It looks like Citizenrē, the pie-in-sky solar-as-service provider that aspires to “silicon to service” vertical integration, now has some competition in the world of residential solar renters. Out of Minnesota comes another solar-as-service residential provider — Freener-g, which was just awarded $1.49 million from Xcel Energy as part of the utility’s renewable development fund.
How does Freener-g (pronounced “free energy”) compare to Citizenrē? For a start, Freener-g is focusing its efforts on being a downstream installer. Also, while Citizenrē has yet to make good on one of its 25,000-plus “signed” customers, Freener-g, Ruiz told us, has just finished wiring an eight-panel “pre-pilot” house that will be going online in Minneapolis as soon as the state inspectors give it the OK, which Ruiz hopes will happen next Monday. And in my book, eight panels is better than zero. (Update: Citizenrē has a few promotional installations showcasing residential solar, but they do not yet use Citizenrē solar equipment.)
Freener-g was founded in 2006 in conjunction with its application for Xcel Energy’s Renewable Development Fund. Freener-g is one of five power-generation projects for which Xcel has approved funds. According to the Xcel announcement, Freener-g will use the money “to demonstrate the commercial viability of providing solar-generated electricity for homes based on a leasing and service package of rooftop solar panels connected to the grid. The program will use 50 solar generating systems at 5.6 kilowatts each.” It’s scheduled to receive the funds in the summer of ’08, pending state approval.
All told, Ruiz estimates that those 50 home installations will have a capacity of 280 kilowatts and 355 megawatt hours of total production annually. Ruiz is offering straight-up equipment rental, a model he says he planned on before Citizenrē switched from their original power purchase agreement (PPA) plan. He’s currently conducting a survey on his web site to collect information on customers’ willingness to pay. The current estimate is $200 per month, but each system will have a slightly different rental rate.
Ruiz is also working to help get his “large Asian panel manufacturer” approved so he can distribute their panels in the U.S., which he says will help him source his panels very competitively. This is an important difference from Citizenrē, which says it plans to start building huge solar panel manufacturing plants in the U.S. sometime in 2008. While Citizenrē seems to be aiming for solar imperial largess, Freener-g’s modest aspirations look to prove Ruiz’s business model in the Twin Cities and see where it goes from there.
Ruiz is soft-spoken but passionate about his business. “I feel strongly about making a company that is going to be in business in 20 years,” he said. His is guided by three priorities, for which he gives equal weight — people, planet and profits — as he seeks what he calls “green-minded angel investors.” He stressed that, “What we do as a business needs to not only make money but be sustainable as well.”
So while Freener-g’s goals in residential solar rental are modest, they seem attainable, and with eight panels installed on a test home, the company has eight more panels installed than some of its competitors. There is a lot of room for growth in residential solar, especially outside the California market. SunPower CEO Tom Werner told us last week that “50 percent of the cost of a residential system is in the installation.” Will the key to pushing down installation costs be in PPAs or lease agreements? While PPAs have been pushing solar as a luxury home improvement, perhaps panel rental will be what brings solar to the masses. Amid so much solar hysteria, Freener-g offers a sensible business proposition that leverages the existing and growing solar supply chain instead of trying to rebuild it.