Brad Ideas - Math getting better? -- CitizenRe - Comments

Demand for electricity is

Orion — Fri, 09 May 2008 18:10:08 -0700

Demand for electricity is only going to go UP so to meet that demand utility companies will either have to build new plants or buy power from someone else. Citizenre et al = "someone else". In effect these alternative energy companies offset the long-term capital expenditures that utility companies pay to satify their customers.

Most utility companies would rather be distributors rather than generators anyway. That is, they charge the players a monthly fee to connect to the grid, and let someone else move power across their grid. "Commercial" solar installations pay a monthly connection fee while, at the moment, "residential" solar installations don't and that raises a red flag with me for this kind of scheme. It would take a very small change in policy to declare a scheme like Citizenre's a commercial solar enterprise and start billing the homeowners for access to the grid. That could blow their business model all to smithereens, leaving the company bankrupt and the homeowners with obsolete grid-tied solar systems on their roofs that they can't legally keep connected to the grid.

Citizenre-Solar

Anonymous — Mon, 14 Apr 2008 19:12:06 -0700

What I can't find anywhere is what happens if solar does really catch on. Eventually, peak demand will be at nighttime when everyone has to buy. Also too many secretes scares me. A ligitimate company with a great plan could share a lot more facts and info.

CitizenRe

andreea360 — Sat, 16 Feb 2008 04:40:52 -0800

And the most fundamental question is, is CitizenRe out to put all other solar businesses out of business, is it beneficial since who will “buy” a system when they can just pay the electric bill at whatever level they are at?

Pretty simple

brad — Sun, 16 Dec 2007 13:15:31 -0800

While there are a fair number who will spend more on their power to "do the right thing" environmentally, they are still too few to make the real difference that must be made. Thus, unfortunately, what really matters is making it economically competitive. Cheaper than fossil fuels is best, though something can be done if you get nearer to them, especially if the fossil fuels get externality taxes put on them.

cost to me vs cost to enviornment

Anonymous — Sat, 15 Dec 2007 12:34:52 -0800

It seems that most of the comments revolve around whether or not the consumer will save money. For me, that is not even a consideration. I cannot afford to risk many thousands of dollars on a solar installation. But, an experiment with low cost that moves some of my own use from grid-supported to solar-supported, is a very attractive option! If I pay a little more, the same, or less than the utility company charges, that is not important. Reducing my impact on the environment is! Why not see if it will work?

CitizenRE has a competitor...

SolarKismet — Mon, 27 Aug 2007 09:50:20 -0700

CitizenRE now has a competitor, and they'll install the first solar panel before CitizenRE does...

General Motors, Staples and

Anonymous — Fri, 13 Jul 2007 09:03:47 -0700

General Motors, Staples and SunEdison are doing this. General Electric Energy Fund is a major player in this arena already. Many large companies are seeing benefits from soalr energy and are using the "Solar Services Model" to their advantage.

Any recent news?

CORK! — Mon, 02 Jul 2007 06:52:44 -0700

Does anyone (I include Rob here...) have any recent news on the program? I am just wondering if ground has been broken on the manufacturing facility, if investors were announced, if they anyone even knows WHERE the plant will be, etc. Seems like there have been no new developments since February as far as I can tell.

...understood. But there is

Anonymous — Thu, 21 Jun 2007 07:47:30 -0700

...understood. But there is a difference in reducing demand (which ends up reducing utility costs since they pay less for un-used capacity), and paying retail rates to another utility (not the customer in this case) for electricity.

I think the whole key to the regulatory concerns (at least in Florida) is determining whether Citizenre is truly selling electricity or simply renting the panels.

Thanks for all the dialogue - this is a great site.

P.S. It may be sounding like I have something against Citizenre - I don't. In fact, it doesn't affect me one bit if the company succeeds. These legal issues just interest me.

Losing customers

brad — Wed, 20 Jun 2007 22:38:35 -0700

Actually, the power companies like losing customers to solar, and customers who sell back power aren’t so bad either (though admittedly it’s at a higher price than they usually pay.) That’s why the power company gives you rebates for buying more efficient appliances, and big rebates for buying your own solar, and a discount if you will allow yourself to be cut off at peak times.

It’s called demand side management and it’s based on the idea that power plants and wires largely cost based on peak demand, but peak demand only exists (duh) at peaks. Soften the peaks and you get a much better return on investment, even if you sell a bit less power.

A utility by any other name..

Anonymous — Wed, 20 Jun 2007 14:39:47 -0700

Hereâ€™s where it gets really interesting. There is a Florida Supreme Court case (PW Ventures v. Nichols) which says that the sale of electricity to even a SINGLE customer makes the seller a â€œpublic utilityâ€ as the term is used in section 366.04, Florida Statutes, (the statute that grants the FL Public Service Commission jurisdiction over the rates, terms and conditions of utilities in Florida).

As I understand it, a Citizenre customer pays to Citizenre a monthly bill that is based entirely on the amount of electricity generated by the Citizenre-owned generation equipment. To me, the customer is purchasing the electricity, regardless of whether the customer uses it him/herself, or whether the customer passes (sells) the electricity on to the grid. A â€œpublic utilityâ€ by any other name is still a â€œpublic utility.â€

I think they are going to run into some regulatory problems under their current plan. This is not to say they canâ€™t get around it. For example, Citizenre could probably transfer ownership of the system to the customers with a lease-back provision in the contract, and then charge the customer however they want.

All I am pointing out is that IOUs donâ€™t take kindly to losing business. These are the things that jumped out to me when I first heard of this company, and IOUs will surely raise these issues if they start losing customers to Citizenre.

Interesting

brad — Wed, 20 Jun 2007 10:17:33 -0700

Though one note is that CR is not selling the customer the power consumed, they are selling them the power generated, whether they consume it or not. (They will, of course, because they will sell any power they don't consume back to the utility. It is the homeowner, not CitizenRe that sells the power back on a net metering basis.)

So it looks a bit more like a lease, priced according to how much the panels generate, than a power company. It is marketed like a power company though.

In Florida, investor owned

Anonymous — Wed, 20 Jun 2007 09:22:17 -0700

In Florida, investor owned utilities (IOUs) like Gulf Power are subject to Rule 25-6.065, Florida Administrative Code ("Interconnection for Small Photovoltaic Systems"). This rule requires IOUs to provide standard interconnection agreements with small PV systems, and to either credit custmomer accounts for excess generation provided back to the grid or to net meter (however they are only required to roll back the meter to zero). HOWEVER, the rule was written with the intention of interconnecting to CUSTOMER-OWNED pv systems. IOUs like Gulf Power are surely going to argue that this rule is inapplicable to Citizenre systems. This is because Citizenre has set themselves up in a position to be the utility. They are providing the generation equipment, they retain ownership of the generation equipment, they meter the electricity consumed, and they bill the customer based on the kWh consumed. Renewable generation is encouraged in Florida, however, small power producers must sell their electricity to the UTILITY. Here, Citizenre is trying to sell its electricity to the RETAIL CUSTOMER. This is clearly a violation of existing territorial agreements, and results in uneconomic duplication of generating facilities.

The Great Pyramid

Brian — Tue, 19 Jun 2007 08:42:23 -0700

I've read lots of these type of blogs on Citizenre, and it is iteresting to see how may "ecopreneurs" admit that they have been involved in MLM schemes in the past...then they swear that this one is different. It just goes to show the type of people that this compay is drawing for its sales associates.

Take this comment as you will...just seems interesting to me.

Lets Discuss MLM

Anonymous — Mon, 18 Jun 2007 15:13:03 -0700

I have been in MLM before, Amway and Photomax.

It seems that each one is more focused on getting a "downline" then on providing a product or service and based on the model why should you. For instance..

When someone signs up below you they pay a fee of some sort, usually a kit is included and there are different levels to buy in at. As soon as they buy in you get a commission/kickback depending on the level they buy in at. So, right of the bat you are incentivized (sp) to just sign up people (Friends and Family!)regardless if they are interested in the product/service that the company provides. Once you get a group in you sit them down and convince them to do the same thing. If the person is more then one level below you then your commission is less but exponentialy you are generating larger and large numbers, hence the pyramid shape. So, without selling a single widget you can make a ton of money. Here is another item to chew on.... When you signup your "upline" will sit down with you and have a commtiment meeting, "Hey new guy/gal if you really want to show your downline how committed you are then you need to be on the $50/month vitamin repurchase program, this way they will see your commitment and duplicate" of course the get a cut on this, but again you are not really buying the program your buying an example to set for your downline which you hope will do the same and thus get your cut.

Wow! Makes you want to use mouthwash!

I am an ecopreneur, I paid nothing and get nothing when signing someone below me, and nothing below him/her. I only get paid when someone installs a system, not when they sign. If anyone below my has a customer install a system then I get paid, not when they sign them up.

It would have been good of CR to come up with its own marketing/sales name instead of MLM, but I guess its to late now.

Alex

Math getting better? -- CitizenRe

brad — Fri, 12 Jan 2007 14:30:59 -0800

(Note: I have posted a followup article on CitizenRe as a result of this thread. Also a solar economics spreadsheet.)

I’ve been writing about the economics of green energy and solar PV, and have been pointed to a very interesting company named CitizenRe. Their offering suggests a major cost reduction to make solar workable.

They’re selling PV solar in a new way. Once they go into operation, they install and own the PV panels on your roof, and you commit to buy their output at a rate below your current utility rate. Few apparent catches, though there are some risks if you need to move (though they try to make that easy and will move the system once for those who do a long term contract.) You are also responsible for damage, so you either take the risk of panel damage or insure against it. Typically they provide an underpowered system and insist you live where you can sell back excess to the utility, which makes sense.

But my main question is, how can they afford to do it? They claim to be making their own panels and electrical equipment. Perhaps they can do this at such a better price they can make this affordable. Of course they take the rebates and tax credits which makes a big difference. Even so, they seem to offer panels even in lower-insolation places like New England, and to beat the prices of cheaper utilities which only charge around 8 cents/kwh.

My math suggests that with typical numbers of 2 khw/peak watt/year, to deliver 8 cents/kwh for 25 years requires an installed cost of under $2/peak watt — even less in the less sunny places. Nobody is even remotely close to this in cost, so this must require considerable reduction from rebates and tax credits.

A few other gotchas — if you need to re-roof, you must pay about $500 to temporarily remove up to 5kw of panels. And there is the risk that energy will get cheaper, leaving you locked in at a higher rate since you commit to buy all the power from the panels. While many people fear the reverse — grid power going up in price, where this is a win — in fact I think that energy getting cheaper is actually a significant risk as more and more money goes into cleantech and innovation in solar and other forms of generation.

It’s interesting that they are offering a price to compete with your own local utility. That makes sense in a “charge what the market will bear” style, but it would make more sense to market only to customers buying expensive grid power in states with high insolation (ie. the southwest.)

Even with the risks this seems like a deal with real potential — if it’s real — and I’ll be giving it more thought. Of course, for many, the big deal is that not only do they pay a competitive price, they are much greener, and even provide back-up power during the daytime. I would be interested if any readers know more about this company and their economics.

Update: There is a really detailed comment thread on this post. However, I must warn CitizenRe affiliates that while they must disclose their financial connection, they must also not provide affiliate URLs. Posts with affiliate URLs will be deleted. Some salient details: There is internal dissent. I and many others wonder why an offer this good sounding would want to stain itself by being an MLM-pyramid. Much stuff still undisclosed, some doubt on when installs will take place.