interesting comments. i've always assumed that you would be able sell the power generated at market price. but that price will be driven down when more people install similar power-generating equipment. i've been similarly thinking about social eco-friendly ideas... but in the carbon tax arena. i recently read an article about private jets charging the super rich a percentage of the fare to offset their carbon-emissions. on its own, it won't matter much, but i wonder to what degree can it be stretched to make carbon taxing a real solution.

I can't see how it is possible even if they can manufacture and install at $2/peak watt since they will have administrative costs and may be paying commissions to an AMWAY like telemarketing/sales force. I have a strange feeling about all of this.

Citizenre is going nationwide, so talking about California’s situation doesn’t cover Citizenre’s situation. I live in somewhat less than sunny Pittburgh, Pa, with lots of cheap coal waiting in dangerous holes for us. And the rebates don't work here (more so in Jersey). My wife wants me to contact Al Gore, to ask him about Citizenre, because she trusts him. Ed Begley advocates Citzenre on his website for his "Living with Ed" show, but my wife doesn't trust him (maybe if I can get Ed to call Al). The thing is, I am wiling to make a commitment for 25 years (I'm 45), I don't know if my wife is (at 51), and I wonder if solar will come down. It is the initial investment that matters, to me. How does/is Citizenre making the initial investment (loans? IPO?), and will they be able to support making the payments?
Ed Heath

They seem to be counting on a 50% reduction in cost of goods sold by 2015, and a further 50% reduction by 2025, coupled with orders of magnitude increases in plant scale and secondary mechanisms (e.g. energy storage) to manage peak demand.

http://www.citizenre.com/web/index.php?p=roadmap
http://www.citizenre.net/web/index.php?p=renu

The latter page also links to a description of their plans regarding "Renewable Energy Certificates", which they seem to expect to provide a further 5c/kwh.

All this seems to suggest that their basic plans involve energy arbitrage (buy at off-peak, resell at market), clean energy generation, and high volume manufacturing.

http://www.citizenre.com/web/index.php?p=strategy

Having read the contract,(and I am no gentleMAN, being a middle-aged lady) I notice that consumers must agree (except in off-grid applications) to purchase energy from the electric utility when consumers' demand for power exceeds their PV panels' supply, and that the Citizenre system is understood NOT to be consumers' primary source of electricity; also, the contract specifically states that there are no guarantees that adequate power will be provided by the PV panels, also that the local electric company to which the consumer is linked may be awarded surplus energy generated by consumers's PV panels without compensation to the consumer. These little items may respectively put some pennies in Citizenre's coffers and offset poor insolation conditions. One would need to read the contracts between Citizenre and the local utilities they link to, I suppose, among other references.

That reroofing problem worries me, my house is about the age where a new roof will be necessary soon. I was hoping that I would be able to install thin film PV shingles when the time came. Maybe they will treat it as a "one-time move" situation and reinstall after the roofers do their job, with no charge.

According to their literature, they try to design a system which will supply the number of kilowatts you use over a year. My house has a heat pump and I don't know if there is enough room on the roof to provide that much power over a year.

Could they be making money by selling power in the day and buying it cheaper at night?

I too stumbled across Citizenre's sites a couple of weeks ago. I was searching for information on solar power- this year's home improvement project. Because we live in NH, my husband and I had pretty much concluded from available literature that our only economically feasible solar energy use in our area would be for heating hot water, including possibly contributing to a forced hot water heat system backed up by oil or electricity. Citizenre seems to offer a way to feasibly pay the installation cost of PV electric generation over time.
I read through almost all of their sites and am interested, but wary.
The thoughtful and informative discussion here about the company's economics (if it's too good to be true...) are welcome. I wonder if the company's real revenue will come from its ability to sell clean energy credits (generated from the customer base in each state) to the various local and national electric utilities to enable them to meet regulatroy goals or mandates for minimum use of renewable energy? From law school, I remember reading congressional testimony about passage of NEPA in 1969 and other landmark federal environmental laws enacted in the '70's. One of the arguments for imposition of minimum environmental quality standards on industry was the development of a market for clean energy credits, and once market forces took hold, they would carry out good energy policy in a generally profitable way. Perhaps those economic forces are now here.
I would feel a lot more comfortable if the Citizenre site gave information on the major stockholders.

There appears to be another company offering a similar service that on its face appears legitimate. It's at: http://www.solarcity.com/company.aspx

I have recently signed on with CitizenRe and just wanted to make a couple points.

Maintenance and upgrades are part of the plan, so as the technology gets better, you will benefit from that.

If power goes down dramatically in price, at most, you will be out your deposit and or removal fee should you decide to get out of the contract (compared to still paying for, or owning an outdated system should you buy instead).

They are not available to everyone. For instance, those people who pay too low of an energy price for CitizenRe to compete.

The plan is to only provide you with up to the amount of power you need so you are not paying CitizenRe for more then you need and losing the credits earned from your power company.

Be aware, I do not know everything about this company, nor will I pretend I know what their plans for the future are, but hopefully what I wrote will answer some of your questions.

Tracy Ansell

According to Citizenre's website, found under What We Do/RECs, They plan to sell Renewable Energy Certificates. Waste producers will be able to purchase these credits to offset their emissions in order to comply with Federal and state emissions standards.

I'm a new Citizenre "ecopreneur" in California, and I can't pretend to know all the details, only that I'm working my butt off to educate myself on the issues. I do know that I've waited for 30 years for PV power to become affordable, but it hasn't seemed to be headed that way so far.
One detail that does occur to me is that we are given a figure of 2.1% as an average annual cost increase for electricity from the utility companies. And, that 2.1% annual increase assumes that the cost of coal and petroleum will only increase at the same levels they have historically, which is by no means certain.
Obviously, that can change, but given that figure, a homeowner investing only a $500 security deposit and then paying the same electric rate for the next 25 years could conceivably invest that 2.1% amount on their own and put the interest in their own pocket, rather than allowing it to accrue to the local utility company.
Conversely, a homeowner who takes out a $20,000 loan to purchase a solar PV system and pays it back at 5% over the term of a 30-year mortgage is going to be paying a huge amount of interest to do so, in addition to being responsible for maintenance and repair of the system.
In other words, they would end up paying almost twice the original cost of the system, and they would have to become far more technically sophisticated than the usual person in order to keep repair costs down. And they'd still have to pay for replacement equipment when necessary.
Contrast that with locking in your electricity rate for the next 25 years, NOT financing that equipment cost, risking only $500, and having the option of investing that 2.1% increase for yourself, and this seems like an idea that's worth approaching.
Again, I'm not an expert, but I'm intrigued enough with the possibilities to take a chance on it.

I'm not sure that I get your point, Brad. It seems that you are quibbling over whether or not to use regular or premium unleaded when your vehicle is a deisel. Does the math bother you because you think Citizenre is a scam? You don't express this directly, and sometimes you seem to recommend them. I'm a little confused (and I'd like to know if they are a scam).

Alternately, so what if the math doesn't add up or you end up paying a few cents more per kwh? The point is that you will be using solar energy, rather than fossil fuels. For some people, this is more important than quibbling over the math. If your interest is in going solar NOW, Citizenre is the way to go; if your interest is in saving money, then maybe the environment isn't your top priority.

For me, the calculations need to be based on the impact the type of energy used is having on the planet. I personally prefer solar because I am well aware of the consequences (environmentally, socially, politically) of fossil fuels. Besides, it just makes sense to use an energy source that COMES TO US in MASS AMOUNTS in a form that we can EASILY HARNESS.

We make choices all the time that are despite the math; for instance, leasing a car rather than buying one. It makes more sense to buy the car because you have made an investment and can try to get a return on your investment. Leasing a car means you are taking a loss, period; however, leasing is popular because people want the option of upgrading and they want someone else to take care of all of the details (maintenance, paperwork, etc.)

I think what Citizenre is doing is a step in the right direction--it's making solar available to an entire demographic of people for whom solar wasn't an option before. It also caters to the people who aren't as concerned with making a return on their investment, or how the company is going to do that. I only wish it were available to renters (like me).

If you want to check some math, click on the Solar Savings Calculator at www.jointhesolution.com. It calculates how many cars could be (hypothetically) taken off the road if you switched to solar. I find this to be the most important math.

I appreciate this thread of conversation that you have instigated, Brad. I wish more people were talking about it in such a sensical manner. I appreciate your math too, because as much as I would like to disregard it, it is a major consideration for most--especially those who don't consider themselves environmentalists. If math is what will bring people to solar power, then calculate away!

No phone numbers to call. No actual products to sell. No biographies of the leadership. Lots of hype. Lots of exclamation points. Grand plans but a lack of concrete details. I'm very wary...

Read my assessment.

They have no factory. They say they are building one but won't say where. There are no pictures of the construction. You can't get a system installed because they don't exist (yet, supposedly). There are only a couple of actual employees of the company, and there are no corporate offices.

What they do have is EXTENSIVE guidelines on their website about how you can make money peddling their systems. You get money for the people you sign up and the people they sign up, etc. It is clearly a multi-level marketing scheme.

When they can actually show me some solar panels that THEY made in THEIR factory, I will consider their product. Not until. DO NOT give these people money until you can actually have the panels installed. If you do, you're crazy. Plain and simple.

That's a good point Brad, and as I said I am not here to convert people to liking MLM, however I did want to say one thing about this particular pay plan.

They are paying a small commission monthly on the memberships you market. This means that for every membership, you will get a small chunk of each customers bill.

It is not too terribly much by itself, but if you take the time to bring the company a lot of business you will keep getting that money for up to 25 years.

Most MLM's you have to continually keep selling product to the same customers over and over if you want to keep getting paid.

I think that this instant form of residual income is what will draw in and keep happy most people who like MLM.

And that is aside from the fact that most of us really do want to do something we feel good about.

Contrast that with some of these health and wellness companies where you really don't know if the product is helping, or is just some fruit juice being passed off at a high price....

Anyway, that's the last I will write regarding the comp. plan. I just thought it was worth mentioning.

I have just recently signed up for Citizenre and still have a lot to learn. But to me there are two big reasons to look into this. One is that people with no money to buy a system now have a way to contribute to being green. That is a huge barrier for most of the population. Then there is the installation and maintenence of the system which is huge! I have a small cabin that I installed a small system in, and it took me forever to figure out, then install. It is indeed way more than most people want to do. So far I have been reading and rereading the information and even though it seems too good to be true, the only flaw I see is that I am still scratching my head trying to figure out how they can financially do this. But apparently they can. And as far as I can see they will let you break the contract for the $500 deposit. And by the way, if you need a new roof they will remove the system once for free for this and then replace it when the roof is back. The big thing is that we can help move the planet to a cleaner place through this company. I am willing to risk $500 for that fact alone. Doesn't seem like a huge loss if it doesn't work out.
Jerri McCombs

Anyone thinking of signing up as a customer of Citizenre should take a look at this memo which was leaked to the public yesterday. It's written by someone from within the organization and contains 61 pages of info on the ethics violations of the company. Here's the scoop. (via linkitt.com)
Sorry for the plain-jane page layout of my webpage. I got hit with a killer hosting bill and had to put some ads on to cover costs of keeping it online. I'll make it pretty again one day soon.

(Editor's note, this post was moved from being posted in the wrong thread, I suspect deliberately.)

I've summarized some information from the memo leak here...

I see lots of good points up above here, and I've done a lot of reflection on this whole thing.
What I've decided is, I'm taking a chance on this, maybe JUST BECAUSE it sounds crazy. I think that it may be an idea whose time has come, and that it may succeed, not because of all the inherent flaws and imperfect people, but in spite of or even because of them.

Nobody is asking me or anyone else for a dime, just for a commitment to an idea. As long as I tell people what I believe to be true, and give them as much information as I can regarding what appear to be possible problems (mostly regarding implementation delays, from what I can see), I'll let them come to their own conclusions. And if they want to take a crazy chance along with me, well, I'll have company on what could be an incredible adventure, or, at worst, a free chance to learn something valuable.

All I know is that nobody is asking anyone for any money, and perhaps the reason for the MLM system is just to generate a critical mass in order to bring a revolutionary idea into reality.

I'm going to keep wishing on falling stars, too! Not everything is just about the math!

I can understand peoples hesitancy regarding MLM. I mean, there has been a lot of crap going on in the industry, and when I first signed on with one, I almost walked the other way. It wasn't until I spent a few weeks researching the product that I decided the compensation plan didn't matter. I believe in the product, and if I do, so will many others. How many are going to ask me how I get paid? How many are going to care as long as they get a quality product or service?

If this was a situation where most of the associates were customers because that was the only way they could get paid, I would understand. But I am an associate and not a customer (although that is only because I do not own a home).

At any rate, I believe each of us who are associates have been up front about it. At least it seemed that way to me.

I would have thought the links would contribute to what we said, because it was a direct source from which people could get their answers. Pretty much everything (aside from the things to be released in the press releases)that people are asking can be answered at the websites linked to. Not to mention, if people really want to learn more, they can sign as an associate and get a behind the scenes view as well as ask their questions and get answers from the source. It's not as if it costs them anything.

They also have 4 live daily calls where both associates and customers can call in, listen to the information, and ask questions.

I would like to thank you for keeping the posts, and for allowing us to discuss this though. I believe it is important for everyone to see both sides. The sides of those who are anonymously posting negative things and the sides of those who are willing to say who they are when trying to help answer those posts.

From what I understand, there will be a point by point rebuttal to the "memo" above. I can't wait to see it, and will bring it here when I do if someone doesn't beat me to it.

Let me clear a few things up. We have not yet broken ground on the manufacturing plant. We are currently doing our engineering. It is not that we are trying to be secretive...it is simply that we are in active negotiations and it would not be prudent to share all of that information at this time.

We make it clear to our Ecopreneurs and our customers that they will have to wait a long time before the plant comes online. We are building the largest solar manufacturing plant in the world: 600,000 SF with 1,600 workers on three rotating shifts so it will be producing 24 hours a day. This is no small undertaking.

The people who are working with us now do so because they believe in our mission. We charge nothing for customers to sign up and nothing for reps to sign up. Many of our reps are working extremely hard so we have committed to pay $5,000,000 in commissions to the field before we even install our first unit.

Contrary to the opinions of many on this thread, MLM is the best vehicle for a company to introduce a new technology that needs some personal explanation. As a company we have a fixed cost for marketing and we don't have to pay for a large sales infrastracture.

MLM is a $120 Billion a year industry because it works. The largest cosmetic company in the world uses MLM. Many fortune 100 companies have used or still use MLM. Warren Buffet bought the controlling interest of Pampered Chef, an MLM, in 2005. He said it was a brilliant business model.

Our goal is to educate a focused group of people who are passionate about our mission and offer them a vehicle to earn money while doing something they believe in.

We have made mistakes and we will continue to learn and grow. Our barrier to entry is free...so we have a broad range of talent and training with people sharing our message. Some have been "overly enthusiastic" and we are taking measures to correct that. We never plan to charge a fee to join, but we will increase our testing so their will be a higher standard of training.

We will have more press releases during the next month that will help answer many of your questions.

Thanks for your interest.

Rob Styler
President, Powur of Citizenre

That was not an "internal memo" or a "consultant" who wrote that document. It was one of our independent reps who had concerns and spent a considerable time to express them.

We welcome all questions. Of course, he never should have used our logos, and some of the information is not accurate, but we will have an official response to all concerns raised within the next few days.

Thanks,

Rob

Mr. Wolfe, a solar industry expert, had some concerns. Here are our answers:

Response to Re-Markets List on Topica.com
Rob Wills et al, Feb 11, 2007

Dear Jeff Wolfe, and fellow Solar Industry members:

Greetings from Citizenre.

We hear your concerns about our business plan. We are responding to your questions and modifying our plans to address the issues that you raise.

At this point, Citizenre is a startup company. We are still putting our management team together. We still have a lot to do. We have not broken ground yet on our PV plant, but plan to do so soon.

Our goal is to revolutionize the PV industry with:
- Successful end-user marketing
- Financing of end-user systems
- Vertically-integrated product line (i.e., integrated inverters)
- Innovative installation methods
- High volume PV manufacturing

The initial marketing program, as stated on the web site, is a pilot. It is showing us what can be done, and in some cases, what not to do. Viral marketing is very powerful, but can suffer from exaggerated claims as the message passes from one person to another.
We are moving quickly to correct misconceptions.

We believe that, rather than being a threat to the solar industry, Citizenre will greatly accelerate its growth.

The ideas behind the business plan come in part from work done by NREL, REPP, and the many NGOs and Environmental Organizations who have sought to commercialize PV effectively. If we do not succeed in our full plan, others will follow our path. At some point, someone will succeed with this plan.

What makes us different is that we are not owned by a multi-national oil or electric company, and so have a different reason for being in business – we want to see solar succeed.

Now the answers to your questions:

Sales Targets

Q: Goal of 100,000 sales in first year. Let's call it an average $20,000 per sale. That's $2 Billion of cost incurred. Various interviews have indicated that Citizenre has / is getting / will get (which is it?) $650MM of investment. How does that buy $2BB of installs, year one?

So after year one, we get to year two. Year two has another $2BB of equipment installed. More capital required. Debt markets? Sure, just need to convince them. They will loan against a program like this in maybe 5 years. Right now, you might get 3 - 5 year loans for part of it, but not all of it, and not for the terms needed. I'm actually in the capital markets, although nowhere near this level, and this stuff does not fall from the trees.

A: From this question, it appears that you are blurring the lines between the production facility’s ultimate nameplate capacity and the actual output of the facility during the scale-up of production capabilities.

Roughly nine months after we break ground, Citizenre plans to produce 100MW of PV. There are incentives built in to our construction contracts to motivate an earlier start date – as early as month-6 - and conversely, there are penalties for taking longer. It will take approximate 15 more months to bring the plant online fully. Under this phased approach, we expect that it will take 2 years to fully complete our first facility.

Nevertheless, the capacity we expect 9 months after ground breaking will at minimum produce enough PV for 20,000 systems per year. The target of 20,000 systems/year is based on our assessment of the market which assumes an average system size of 4.5 kWp.

Continuing to ramp-up and bring additional phases online will increase our capacity over the subsequent 15 months. Ultimately, we will have the ability to deliver to about 100,000 homes each year.

Once we prove the feasibility of the first plant, we will duplicate the design and bring more capacity online.

You and others have asked: how is this financed? We have commitments to finance construction of the plant. But as you correctly stated, construction financing does not finance the “Synthetic Power Producer” structure that supports the installation of systems on residential homes. Your estimation of $2 billion per annum is a little high, which is to be expected if you base your numbers on the way that the PV industry does business now. The approach that you should be taking is one that relies on sensible governmental support and more weight towards supply-chain stability, standardization, and operational efficiencies. You may also be overlooking the fact that we have the ability to carry manufacturer’s equity in these financial structures.

The power of Citizenre’s innovative business and financial model has already convinced major investment players of the tremendous opportunity ahead. The first round of investment will be announced shortly along with the plant location; subsequent rounds will underwrite each year’s residential installations.

State Incentives

Q: And Citizenre has said that incentives just get in the way. That's a good thing, because no state incentive program can put up with this run rate. Outside of CA no one has anything even close, and at this rate Citizenre would deplete the CSI in a couple of years. Ok if it gets the solar out there, but not if it then falls on it's face.

A: The main incentive that we need is a consistent net-metering law. We will work with the States and new Democratic congress to move towards a National net-metering law.

One of the things provided by our large dedicated customer-base is a significant lobbying base. We expect that we be able to change state and federal policy using this power.

Beyond the necessity for reasonable net-metering laws or a blanket national net-metering law, we will help advocate for 1) meaningful renewable portfolio standards; 2) carbon and other green-house gas taxes; 3) the push for a distributed portfolio standard to capture the economic and national security benefits that the distributed nature of PV provides; and 4) the continuation of renewable energy subsidy programs that place more emphasis on production.

Financing

Q: Where's the money? No one invests $650MM without some PR, an announcement, etc. And no one receives $650MM without an announcement, PR, etc. This is the most stealth money I've ever not heard of.
Understand that $650MM is a very significant percentage of all the money invested in solar to-date. Who are the investors?

A: The investors are large, well-known financial institutions. We will announce their identity and the location of our first manufacturing plant shortly.

Financial Model & Solar-Silicon Cost

Q: I've seen various people's attempts to figure out Citizenre’s financial model. No one has made it work. Even if we get the proposed federal tax credit, the numbers do not work at any reasonable cost for equipment, sales and G&A. The only way it works is if Citizenre is somehow able to lose on each sale! Not a great business model, but could help to get solar out there faster. PV costs money. Without long term silicon contracts (and those cost additional huge money) then Citizenre will be paying well over $60/kg of silicon. This puts a floor price on your modules. You're not buying glass and aluminum any cheaper than anyone else. So your product cannot be that much cheaper. Yes, you can cut out the middleman and slash the installation budget (perhaps), but you cannot get to half price out of the box, or even in a few years.

Where are you getting silicon? Do you have signed and sealed non-cancellable long term contracts for 200 to 500 MW?

A: We understand the solar-grade silicon market thoroughly. We also understand that secure long-term contracts cost $60 to $90/kg now, and that the spot market price is near $200. We have made arrangements for supply stability at the SG-Si level as well as for the other raw materials that are necessary in the production of PV modules. And although the cost savings are not tremendous – based on our bulk purchase, they are lower than what the average plant in the industry now pays. This is simply economy-of-scale.

SEIA and Legislation

Q: Is Citizenre a member of SEIA? Are you contributing money toward the hiring of very expensive lobbyists? Are you working to get legislation passed that helps the solar industry? Or are you riding on the work and money of others?

A: Yes we are a member of SEIA – and ASES, SEPA, IREC, and ACORE. Yes, we are working to get legislation passed that helps the solar industry - once again, a large customer base will be the most powerful tool that the industry has ever had for policy change. We will devote a considerable part of our profits to supporting SEIA and the other organizations in their legislative efforts.

We are indeed following the work of many who came before us – going back to Bill Yerkes and Arco Solar, the foundation build by JPL, Sandia and SERI (now NREL) and the contributions of all the manufacturers and installers who have brought us to where we are now. Most of our senior management has been in the solar business for more than 20 years.

AC Modules

Q: We've never had a good, inexpensive, reliable AC module (I.E. micro inverter). Why now? What's new and different and makes this unit good?
How many hours of field testing has it gone through? Tough environment on the back of a module. How many hours has it been on the roof?

A: Please check the definition of “AC Module” in the NEC. (I helped to write it). I agree that putting an inverter on the back of a module is a bad idea – we don’t plan to do that.

We are still in the development stage for this part of the system, but do have prototypes running. We have one of the most experienced inverter design groups in the country – we can make this work. Nevertheless, the prototype may have unanticipated problems in manufacturing, in getting into commercial scale production, particularly at the volumes we anticipate needing. Thus, we have created a contingency plan for the bulk-purchase of inverters if we see production delays.

Q: I assume product is at UL for testing (both PV modules and inverters). If not, CitizenRe cannot make the dates they are promising to their customers of September installs, since not only does the equipment need to pass UL, but it also needs to the be manufactured in volume. Please provide proof that equipment is at UL for testing, and an estimate of certification date (I realize that's hard with UL, but everyone has a schedule).

A: UL’s own estimate for passing the full set of 1547.1 tests is 3 calendar months. The module plant start-up will be approximately 12 months, so we will have enough time for field testing.

Manufacturing Plant

Q: Where is the PV manufacturing plant and where is the inverter manufacturing plant? Ground must be broken by now. How about some photos of construction? A 500MW plant (with only 100MW built out in the first year) is not a small place. It's also not cheap. My best guess is about $200MM for phase one. Of course, we have another numbers problem here.
If the plant is only built out to 100MW, and you sell 100,000 systems at 2kW each (would you sell smaller, on average?) then that requires 200MW of capacity. It just seems like Citizenre’s statements throw out big numbers, but the big numbers do not match each other. That means that the numbers are just being made up, that there is no plan. Please indicate what the real installation goals and manufacturing capacities will be for year one and two.

A: As stated above, we have not broken ground on the manufacturing plant; what’s more, we will not even be able to break ground immediately after the location is announced. We will have, however, a fast-track permitting process and hope to begin shipments at a rate just over 8 MW per month roughly 9 months after ground-breaking. That means delivering nearly 25 MW to the industry in Year-1 alone. The scaling up of the plant to 500MWp capacity over Year-2 will give us another 250 MW in addition to the existing 100MW. With the announcement now expected by mid-March, that places the first installations in December 2007. Translated to systems, this gives us an estimated maximum of 5000 installs Year-1, 70,000 installs Year-2.

The numbers may not “match up”, as you put it, because there are other parts to the equation that either have not yet been described, or may never be, because they represent proprietary solutions that reduce our costs well beyond the industry’s current experience.

Installation

Q: I hear that the installs take half a day. Amazing. Even with AC modules (so no inverter hook up per se), one still has to rack and install modules. I could believe a day in some areas (1 story, low slope roofs, simple electrical entrance). But this means that the systems must be sized to avoid main taps, cannot be on tile roofs, and have to be within 20 minutes of the shop. It takes time to simply get the ladders unstrapped from the truck and leaned against the house. Telling people half a day is, in my opinion, completely unachievable, except for a very small (two panel?) system that has UF wire connecting it to a breaker. (UF wire for 20 years outside?)

A: We know how much work goes in to a conventional PV installation. There are ways, however, to cut the installation time dramatically using clever design, standardized components and lifting equipment.

The half-day install is for small systems (2kW and the like). Larger systems will take longer. At the size most customers will require – 4 and 5 KWp, we expect that the installation time will be a full day. We allow for this in our business models.

Sales Training

Q: The CitizenRe site indicates that the sales people need to go through training before selling, as do the installers. All well and good, however, the sales people that we've spoken with do not, basically, know a thing about PV. Shading analysis? Building permits? Bill analysis? Nothing. Just sign up now and we’ll get you solar in September. How is CitizenRe going to correct this?

A: The first roll-out of the marketing plan is a pilot. We have learned much from this.
All current and new sales people will undergo a much higher level of training. Many present sales people will drop out because of this.

We are just as committed to ensuring the survival of the solar industry as you. We understand the necessity for each of our associates to have a high level of core knowledge and will institute this requirement this month.

One point to note, nonetheless, is the different roles our sales and installation people have. Even when trained to the new standards, the independent sales associates are not expected to do a shading analysis or deal with building permits. Citizenre’s model anticipates that different types of customer interactions require different skills. The sales associates are adept at building customer relationships and explaining the product at a basic level. The nuts and bolts of the installations, however, will be left to the installers who have completed NABCEP training and certification, as a minimum.

For the customer, there will be on-going reality-checks with regards to delivery time and business plans. For example, we are integrating a new tool on our web site to predict actual site review and delivery times. Part of the training will be to help the customer understand the issues that may arise – even the risk that customers may not receive a system if all of our requirements are not met.

Q: The site also indicates that the sales strategy is pure MLM (multi-level marketing - think Amway). Yes, this marketing method can work, but it can also have a life of it's own and create major problems for customers in terms of fulfillment. How is CitizenRe going to avoid the problems inherent in this sales method? I saw that in a few states, sales people are prohibited from buying more than about $495 of "sales aids" in the first 6 months of their employment. How much does the average sales person outside of these limiting states purchase in "sales aids" in the first six months? Is this a major revenue stream for CitizenRe at this point?

A: We prefer to call this “Direct Sales”. We do not emphasize the multi-level aspect (the purpose for signing up is to sell solar, not to enlist downstream sales reps), and are taking steps to make sure that the sales royalty stream is fair.

There is no cash contribution required from a sales rep – just time and a willingness to learn about solar electricity. We actively discourage sales reps from spending their own money for advertising (although a few are). We have several cooperative marketing agreements with non-profits and other companies to drive customers to us. These qualified leads are given to our associates to respond to – without charge. We have refrained from bringing this channel online and from starting our PR program at this point specifically because we know now that our sales team needs another level of training. We want to make certain that the first interaction customers have with the PV industry is a good one. As a last point, unlike MLM organizations, we ask for no money from our sales associates, and do not sell advertising or training materials.

Another way of putting this is that your grandmother could tell her friends about the possibility of solar electricity, and qualify leads. It’s the franchised installer who makes the final decision as to the viability of the site and system size.

A Threat to the Solar Industry?

Q: And the most fundamental question is, is CitizenRe out to put all other solar businesses out of business, since who will "buy" a system when they can just pay the electric bill at whatever level they are at?
($0.07 anyone?) Yes, we'll all be able to install for CitizenRe. Not the profitable business we've all been trying to build. Especially if we're only going to get paid for 1/2 day per job! But more importantly, if CitizenRe succeeds in stealing all the customers for the next 6 months, then fails, we'll have the double hit that many dealers will go under (no sales is bad for business) and then CitizenRe will not deliver (from what I see, highly probable). So here we are with one firm playing Russian Roulette with the entire industry, and perhaps the future of the US.

A: We understand very well that there is a great deal at stake here, and that Citizenre’s actions will have significant ripple effects for the industry and for the country.

We share the conviction that widespread solar implementation is an urgent part of the solution. It is not our intention to put the rest of the solar industry out of business—far from it. However, it IS our mission to change the trajectory of the solar and distributed generation industry. We plan to bring solar into the mainstream in a way that has never been possible before.

We understand that we are committing ourselves to a strategy that has some very big risks. Is it our intention to “play Russian roulette with the entire industry”? Of course not. Do we understand that competing against this strategy is going to be very difficult for the bulk of the existing industry? That it will inflict upon them the need to dramatically change their own business models in order to survive? Yes, we understand that. Yet we also know that the future landscape of the solar industry can’t be predicted with any certainty. In that sense, all of us – big companies and small, old and new – face the same challenge. We must all do the best we can to anticipate the future’s competitive challenges, and either adapt and survive, or fail in the attempt.

If Citizenre does not move ahead with its business plan, others will follow. The solar industry is about to change in very positive ways. There will not be a shortage of jobs – quite the contrary – there are opportunities in this business model for all of us, and many new people. We need people to handle logistics and distribution. We need a network of good installers ranging from large contracting firms in city areas to “one-person” shops in more remote areas. Our first PV plant alone will employ 1600 people.

Conclusion

Ok, that's a good start. Nothing hard to answer here, nothing that takes research on the part of the company. Just real hard questions that will tell us if there is anything behind the smoke. Thanks for your time in answering this Rob.

And thank you for asking. Now I would like to ask you a question:

Is it better to try for a quantum leap that results in PV power costing less than retail electricity? Or should we sit back doing business as usual, letting the government tell us they are supporting solar while they spend many times the annual SAI budget every week in Iraq.

Please give us a chance to move ahead and to succeed. There is a huge amount of effort that has gone into forming Citizenre.

It’s easy to attack a new idea, and to be fearful of the consequences of change. There are many in the industry who support us wholeheartedly and look forward to a time when PV has cost parity with other forms of electric generation.

There will be plenty or work for all of us. Solar Energy is abundant.

Dr. Robert Wills, P.E.
CTO, Citizenre

For your information, if you would like to understand more about our business plan, we would recommend beginning with the following documents:

“Solar Energy: from Perennial Promise to Competitive Alternative” (Greenpeace/KPMG)

“Financing Large-Scale Increases in PV Production Capacity through Innovative Risk Management Structures and Contracts” (REPP), and

“What the Solar Power Industry Can Learn from Google and Salesforce.com” (The Topline Strategy Group).

All are available on the web via Google search.

If you read about LifeWave, and Rob's 20,000,000 million a year sales projections on this transdermal energy patch, you will find similarities in his marketing techniques with CitizenRe. Lots of faith and very little questioning. Rob had a spiritual experience on the top of a mountain in South America after the Federal Government shut down the MLM company Equinox where he was a top ranking participant. What does Rob know about solar manufacturing and installation. Rob Wills former inverter company went bankrupt leaving a number of installers holding warranties on bad inverters which cost them time and money. Gregg is twenty-five, no college, no seeming previous experience in the solar industry. In fact, there is no one among the principals with ANY technical solar experience, and yet their Ecopreneurs are saying to potential customers, "Don't invest in solar now, we'll deliver Free Solar to you come September." There is no free lunch. A customer will continue to pay for energy forever. There is also a panel permanency clause in the California Solar Initiative Handbook. No moving of panels for ten years except for basically "Acts of God" or totally unforeseen emergency circumstances and then with 60 days notification and re-installation within the same utility territory within six months.

There is no factory, no installers, and yet they are putting out six page contracts as if they were a going concern. Their address is basically a mail drop in Delaware, not headquarters for a corporation with 650 million dollars in investor funds.

They are collecting names, and in some cases Social Security numbers, and it seems there is a religious fervor involved that requires blind faith. Blind faith and good business do not go together.

The person above asked for one centralized location for FAQ's. We have had this up for months for our customers: http://renu.citizenre.com/index.php?p=edu_faq

There is wealth of information on our website.

Please get your facts straight about Equinox. I left in 97. My book helped inspire a federal investigation and I was the lead witness against the company. They were shut down in 2000 and fined $50 million dollars for consumer fraud. I was just out of the Peace Corps when I joined them and when I rose to the top of that organization, I saw things that did not fit with the environmental mission I thought we were on. I walked away from a lot of money at a young age and made a stand against a $200 million dollar company.

I was young and naive and learned many lessons.

Let's please just deal with the facts of Citizenre. I realize that many of you will not believe our model until you have more information. I talked to one lady today who won't even believe us until we have panels on at least 1,000 homes--then she will be willing to reconsider. The onus is on us to deliver. We are asking for no money from the customer or from our Independent Ecopreneurs.

It is obvious that many of you are passionate about the solar industry. We feel that business as usual is not good enough any more.

When you see our financial backers, you will know that our model is valid. These people are not investing $650 million because they want to save the world, nor would they invest in some "mlm hype." MLM happens to be the best model to bring a new solution to the market that requires a lot of explanation. MLM is just one division of our company. We will also have a nationwide network of franchisees, a manufacturing plant that will employ 1,600 workers on three rotating shifts, and a commercial division. This is a big operation.

Please give us a few months to prove our model.

Thanks,

Rob

I had a hard time understanding that one at first, also. But the market for PV in Third World countries is stronger than here. The problem is, it is much more difficult to get financing for those projects.

We are technologically agnostic. If someone comes out with a better solution, we can plug that into our distribution model. Simple. Most customers will be happy with their original system because they are paying per kwh--and they will be paying equal or less than their current utility rates.

If someone wants their unit removed, we keep their security deposit and we can sell that system in the Third World to power villages or individual houses.

Thanks,

Rob

Cheap Solar Power Poised To Undercut Oil And Gas By Half

By Ambrose Evans- Pritchard
The Daily Telegraph
February 19, 2007

Within five years, solar power will be cheap enough to compete with carbon-generated electricity, even in Britain, Scandinavia or upper Siberia. In a decade, the cost may have fallen so dramatically that solar cells could undercut oil, gas, coal and nuclear power by up to half. Technology is leaping ahead of a stale political debate about fossil fuels.

Anil Sethi, the chief executive of the Swiss start-up company Flisom, says he looks forward to the day - not so far off - when entire cities in America and Europe generate their heating, lighting and air-conditioning needs from solar films on buildings with enough left over to feed a surplus back into the grid.

The secret? Mr Sethi lovingly cradles a piece of dark polymer foil, as thin a sheet of paper. It is 200 times lighter than the normal glass-based solar materials, which require expensive substrates and roof support. Indeed, it is so light it can be stuck to the sides of buildings.

Rather than being manufactured laboriously piece by piece, it can be mass-produced in cheap rolls like packaging - in any colour.

The "tipping point'' will arrive when the capital cost of solar power falls below $1 (51p) per watt, roughly the cost of carbon power. We are not there yet. The best options today vary from $3 to $4 per watt - down from $100 in the late 1970s.

Mr Sethi believes his product will cut the cost to 80 cents per watt within five years, and 50 cents in a decade.

I spoke to Citizenre recently regarding getting a solar system put on my house. I was concerned about the delay on the factory so I asked them if they would be willing to compromise. I would sign a contract and pay the deposit if they would put the infrastructure in place now. I would pay a small monthly rental fee on the wiring and grid tie inverter until the panels were in place. I am wondering if they will bite on this. I doubt it.

I already have a stand alone system on my house and if Citizenre went belly up, I could always use the infrastructure for a grid tie on my existing system.

However, I doubt they will go for my compromise.

I think y'all are missing something...in high sunshine states, the solar panels will generate more energy that the user will consume. Most of these states have laws on the books that require the local electirc company to "buy back" this excess energy at a fair market rate. Now if I owned the panels, Gulf Power, (here in Florida) would need to cut me a monthly check for the energy I am generating for them. (Excess energy by the way will flow back into the power lines). Since Citizenre would own these panels, THEY, not me the renter, would get the check from consumers. I would imagine that this is how they are balancing their bottom line.

I met some Citezenre marketers at a home show recently, and I am giving it serious thought, simply because I want to use solar but cannot afford the massive upfront costto purchase my own panels. However, one thing they want is a signed application for "consideration" when they go into production. The only reason I can see for this is they can present all these signed "consideration applications" as part of a business plan for start up loans or IPO, ("see we have 20,000 people dying to pay us...loan me $100 million please"). That part bothered me a little bit. Also, the application seemed a little unclear as to whether I would be locked into an contract, or if I was just asking to be considered.

The other thing that bothered me was the whole MLM thing. I know this is a cheap and easy way to get a company marketed without the owner having to invest a ton more advertising, etc....let your "distributors" do it for you. The problem is, in my experience MLM marketers, (from whatever company, be it Amway, Shaklee, whatever), are often misinformed or ill educated and therefore frequently misleading about their products.

Overall, I think the marketer I spoke with just didn't really give me enough information. Rather, he used big scary words about Global Warming, and cited massive cost increases in California, Michigan, rather than the hard economics to scare me into buying. I would still be paying the same amount to them that I now pay to Gulf Power. Meanwhile, they would be selling my excess power to Gulf Power and making a fortune. (this is the sunshine state after all). So what is in it for me? Not to sound crude, but if they really want this thing to work, they need to provide financial incentive, not just the good feeling you get from saving the planet. A suggestion would be to let me buy out the panels or retain ownership of them after a certain point so Gulf Power will eventually cut the check for me. Or better yet, have the Feds step in and go back to the tax credit that will allow individuals to write off the entire start up cost for alternative energy. Or have the Feds fund programs designed to make the start up costs affordable for the average homeowner. Make it financially appealing and the masses, (including me) will switch.

citizenre will cash in on carbon purchasing if they become a utility