Need for Capital in the Solar Industry
By Phil Narodick
Originally published on Mosaic
In the past few years, the solar industry has been suffering from a lack of capital on both the equity and debt fronts. Despite remarkably high rates of return, tax equity investment still only amounts to around $4 billion per year -- roughly 0.2% of its potential in the United States based on total individual and corporate tax appetite. Similarly, while lenders have provided capital for utility scale solar, debt financing for residential PV remains at very low levels. Bloomberg New Energy finance predicts that maintaining US solar deployment growth will require substantially more investment: roughly $6.9 billion annually through 2020.
This shortage has affected both the liquidity and cost of capital in the solar industry, which in turn raises the cost of photovoltaic systems. Some sources estimate that financing costs drive up the cost of a solar project’s electricity by as much as 50%. Additionally, lack of access to financing has caused bottlenecks for the deployment of residential systems -- SolarCity states in their S-1 that in 2008 and 2009 their customers encountered a substantial waiting list for financing.
One way of facilitating the flow of capital to the residential solar industry would be to increase the number of investors. Currently around a 16 financial institutions -- and seven in particular -- make up the majority of investment in the residential solar industry. In order for the United States to truly transition away from a fossil fuel economy, this number needs to increase by at least an order of magnitude.
This transition will not happen without making it easier for individuals to invest in systems. Individual investment is straightforward in many European markets, but not in the U.S. As I wrote in my post on Master-Limited Partnerships, United States tax structure actually makes individual investment in fossil fuels energy projects much easier than renewable ones. Adjusting the tax code to allow for solar Master-Limited Partnerships would dramatically level the playing field -- some forecasts predict the increase in capital available to be several billion by 2020. There is already a bill in congress, called the Master Limited Partnership Parity Act, that aims to make this adjustment.
In the meantime, Mosaic is launching an innovative model that uses crowdfunding to finance solar projects, opening up new capital from everyday Americans and greatly increasing the number of potential investors for a PV system. Mosaic pairs rooftop solar projects with a portfolio of investors, creating the opportunity for individual, long-term investments in U.S. clean energy infrastructure.
About Phil Narodick
Phil Narodick is a cleantech enthusiast and former founder of Solar Pathway, a startup working on creating a market for community supported solar arrays. He has worked as a project finance analyst for Solar Trust of America and has a background in energy consulting. In addition to being an evangelist of innovative solar finance and impact investing, he holds both a Master’s and a Bachelor’s degree from Stanford University.
Disclaimer: Any opinions expressed herein by persons not affiliated with Mosaic reflect the judgment of the author and not necessarily that of Mosaic. Nothing herein shall constitute or be construed as an offering of securities, or as investment advice or recommendations by Mosaic. Mosaic's investments are limited to investors who meet applicable suitability standards based on income, net assets and state of residence. Please click here to learn more.
4 Free Ways To Get Your Message Out About Solar
By Carter Lavin
Originally published on Solar Power World
We all understand how tight margins are in the intensely competitive solar installation market, and reaching consumers is not easy. But just because you don’t have the budget for a canvassing team, ad campaign, or big sponsorships doesn’t mean that there aren’t effective and affordable marketing campaigns you can launch. Here are five ways to market effectively to your community — and they won’t cost you a dime.
1. Social Media
Your customers and local media members are on Twitter and Facebook, so you should be, too. Use these channels to show off past and current projects, update your audience on developments at your company and engage with your elected officials. By maintaining an active presence on Twitter and Facebook, you can engage in broader community discussions and present your message conversationally. But always remember this cardinal rule: Social media is supposed to be social. If you just talk about yourself or post infrequently, you are wasting your time.
2. Letters To The Editors
As a professional solar installer, you have the ability to comment on a host of stories that appear in your local papers/websites — energy, utilities, government involvement in the private sector, local businesses, new industries in the area — or even extreme weather. You should have someone in your office who dedicates an hour or so a day scanning local newspapers and websites. When you see stories on any of those issues, it’s time to spring into action.
Write a few sentences about what you and your company have to offer on the subject and then send it in to your local paper as a letter to the editor. Just make sure it is not too sales-y or they won’t print it. Letters to the editor are typically around 150-300 words and the guidelines usually appear on the page itself. If they aren’t listed- call and ask). Be sure to include your name, company name and, most importantly, your phone number. Most reputable news outlets won’t print a letter-to-the-editor without confirming who wrote it, so the phone number may be the most important part of what you send them.
This kind of involvement will raise your company’s visibility in the local press, but it will also help your rankings in online search results if it’s posted online.
3. Open Houses
Just as going out into the community can help raise the profile of your company, inviting them to a project site, or the home of a satisfied customer is an excellent way to educate potential customers in a low-pressure environment. This is also a great photo op for a local politician so make sure you invite them. And if the local press know a politician will be making an appearance, there is a good chance they’ll send a reporter. So now your event is educating attendees and is in the papers.
4. Turn Referrals Into A Competition
People love competing and getting rewarded for completing an objective. Many solar installers already have a referral program set up which is a good way to speed up the word of mouth about your company. Kick it into high gear by allowing people to opt in to a gamified referral program. Come up with non-monetary prizes to give to referrers and rank the top ones publicly. The more fun you make your referral program, the more likely people are to use it — and the more business it will bring your way.
Carter Lavin is The Solar Marketing Group’s Business Development Manager and helps renewable energy companies analyze the market, articulate their message, and connect with their targeted audience to achieve their marketing/communications goals.
Third-Party-Owned Solar Generated More than $900 Million for California in 2012
PV Solar Report and Sunrun Announce Third-Party-Owned Solar Generated More than $900 Million for California in 2012
75% of home solar in top cities is third-party-owned
SAN FRANCISCO – February 13, 2013 – PV Solar Report, an authority on solar market data, and Sunrun, the nation's leading home solar company, today announced that third-party-owned solar delivered more than $938 million to the California economy in 2012. The single-year record means that California third-party-owned solar generated about the same amount in 12 months as in the previous five years combined. The third-party total represents 74% of the state’s 2012 home solar market.
An August 2012 report showed the business modeled had delivered $1 billion in growth for the state since it became a homeowner choice in 2007.
Also called solar power service, third-party-owned solar means a provider like Sunrun owns, maintains and insures solar panels on a homeowner's roof. Homeowners switch to solar without the high upfront cost, avoid the responsibilities of ownership, and save money on electricity bills. Sunrun pioneered the solar service model for home solar and is the market leader, installing $2 million in solar equipment every day.
“Nearly 75% of homeowners who went solar in 2012 chose third-party-owned, compared to 56% in 2011,” said Stephen Torres, founder and managing director of PV Solar Report. “We are seeing the most growth in low and median-income zip codes as companies like Sunrun continue to remove the barriers to access.”
As part of the 2012 analysis, Sunrun and PV Solar Report announced California’s Top Solar Cities for 2012 based on solar system contracts sold. Third-party-owned solar represented 75% of the 2012 home solar market among these cities. The state leaders for 2012 in order of total home solar contract value are:
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1) San Diego 2) San Jose 3) Bakersfield 4) Los Angeles 5) Fresno 6) San Francisco 7) Corona 8) Murrieta 9) Clovis 10) Temecula |
“Solar service is bringing solar to more American families not only because it eliminates the upfront cost, but also because it removes the hassles of ownership,” said Sunrun co-CEO Lynn Jurich. “Homeowners feel the impact of a tight economy and are looking for ways to own less in order to save more money. Our business model meets those needs, plus it helps the planet.”
The $938 million from third-party-owned solar for 2012 went directly to California local businesses and communities while helping homeowners of all income levels switch to solar. Two-thirds of home solar installations are now occurring in low and median income neighborhoods, according to a July 2012 assessment from California Solar Initiative (CSI).
*Source: PV Solar Report analysis of California utility rebate data; growth numbers determined by totaling the contract value for each third-party-owned solar installation in the state.
About Sunrun
Sunrun is the nation’s leading home solar company and invented solar power service, a way for homeowners to go solar without the high upfront costs. Sunrun owns, insures, monitors and maintains the solar panels on a homeowner's roof, while families pay a low rate for clean energy and fix their electric costs for 20 years. Since Sunrun introduced solar power service in 2007, it has become the preferred way for consumers to go solar in the nation’s top solar markets. More than 30,000 homeowners in 10 states have chosen Sunrun, and the Company partners with over 30 leading local solar companies who together employ more than 3,000 workers. Sunrun has attracted enough capital to support the purchase of $1 billion in solar systems from investors including U.S. Bancorp and raised $145 million in venture capital from Accel Partners, Sequoia Capital, Foundation Capital, and Madrone Capital Partners. For more information visit: www.sunrunhome.com
About PV Solar Report
PV Solar Report is the leading authority on solar market data with the mission of providing relevant, timely and succinct information to busy solar professionals. PV Solar Report publishes a daily digest for busy solar professionals, in-depth quarterly reports of the California and New Jersey solar markets, and custom reports for solar company clients. PV Solar Report makes it easy for industry professionals to stay on top of the dynamic solar industry. For more information visit: www.pvsolarreport.com
Where the Sun Doesn't Shine
PV Solar Report Contributor
Rosana Francescato
The Internet was abuzz last Friday with some astounding news: Germany has more sun than the United States!
That’s as reported by Fox business reporter Shibani Joshi last week on Fox and Friends, in a statement she’s probably been regretting ever since.
The good news about this news is that it’s simply not true. In fact, Germany has solar resources comparable to those of Alaska, while our mainland is more akin to sunny Spain:
This image, from the National Renewable Energy Laboratory, is by now a familiar sight to anyone who knows anything about solar -- a group that clearly doesn’t include Fox and Friends.
The same week, another Fox story also concluded that solar is on the decline. Why? Well, it’s clearly because solar is affordable only when the government “throws” billions in subsidies at it, which are now “being slashed.” At the same time, homeowners have been snapping up solar because of an influx of cheap panels from China. So, let me get this straight: The problem is that solar is not affordable without subsidies -- and also that it's so affordable that people are buying it in droves. There must be logic in there somewhere … right?
What these stories really tell us
What’s really on the decline is not solar. It’s a couple other things -- and one of those is Fox News itself. A recent poll shows that the network’s credibility is at an all-time low, though that’s still not low enough when you consider how many people continue to absorb its misinformation. And while other media outlets may not be as laughably off-base as Fox (which some are now comparing to The Onion), the American public is not getting an accurate picture when it comes to solar.
What’s more significant, though, is that fossil fuels are on a slow but steady decline. Last year, even a major coal company admitted that it’s only a matter of time till we move away from them -- and that this is the right move to make.
But most in the fossil fuel industry are not so upfront. When people in power see that they’re losing their power (pun intended), they can get desperate. And that’s the real story behind these Fox stories.
The article on declining subsidies becomes less baffling when you look at its focus on utilities. As more people generate their own power, utilities are concerned they’ll lose money. That fear leads to all kinds of misrepresentations. And the same fear has gripped the fossil fuel industry.
Joshi’s outrageous claim on Fox and Friends got so much attention that it overshadowed the many times in the short segment she and co-host Steve Doocy touted “nat gas.” Doocy even went so far as to say, “That’s what we really have a lot of.”
I have news for Doocy: What we “really have a lot of” is sun. In fact, every day enough sun falls on the United States to more than power us for 10 years. Coal, oil, and gas combined can’t come close to matching that:
But Fox, like other news organizations, is beholden to the fossil fuel industry. So they cling staunchly to the belief that the industry will prevail, against all odds. And that’s what they report.
Getting beyond misinformation
The sad thing about all this is that it perpetuates the impression that renewable energy is a partisan issue. In fact, 92% of Americans support developing more solar, and a majority want the government to support solar with subsidies and incentives. George Shultz is a major proponent of renewables; the Department of Defense is one of solar’s biggest adopters. Just visit Germany, and you’ll be struck by the fact that there, you can’t guess anyone’s political leanings by whether they have solar panels on their roof.
That’s as it should be. The truth is, solar is just getting started -- in a big way. You could even say solar is booming. And given that it’s so abundant and confers so many benefits, solar power isn’t going away, no matter how much Fox News wants it to.
I hope their recent gaffes will make Fox News reconsider the way they report on solar power. I won’t hold my breath for that, but I predict it won’t be long till we see an overall shift in media representation of solar -- at least, when it comes to the more trusted media sources.
In the meantime, I’m off to plan a vacation -- to sunny Germany!
Integrated Back-Up Servicing for Solar Companies
First Associates Loan Servicing, LLC Announces Integrated Back-Up Servicing for Solar Companies
- Integrated Back-up Servicing includes both nationwide Operations & Maintenance and Loan/Lease Servicing -
SAN DIEGO- February 5, 2013- First Associates Loan Servicing, one of the country’s fastest growing consumer loan/lease servicers, announces integrated Back-up Servicing for solar portfolios. This break-through package provides both nationwide Operations & Maintenance and Loan/Lease Servicing.
“First Associates has become a key partner for many solar companies by innovating within the space and providing a breadth and quality of service that didn’t exist in the industry,” said David Johnson, CEO of First Associates Loan Servicing. “Our integrated Back-up Servicing allows Solar Companies to more effectively raise investment funds by addressing a key concern of both rating agencies and institutional investors.”
Already one of the leading providers of portfolio back-up solutions for banks and other financial institutions, First Associates has partnered with a global solar equipment and services provider to create a back-up solution that includes an operations & maintenance component backed by a fully operational renewable operations center and nationwide network of field support facilities.
Back-up servicing is an integral part of the financial industry landscape. While traditional back-up servicing has only dealt with financial operations, the emergence of the solar financial industry has led rating agencies and institutional investors to look for specialized solutions that encompass the physical operations of the portfolio as well. By offering a complete back-up servicing package, First Associates can offer its’ clients the extra security that they could not always count on with financial backup servicing alone.
About First Associates Loan Servicing
First Associates is one of the nation’s premier consumer loan/lease servicing firms comprised of a team of professionals with world class experience, first-rate knowledge and exceptional technology. First Associates provides best-in-class servicing for titled assets, unsecured loan and lease portfolios with a staff that is committed to providing the highest level of service to borrowers while maximizing lender and investor returns. More information is available at www.1stassociates.com.