EnergySage is an online solar power platform that is designed to help consumers learn more about solar and get estimates for solar power systems. CEO Vikram Aggarwal generously answered some questions this week for this interview with CleanTechnica.
1. How does EnergySage help increase solar adoption rates 2 to 3 times greater than industry norms?
We’ve found that shoppers who use the EnergySage Marketplace are 2 to 3 times more likely to go solar than shoppers who don’t. We attribute higher adoption rates to the fact that we provide all the information about solar energy systems that one might need for each stage of the shopping process — research, comparison, and purchase — all in one place. You see this most pointedly when comparing quotes from different installers. Marketplace users can easily evaluate everything from the quality and type of solar panels that best suit them, to how much power they can expect to generate, all while taking into account the financial vehicle they want to use — a loan, lease, or purchase. In addition to having the critical, objective information they need all in one place, EnergySage provides multiple quotes — instantly. As a result, making a decision about going solar is easy!
2. Is the normal or typical way a consumer learns about solar, and makes a decision to buy a home solar system or not, in some ways not all that consumer friendly?
Solar is a complicated topic and a serious investment, and until EnergySage, consumers have not been able to access credible, objective information. It’s sort of like trying to buy a car blindfolded. The solar industry operates as what we call a “push market.” Typically, solar companies aggressively prospect consumers via cold calls, knock on their doors, and distribute flyers. The approach is very pushy, because installers are, of course, trying to sell their own product. Often, consumers end up with information that’s not entirely clear, they don’t know whether they are getting the best deal, and/or they don’t understand all of what they are potentially signing up for. It’s hard to navigate as a consumer in this push market.
The solar market is in the middle of a big transition from this traditional, aggressive style to a new, open one. EnergySage is transforming the industry into a “pull market,” where you don’t have deal with insistent sales people. We empower the consumer to drive the sales process, meaning that they get all the information they want, when they want it, and can make apples to apples comparisons. We apply the same approach that one takes when shopping for anything else — giving much-needed choice and transparency to solar.
3. How was the idea for EnergySage hatched, and what are its primary benefits for consumers?
I first saw operational solar panels in 2007 when evaluating an investment in solar companies for the financial firm I was working for. I was visiting a property in California, a huge house something like 4,000 square feet. Outside it was scorching hot, but inside, it was wonderfully air-conditioned, and I thought the place must be drawing so much power. But, when we went up on the roof, I could see that the whole house was running on solar panels! Energy production usually generates a lot of smoke and noise, but the solar system was so sleek and so quiet. Needless to say, my interest was piqued and I immediately began researching the technology. I discovered that the return on investment for a solar energy system was very attractive and getting more so every day.
I soon left the company I had been working for and started consulting with homeowners and commercial property owners to help them evaluate an investment in renewable energy and high-efficiency energy systems. We would use huge spreadsheets to house – in one place – all the information about the options for going solar. I thought, “what if there was a single resource where one could access personalized, yet objective information about going solar?” Some place where they could obtain really specific details for their situation, from the shading on their house and local installers, to local incentives and more. EnergySage was born from that desire to provide simple, transparent information about solar energy choices. Without EnergySage, comparison shopping for a solar energy system is so laborious that it’s nearly impossible.
4. How did you strike up a partnership with New York and why is that beneficial?
New York is one of the fastest growing markets for solar in the US. In 2014, New York had the seventh most new solar capacity added in the nation! It is also the first state to really think about how the energy industry is being transformed by distributed energy sources (like solar) and how society needs to change to accommodate that. The Reforming the Energy Vision (REV) initiative is rethinking the role of utilities in the energy production and movement process, how can they move smoothly into a role that is more focused on utilities being “caretakers” of the grid. The New York State Energy Research and Development Authority, NYSERDA, was looking for opportunities to support other structures that will help that transformation. We thought that having a specific portal for New Yorkers to use EnergySage would really complete the consumer side of the changing markets equation. If distributed energy sources are going to be the way that power is created in New York in the future, there has to be an easy way for people to create that distributed energy – that’s where we come in. We’ve made going solar simpler than buying a plane ticket.
5. What are you seeing in the solar power marketplace now that solar power systems are at their most affordable?
As solar energy systems have become more affordable, we’ve seen a big shift in demand for information on the part of those who want to adopt solar energy. Going solar has been like buying a car. Up until as recently as the 1980s, you had to go to a particular salesman to obtain information about one “product,” and if you want different information or a different product, you must go to another salesman. Today, people want to shop for solar like they shop for anything else, with easy access to information online and in one place where they can compare options in an apples-to-apples, transparent fashion. It’s all about being able to easily and quickly choose the best solar systems and financing options for them.
6. Do you think most people are aware of how affordable solar power systems currently are?
No, I don’t think people are aware of how affordable solar power systems are right now. Nationally, the return on investment is between 10 and 20 percent, but in New York, it’s around 15 to 20 percent; this means a system can pay for itself in five years. EnergySage recently conducted some analysis on data collected by NYSERDA on the cost of solar systems in New York and, from 2012 to 2015, the price of solar systems decreased, but the range of prices that people are paying to adopt solar increased!
This says to me that people have imperfect information, they know that going solar is an option for them now, but they don’t really know what a reasonable price is. There are also a number of very attractive financing options, loans, and leases, if buying a system upfront is not the right strategy for you. EnergySage is specifically designed to give shoppers all the information about how and why solar can be affordable for them. Shoppers who use the EnergySage marketplace save up to 20 percent on going solar than people who didn’t comparison shop.
7. The Investment Tax Credit very well may expire soon. Some believe if or when it does, the impact on home solar systems may be very severe. Others seem to have more a “wait and see” attitude. What is your view?
Extending the Investment Tax Credit (ITC) is crucial to helping a thriving industry grow. The solar industry has been a consistent job creator in the US market, and we don’t want that to change. But, we have to prepare for the possibility that it might not be renewed. Installers should still be able to earn good net margins if the ITC expires. Electricity prices are forecasted to increase around 3 to 6 percent annually. Prices for solar PV systems will have to drop about 20 percent to offer similar financial benefits to customers. Luckily, continuing declines in equipment costs through technological improvement, innovative approaches to lowering soft costs for installers (e.g. customer-acquisition costs) as well as increasing numbers of people adopting solar energy will protect and help stabilize installer margins over time.
There will, however, be a readjustment and it won’t be easy. If the ITC is not extended, we’ll see a hiccup in the market in 2017 and 2018 because artificial demand will force installers to increase capacity beyond what the market will really support. The industry will readjust though. In the more immediate term, we need an extension of the ITC to allow the energy market to continue its transition smoothly and adapt to the changes distributed power, like solar, are creating. In the longer term, one thing that will make the ITC unnecessary is bringing the costs of solar power systems down dramatically. This can, in part, be done by reducing installers’ soft costs – all the things that aren’t the system itself, such as permits, labor and marketing. There was a study in 2013 from the Rocky Mountain Institute that said 60 percent of the cost of a system was from soft costs. One of the biggest contributors to soft costs is customer acquisition. Installers in the EnergySage network save up to 50 percent on their customer acquisition costs because EnergySage users are well-informed and have all the information they need about going solar at their fingertips. With cost-cutting approaches like this, we won’t need the ITC, but we’re not there just yet.
8. Due to the public announcement about the Tesla energy storage products, interest in energy storage appears to have spiked very much. How encouraging to the solar power market is the growing energy storage industry and does EnergySage include information about using solar power to generate electricity that can be stored at home?
Tesla’s announcement of the Powerwall was very exciting and did indeed bring a lot of attention to the solar industry, but the technology behind solar energy storage has been around for a long time. When solar energy was first being developed it was used mainly in places that couldn’t be reached by the grid, so storage was essential! We’ve seen a number of companies start exploring the solar energy storage market recently. Of course, the more players in the market, the more affordable and accessible a technology will become. The entire energy market is shifting toward a more distributed model; reliable affordable solar storage is definitely the next step down that path, and like all things solar, you can find information about it on EnergySage. The great thing about an industry that is shifting so quickly is that huge changes, such as advancements in batteries, are always happening. In order to help people keep up with rapid progress and innovation, EnergySage has a team of solar advisors — real, live humans — who are available to assist a solar shopper in making sense of it all!
9. What is your road map for EnergySage over the next several years?
Over the next couple of years, EnergySage is going to be focusing on creating local partnerships, like the one we just launched in New York. We already operate nationally, but we’re focusing on strengthening our abilities to connect with specific communities countrywide. In the future, we’ll be extending the marketplace to other types of renewable energy and high-efficiency energy systems to help “open up” those markets and make them more accessible for everyone.
Image Credit: EnergySage