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Monday, November 8, 2010

The Sun Queen & the Wild West of Home Solar Power

Thinking of starting a home solar panel business? Then get ready to pack a pistol and think of the turbulent times of the old Wild West, says SunRun's Sun Queen, Lynn Jurich:
Although no longer small, SunRun still enters every new market as if it was a startup. "The rules aren't standard because it's a young industry, so I think of it a little like the Wild West," Jurich says.
As for a homeowner thinking of doing a deal with SunRun to install solar panels on the roof, the Sun Queen thinks its a financial no-brainer.
Lynn Jurich, the Sun Queen from SunRun
Why? Because the company, which started in 2007, has reshaped the traditional business model of the solar power industry by injecting an impressive dose of innovation into the business mix to the benefit of ordinary people who want to cut the costs of electricity in their homes.
Solar power provides less than 1% of U.S power generation, because of its cost.
During the recent recession, a choke-point developed in the home solar power market: although there are many solar panel manufacturers, getting the money to buy solar panels for your home was a tough task, with such systems costing between $25,000 and $45,000 per home.
Not many homeowners could or want to lay out so much upfront cash.
Enter companies like SunRun, whose business model was to step in between the manufacturers of solar panels and the homeowner. In essence, the SunRun model strips out the need for a homeowner to purchase the solar panels, and instead provides him with a service – the provision of electricity for an agreed period.
Buy some or all of your home power from us, SunRun says, and we will provide the solar panels, have them installed, monitor them with state of the art monitors, maintain them, replace any faulty parts, and do all this at a cost less than your utility charges you.
This business model of SunRun means that the company raises most of the finance to purchase the solar panels either as equity or as a loan, putting its own corporate credit on the line for its lenders, and takes on its own shoulders the risk that the homeowner will not make the agreed payments for the 10 or 15 or 20 years of the power purchase agreement (PPA).
Part of the reason for the lower costs to homeowners is that the solar panels get their energy from the sun, and do not need to have electricity moved to them over costly towers and power lines from a power plant located many miles away.
In some communities, groups of homeowners have come together to negotiate with companies such as SunRun, and achieve some economies of scale in the process.
Are the cost savings significant for homeowners? The cleantechies blog gives some idea:
Homeowners are cutting their electricity bills dramatically by going solar.  Let’s say you’re an average consumer of electricity in California, living in Fresno, paying $240 per month to Pacific Gas & Electric.  You can purchase solar electricity from solar power companies like SunRun for $120 per month, saving 50%. Unlike your utility that must adjust your bill every year depending on the input costs of the natural resources they use to generate electricity, solar electricity companies can fix your bill for years to come.
Sun Run's plan is to clean up the world's dependency on fuels, not just fossil fuels. The SunRun model offers Americans freedom:
Nat [Kreamer] and his team founded SunRun in January of 2007 with the belief that a new way of doing business can help pave the way to freedom – freedom from the “addiction to oil” and fossil fuels ...
And just how did the company come by the name of SunRun?
Unplggd: "One last question, Nat: How did you come to the name Sun Run?"
Nat: "Hehe, it was a cold, January day... and uh, we were actually in Brooklyn Heights, about as far from California sun and solar as you can be, and I said, gosh, you know... what do you think about Sun Run? We kind of tried it out and before you knew it, that's what it was... And it just sort of stuck! We wanted something that would be active... and we joke about it all the time... this all started in Brooklyn Heights!"
So, think about it: saving money while saving the earth.
Go solar!

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