more than 350 solar-related projects, with the goal of making solar cost-competitive with conventional electricity sources by 2020. Halfway to that deadline, says Le, the industry is about 70% of the way toward the goal. If successful, SunShot-supported companies such as EnergySage – which launches in Austin on Earth Day, April 22 – will play an important role in making up the remaining 30%.
Based in Boston, EnergySage is an online portal through which shoppers can solicit customized bids from vetted installation companies, and compare those bids in an apples-to-apples format. It has experts available to field customer questions without allegiance to any particular installer or product, and includes blogs, videos, and other resources for doing research on solar.
The company's local launch means that cost and savings calculations will now be tailored to Austin Energy customers. Thanks to newly incorporated AE data, calculations will reflect AE's incentives and rebates, the residential solar rate, and average local installation costs, according to AE Solar Energy Services Manager Danielle Murray. "We're very excited to have this tool available," she says, because it will help people "understand their solar potential with a few easy clicks."
EnergySage founder and Chief Executive Vikram Aggarwal used to work as a consultant helping people shop for retail solar systems – a "confusing, time-consuming process," he recalls. First, he had to figure out, "Who are the good installers? What makes them good?" He built spreadsheets to track installers' quotes but found comparisons tricky among different types and brands of panels and inverters, as well as the variety of financing mechanisms and rebates. "Each of them is making a different claim that I'm going to 'save that much,'" thought Aggarwal. "How do I compare all of these?"
EnergySage grew out of Aggarwal's desire to "bring all these choices in one place, and then show this information in a transparent fashion." In about two minutes on the site, anyone can get an estimate of cost and savings for their particular home or business, without sharing personal information beyond an address and average monthly spending on electricity. The site uses Google satellite images to gauge a property's solar potential.
"You go to your specific house, and you put the dot right dead square on your roof," says Nacogdoches veterinarian Tim Cherry, a recent EnergySage customer. Before running across an article on EnergySage, he had trouble finding a good installer. "I don't think I would have this system if I hadn't accidentally bumped into EnergySage," he said, "because I'd still be out here floundering around." In his first week with the new system, Cherry used only $2.30 worth of electricity from the grid. He anticipates spending about $300 a year on electricity now – a $1,500 savings from previous years. "That's a 10% return on my investment," he says – twice what he gets on mutual funds. "When the sun shines," he says, "I make money."
Some Austin installers have mixed feelings about EnergySage. "That ability to really go in there and do a little bit of research up front and get excited about solar in a tangible way ... absolutely there's value to that," says David Dixon of green building company Native. Nonetheless, he worries that EnergySage's comparisons might not adequately showcase each installer's unique services. "All of us have slightly different stories to tell, different products, different value propositions," he says. "It means our business model is forced to be pretty one-dimensional," agrees Lighthouse Solar's Stan Pipkin. Moreover, losing the opportunity to develop a rapport with customers "on the front end" is problematic. "I think EnergySage in particular really tries to own the customer," he says.
Most consumers don't follow solar closely, and it's a rapidly changing market. Prices fall fast – 20% in Texas just last year, according to the Solar Energy Industries Association. Industry polls suggest that most people remain unaware of these trends. "The idea that solar is for the rich is kind of a bumper sticker out there," says Pipkin.
Meanwhile, most financing mechanisms – which soften the blow of up-front costs – are so new that even the headlines haven't caught up. "We didn't have a 20-year solar loan three years ago," says Dixon. "We do now." So would-be customers still may not realize that these changes put the cost of solar within reach of average budgets; in 2012, 97% of respondents to a Sunrun poll overestimated the costs of solar.
The primary significance of EnergySage's innovation – and why it has attracted DOE interest – is that it could help installers (and ultimately customers) save money. "The reason EnergySage is so exciting is because they're addressing a very important cost driver for consumers," says Le. As innovation and economies of scale have driven down hard costs, soft costs have become a major portion of the price for solar (about 64%, Le says). "Even if you got the hardware – the solar panels and the electronics – for free," he points out, "it would still cost you a significant amount of money in order to get that system installed, interconnected, etc."
Solar companies' considerable marketing efforts can account for a major chunk of those soft costs; companies that participate in EnergySage's marketplace should be able to reduce such costs by 50% or more, says Aggarwal. "This customer acquisition soft-cost piece has really been identified by everyone as an area of opportunity for further cost reduction," says Charlie Hemmeline, executive director of the Texas Solar Power Association.
It's unclear how much room for improvement exists in Austin's particularly robust market. But a team of UT researchers at the Energy Systems Transformation Group see EnergySage's local launch as an important learning opportunity. EST will be working with DOE's Solar Energy Evolution and Diffusion Studies program to study EnergySage's market impacts. Industry watchers will be following closely. If the EnergySage model works as planned, consumers will be watching, too – and buying.