While researchers have struggled for half a century to push down the cost of solar photovoltaic modules, an innovative web service is creating communities of customers who pay less for solar panels through collective bargaining with installers.
One Block Off the Grid collects groups of would-be solar purchasers in cities with good solar access and brokers a deal between them and a local installer. It's internet-based environmental organizing, and it appears to be working.
In a campaign running in San Diego, their customers will pay just $5.29 per watt of power capacity. Even after paying for an inverter to convert the DC power the panels generate into the AC power appliances use, the total One Block Off the Grid price is substantially lower than the San Diego County average. According to California Energy Commission statistics, the average total cost of a solar photovoltaic system is almost $8 per watt.
Now, they are launching a new tool that will provide instantaneous solar price estimates, the first online tool to do so. The new interface went live Sunday.
"The power of the internet has not been harnessed by the solar industry," said Brad Burton, who heads up products and strategy at 1BOG. "The components of viral growth and immediate person-to-person contact haven't been explored at all."
The Bay Area company Sungevity provides cost information via an online form, but they are ultimately parsed by a human being, so the quotes are not real-time. Sungevity's solar price estimator does allow for a lot more system customization, while One Block Off the Grid's setup is clearly designed for accessibility. Nonetheless, some questions in 1BOG's tool require some knowledge about your house, such as the material out of which your roof is made.
The ease of either system, though, is impressive relative to earlier methods of getting solar panels. Usually, getting a quote required that a contractor come to your house. Not only was that a hassle for homeowners, but it cost the solar installers money, too. Many people asked about solar but few ended up installing it. One Block Off the Grid participants are different, said Scott Gordon, whose company Helio Power worked with the company on the San Diego project.
"The leads from One Block Off the Grid are probably twice as good," Gordon said. "They have twice the close rate from the sales perspective of the leads you get from anywhere else."
1BOG's Burton claimed some of their installers are closing 25 percent of the leads that emanate from their company.
"We do eliminate a lot of their marketing costs and cost of acquisition and the other thing that we're able to do is verify the quality of the deal as an independent objective third party," he said.
The arrangement, all facilitated by the internet, helps squeeze some of the soft and difficult-to-quantify costs that help make distributed solar power more expensive than centralized fossil fuel-based electricity.
There are two big components to the cost of installing solar panels on a house. The one technologists talk about is the solar module itself, the hardware. Researchers can push that cost down by increasing the efficiency of the cells or using less or cheaper materials. Early solar cells were something like $200 a watt, not including installation costs. Now, the average solar module costs $4.34 per watt, according to SolarBuzz, a tracking service.
But all the other stuff that goes into putting that module at your house costs money, too. Solar people call this the "balance-of-system" cost and that's where One Block Off the Grid is making an impact. By creating volume for solar installers and doing some of the sales and marketing work, they can get those installers to offer lower prices to their customers. The net result is cheaper solar power, even if the technology doesn't shift at all.
"These costs do vary so it's hard to say how real the cost savings might be, but their story is credible," said Chris Marnay, who researches distributed energy systems at Lawrence Berkeley National Laboratory, in an e-mail to Wired.com.
Still, there's a ways to go. Analysts estimate that to be as cheap as electricity coming out of the socket and produced by fossil fuels, the total installed cost of a photovoltaic system would have to be $3.50 per watt.
To get there, the solar industry will have to change. Much like home building before the 1950s, solar installations are put in one by one. The personalized service might be nice, but it's a costly way of doing business.
After the war, major home building companies, like the iconic Levitt and Sons, rose to prominence. They standardized parts, equipment, procedures and marketing. It led to a lot of homes that looked the same, but were cheaper than anything that had been available before. Larger solar companies doing many, many installations would presumably benefit from similar economies of scale and push the total cost down.
Marnay said solar installing has been a cottage industry with many installers doing small amounts of business, but he expected that to change as solar installations grow.
Still, One Block Off the Grid isn't big enough yet to change the economics for a whole region or state. It has only facilitated about 500 solar installations since they were founded in summer of 2008, though the company plans to "really, really scale up our operation," Gordon said.
And that could be wise, too, because unlike most internet startups, One Block Off the Grid is already profitable.
Image: waynenf/Flickr
See Also:
- Ecosmackdown: Pets Versus Solar Panels
- Thin-Film Solar Startup Debuts With $4 Billion in Contracts
- Biggest Solar Deal Ever Announced — We're Talking Gigawatts
- How to Make a Solar Cell With Donuts and Tea
- Top 10 Utilities for Solar Power
- Utilities Jumping Into the Solar Game
WiSci 2.0: Alexis Madrigal's Twitter, Google Reader feed, and green tech history research site; Wired Science on Twitter and Facebook.**
