Originally published at ilsr.org.
The combination of falling prices and rising interest put rooftop solar on a strong trajectory. But even as solar goes mainstream, it’s tough for consumers to tell which installer, which panels, and which financing is right for them.
There has been little transparency in solar pricing, and consumers without technical expertise have a tough time shopping around. It’s a barrier to widespread solar adoption that gnaws at Vikram Aggarwal, and one he’s trying to fix through his online solar-shopping platform, EnergySage.
“The solar economics are so good that if you are a business owner today in America and you are not looking at solar, you are leaving good money on the table,” Aggarwal said. “In a number of states, if you’re a homeowner and you’re not considering solar, you are again leaving good money on the table.”
Aggarwal recently spoke with John Farrell, who heads the Energy Democracy Initiative at the Institute for Local Self-Reliance, about how EnergySage aims to change that mindset by giving consumers more power when they purchase solar. The idea behind EnergySage is twofold, Aggarwal said in the latest episode of the Local Energy Rules podcast: to empower consumers to shop around, and to deliver a suite of options they can understand and fully vet.
Jump-Starting Solar through Streamlined Shopping
The web-based platform acts as a clearinghouse that provides options for installers, materials, and financing — all by simply entering a ZIP code. Tilting the shopping process toward consumers is a pivotal step toward mass solar adoption, Aggarwal said.
“Solar is very, very similar to shopping for televisions or shopping for cars,” Aggarwal said. “If we can make it easy for consumers to really understand their options, do their research, get most of their questions answered without talking to a salesperson, we believe that the opportunity for this industry is much bigger.”
Building a consumer-centric solar shopping experience delivers benefits across the burgeoning industry, Aggarwal said. Enabling property owners to switch to solar ignites a mutually beneficial cycle: an easier process means more consumers, which triggers more business for installers, which triggers lower prices. In the process, communities grow their clean energy economies.
Each megawatt of solar power installed generates as many as eight jobs and $240,000 in economic activity.
Bigger Isn’t Always Better
EnergySage pre-screens all the contractors it offers up to users, and works with them to gather quotes and standardize them on a consumer-by-consumer basis. Based on user preferences, the site generates a comparison shopping list that remains a rarity in a fast-expanding solar market where installers — especially large ones — are locked in a bitter battle for market share.
But big-name installers fighting to outmuscle each other doesn’t add up to a truly competitive marketplace. The companies, rather than consumers, are setting the rules, and the prices. And until recently, they were doing it without much scrutiny.
A National Renewable Energy Laboratory study comparing solar installation prices showed that larger installers generally charged more for their services — about 10% more, on average. The trend runs counter to the conventional wisdom that bigger companies can offer better deals, the way they often claim to in other industries. In solar, however, hiring a big-name installer can add thousands of dollars to the bill for a typical rooftop array.
“Larger companies have spent a lot of money marketing and advertising solar,” Aggarwal said. “Their goal is to reach the consumer first and then convince the consumer that they are the big company and, because they are big, they’re offering a good deal and the consumer should pick them and purchase solar from them.”
Still, despite evidence of the opposite effect, some customers still prefer to go with a big-name provider, Aggarwal said. And EnergySage can still help them find the right company at a better price. But especially for consumers whose foray into solar depends heavily on cost, and for those who want to support their local clean energy economy, the site bridges a significant gap.
“The more quotes the consumer gets, the lower the price they are likely to pay,” he said. “When the installer knows that they are competing against two, three, four, five, six other vendors, they come with sharpened pencils and they end up offering lower prices.”
For customers looking beyond big-name companies, EnergySage can be a gateway to the local solar industry. The site details how far each company is located from a given user’s property, allowing them the opportunity to maximize the local benefits of their installation. At least half of the quotes generated for each customer are for contractors within 25 miles, Aggarwal said.
Indeed, the proven economic benefits of rooftop solar — including job creation — are amplified through local ownership and local contractors. Both ensure a greater portion of an individual’s energy spending stays within the community, a high-potential local economic engine as the economics of solar entice more consumers.
Beyond installation options, EnergySage offers an evaluation of available equipment, including the solar panels themselves and inverters. The company classifies them according to quality — is this one a Honda or a Mercedes, Aggarwal asks — to allow consumers to more easily grasp which product best suits them.
“Using this kind of information, again giving that kind of transparency about price and quality, consumers can decide whether the better quality deserves a higher price,” he said.
An Eye on Policy
The cost of installing solar, in a yearslong freefall, is a key contributor to rising solar adoption. But it’s far from the only factor at play. In order for consumers to capture the potential benefits of installing a rooftop array, the right policy must in be in place.
Net metering laws, which allow utility customers to offset their energy consumption with on-site solar power production, are on the books in the vast majority of states. These laws and other enabling legislation are essential to solar growth, but face consistent attacks from intransigent utilities and other fossil fuel proponents.
Going forward, battery technology will be another central driver of solar expansion. Like rooftop installations themselves, the price of storage is on the decline even as technology improves. EnergySage is dipping into the battery space, and finding that storage could be a helpful bridge where solar-specific policy falls short.
“I’m surprised by what kind of economics batteries can provide with or without net metering,” Aggarwal said, though he noted it’s not a surefire bet yet. “Net metering will be key until storage becomes an economically viable option for most consumers thinking about solar.”
Consumers’ Call to Action
Propelled by dual trends — more consumers looking into increasingly affordable solar, and more options for them in the marketplace — utilities are beginning to budge on business strategies that have historically favored fossil fuels and expensive infrastructure. Amid a global reconfiguration of the energy sector, and rising pressure from customers, forward-thinking utilities are warming up to renewables.
EnergySage is working with several utilities, Aggarwal said, to help them connect customers to solar and storage options. These power providers want to encourage customers to evaluate their options and make informed decisions about going solar, he said. At the same time, utilities are charting ways to cash in on the switch.
“Some of them are also now evaluating how they could monetize this transition to a renewable energy economy,” Aggarwal said. “We are very pleased to that transition and very glad to be working with some of the leading utilities in the country in helping them make this transition.”
Before long, they may not have a choice. Solar is cheaper and more common than ever, and consumers are increasingly tuned in to its economic and environmental benefits. As a result, it is fundamentally changing how Americans view and participate in the energy economy — and their expectations for doing so.
“Disruptive technologies … they shake up the incumbent industries,” Aggarwal said. “In our case, that could be the fossil fuel industry, whether that’s coal or natural gas, or the utility business models.”
Photo Credit: CoCreatr via Flickr (CC BY-SA 2.0).