Do you want to own a solar panel in a farm far away?

6 Comments

Credit: WCNC-TV

Business model innovations have been crucial for the solar industry in recent years. Community solar — where people can buy into community and neighborhood solar panel projects — has emerged, as has crowdfunding, where people can buy into solar projects and make back money (or a return) on them.

Now a young startup from Boston called CloudSolar is taking a spin on these two concepts with a plan to build a solar panel farm and enable people to buy individual panels (or even parts of panels) of the farm through crowdfunding, no matter where they live. The group launched an Indiegogo campaign on Wednesday morning to test out the idea and raise money (a $300,000 goal) to build their first solar farm.

As the name suggests, the team is making the analogy with cloud computing and the practice of remotely accessing data and computing over a network. In that way, anyone who buys panels in CloudSolar’s farm can remotely view how much power the farm and their panel(s) are producing and how many carbon emissions are being offset, via a cell phone.

However, that basic analogy with cloud computing starts to break down beyond the name and the mobile monitoring. Owners of panels don’t actually tap into their solar energy (the way you would with a cloud-stored song or AWS computing), and the electricity from the farm is planned to be sold locally to power companies in the region.

In the solar world this remote practice isn’t all that unusual, and some large companies, like Apple, are taking this approach for some of their solar farms. In North Carolina, Apple sells the energy from its solar farms (two of which are miles from its data center there) to Duke Energy to put back onto the grid; Apple counts its data center in North Carolina (legitimately) as solar-powered.

The Topaz solar farm.

The Topaz solar farm.

The CloudSolar team says its first farm is planned for “the Northeast,” and if everything works as planned, other sites could be built in California, too. If they can raise their funds, the group says they’ll build the first solar farm next year.

Now that solar panels are at their cheapest time in history, business models — not necessarily technology — are crucial for the industry. The solar-as-a-service business model — which emerged in recent years pioneered by SunEdison and expanded by SolarCity — now dominates the residential solar industry in the U.S., enabling customers to pay for solar power in monthly increments over decades, instead of paying for the expensive upfront fee of installing the panels. This innovation has opened the door for solar for tens of thousands of home owners in the U.S.

Crowdfunding for solar, while still a very (very) small part of solar project financing, has inspired a wave of new democratized funding models from startups for solar. Because solar systems steadily generate energy over 30 or so years and that power is sold to someone (a homeowner or a power company), investors (and regular people) can invest money into installing a solar project and then can make back a small return on the energy sales each month. Startup Solar Mosaic has gotten a lot of attention for its solar crowdfunding platform.

Solar Farm in Tucson, Arizona. Image courtesy of IBM Research, Flickr Creative Commons.

Solar Farm in Tucson, Arizona. Image courtesy of IBM Research, Flickr Creative Commons.

Then there’s the more charitable-oriented solar project startups like SunFunder, which crowdfunds solar projects in developing off-grid communities where solar power can change lives like Tanzania and Uganda. Like with Solar Mosaic, someone who invests in SunFunder can earn back their money, but making money probably isn’t your main motivation for participating in SunFunder’s campaigns.

CloudSolar’s idea is an interesting tweak on all of these models: community, solar-as-a-service and crowdfunding. But beyond the early adopter market who likes trying out new things on Indiegogo and Kickstarter, I’m not exactly sure what the motivation will be for people to buy into a remote solar farm.

Since the solar farm is probably no where near the panel owner, the motivation of helping your direct neighborhood or community probably won’t be there (though, perhaps CloudSolar could create more of a virtual community). Because the solar panel(s) will be owned by you, there’s not really much of a charitable aspect involved.

The Topaz solar panel farm, that uses First Solar panels in CA.

The Topaz solar panel farm, that uses First Solar panels in CA.

And the money making capabilities at a small scale are pretty basic. For $250, you can buy a quarter of a 250 watt panel (about 62.5 watts), and over 25 years you’ll make back $562, in payments every three months; a half panel is $450 (125 watts) and you’ll make $1,125 over 25 years; an entire panel is being offered for $650 to $750 and over 25 years you’ll make $2,250.

Obviously, the more money you put in, the greater your return. There’s an option to own 15 solar panels for $9,000, and two out of the nine spots for that have already been taken. I could see investors that are clean energy fans opting for these options, but probably not the average person. CloudSolar makes money by taking 20 percent of the money generated from the solar power.

One of the more clear motivating factors for someone to participate in this is, frankly, guilt — or put in a nicer way, someone who is looking to offset their own grid energy or gasoline usage. Offsets are a little controversial because they’re always so complicated.

If you buy one solar panel it would offset the use of your iPhone for forever, or your laptop for over a decade, or driving thousands of miles in a Tesla car. But when it comes to offsetting the energy used by an average house? One panel only offsets the energy used by an average home by about seven months. So, unlike if you had solar panels on your roof or you bought into a community solar program through your utility, one panel isn’t gonna cover you.

6 Comments

CloudSolar team

Hi Tim Braun,

Thanks for your comments. CloudSolar’s business model is different with community solar farm. CloudSolar’s customer can put their solar panels on a land where CloudSolar owns or leases. CloudSolar provides a service to install and maintain customers’ solar panels on farm. Customer will not consume the electricity generated by their solar panels instead CloudSolar helps customers to sell their electricity locally. However, a customer of a community solar facility must live within the load zone of the participating utility, as you said.

Tim Braun

Ms. Fehrenbacher, an important note clarifying this proposed model. You write that it will “enable people to buy individual panels (or even parts of panels) of the farm through crowdfunding, no matter where they live.” This is not the case in most instances, and certainly not in Massachusetts. Here, a customer of a community solar facility must live within the load zone of the participating utility.

ishekhar

looks like a really great deal; esp the early bird special one; 1KW system for $2450 and if the ROI numbers are correct (9000 over 25 years), then its about 14.5%.
couldn’t resist but buy one.
excited and nervous :)

Enviro Equipment, Inc.

I think investing in a faraway community solar project is an excellent way for people to actively support renewable energy development in the way they can easily afford. If nothing else, it will help such person’s psyche by making them feel that they are “doing their part” to save the world.

Eric

My SW Colorado locale does not have community solar, my utility runs on coal, and I am unable to place PV at the home I rent. I used to have investments in MosaicSolar but they were refunded due to issues surrounding my residence outside of CA — I gather politics, not in my or Mosaic’s control.

So joining a community solar out of state interests me.

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