Tasha Kosviner: Solar in New York City, huh? Many New Yorkers may be surprised to know solar is even practical here. I assume you and your team think differently?
Chris Neidl: We do! A lot of people, understandably, focus on the level of sunlight as the sole factor determining if solar will be viable in any given place. Then they look at our climate and think, hmm maybe not. We have winter, after all. But in reality, most places have adequate enough sun to make the technology work. Take Germany, for example, which has been the world leader in solar implementation for much of the last decade. Last year they had a two week period where 50% of all their electricity nationwide was provided by solar. And they have not quite the average sunlight of Seattle. So we are all good here as far as the sun is concerned.
The more important variable to focus on is really the local retail cost of electricity. With solar you are producing your own power and getting credit for excess power you send to the grid. The economic rationale for shifting to solar is therefore going to have a lot to do with what you’re paying for power. If you have cheap power, you have less of an incentive to switch. If your power is really expensive, then you have a really strong reason to switch. Here in New York City our residential electricity rates are among the most expensive in the entire country, about triple the national average. That’s the thing to really zero in on. Combining that with strong enabling policies, like net-metering, rebates and tax credits for adopters- which we now have in New York - and a growing awareness of the opportunity among the public creates a formula for explosive growth. It’s starting to happen right now.
And of course we have a ton of roof space.
TK: If conditions are so favorable, why isn’t everyone doing it already?
CN: In the last two years it’s really started to take off, but in a kind of splotchy, uneven way if you were to look at a map. Staten Island, some people are surprised to find out, has seen among the fastest residential solar growth in the U.S. in the last year. This is because of the big residential roofs that can be found there, the borough's immediate proximity to another very active solar market (New Jersey), and of course high electricity rates. But in many other parts of the city, the residential sector isn’t taking off as quickly. This is partly because there is a relatively low level of awareness. But more significantly, it’s because even when the awareness and the demand are there, there are a number of barriers for certain residential housing types that are prevalent in the five boroughs. For instance the permitting and inspection process is very onerous and uncertain, and it’s roughly the same for small projects as it is for large ones. So a lot of local solar installers, who are responsible for handling permits on behalf of the customer, often pass on small projects simply to avoid the headache and time that goes with seeing them through. Flat roofed row houses, one of the most predominant types of 1-2 family homes in the city, are particularly challenged in this regard. Installers look at them and think “small roof, big hassle. No thank you.” Or if they take them, they charge a very high premium.
With multi-family homes the challenge is very different. Often the roof is great and can accommodate a large system that an installer would love to install. But the task of convincing an entire shareholder base or just a board to decide to move forward is really, really tough to pull off, and rarely converts to a sale at this stage. And also the various tax credits that make solar more affordable are far more difficult to take advantage of in this context, making the prospects for a project even dimmer.
We also work with non-profit affordable housing providers, which face an entirely different challenge. They would love to offset their growing electricity bills with solar, but because they are non-profits they can’t directly take advantage of the different tax credits, so the paybacks aren’t as attractive.
So there is great potential across much of the city based on certain factors, but then there are very specific barriers that different segments of the residential market face that discourage adoption. Overcoming these barriers is really what Here Comes Solar is all about.
TK: In an earlier blog post you used the term ‘socially creative’ to describe solar technology. How can an energy technology be either social or creative, particularly one that just sits motionless on a roof all day, without making a sound?
CN: We believe that the key to knocking down some of the remaining barriers to solar in New York City and other big cities lies not only in the capacity of the solar industry to innovate, or the government to legislate, but also the ability of individuals and groups to collaborate and coordinate to come up with solutions themselves. This is one of the things about solar that is so potent and potentially revolutionary to me that often is downplayed: because it's so modular and has such a potentially wide application, many people not only have a strong motive to adopt it, but also have the ability to influence how it is deployed. Contrast that with conventional, centralized power infrastructure. A traditional power plant we cannot influence, change or engage with in any meaningful way beyond consuming the electrons (and enduring the pollutants) that it produces, and maybe protesting where it will be located. But solar is distributed in the hands of the 'consumer', and that’s hugely important not only from an infrastructure perspective, but from an innovation perspective. That means that we, people, can play a direct role in not only adopting solar, but also figuring out how to solve problems and barriers and reduce costs. This is particularly true given that most of what we pay for solar now is not related to 'hard' equipment costs, but rather to ‘soft costs’ embedded in the sales and implementation process. If you look closely at these costs, as we have in the context of New York, there are many things that the consumer and groups of consumers can take aim at in socially creative ways.
Social creativity can take many different forms right now, and HCS exists to help facilitate it in different ways. Most evident for our program at this early stage, homeowners can do two powerful things that make their projects more appealing to solar installers and therefore deserving of competitive pricing and excellent service. They can aggregate their purchasing power by forming groups, and they can educate themselves without the help of a solar sales person. Doing this alone pulls a lot of the cost out of the customer acquisition process for the installer. They can land multiple customers at once, and they don't have to do anything to make those customers say 'yes' to solar, because they already have before ever encountering the solar salesperson.
Also, because the members of HCS solar groups are all located right near each other, often on the same block, this can create additional cost-saving efficiencies for a solar installer during the contract period. For example, it's possible, with groups, that at various stages of a project installers can make one trip to visit several customers all at once rather than several trips. That's not a trivial thing in the context of, let's say, brownstone Brooklyn where traffic and street parking are major hassles that add to cost. And groups are not just made up of some number of homes, but rather consist of interconnected human beings who can contribute in really interesting ways to make the experience better for all parties. For example, in any group of neighbors one might have a driveway or access to parking that can be used for the entire group. Installers love that. A group can agree to wait for everyone's permits to clear with the DOB and schedule their installations all at the same time. Installers really love that. And maybe one group member works from home or is retired, and therefore can hold the keys to other group members' homes so that installers can schedule city inspections on short notice. These all seem like little things, but in reality they add up and can really influence how installers look at and price projects.
And these kind of things - these group-based tactics - are just the beginning of the creative potential of solar and the ability of 'consumers' to actually produce solutions that materially change the solar process, the soft costs, etc. As we grow, we are incredibly excited to see how our members will interact with each other and create value through our web platform. How members at one stage of a process share experiences and ideas with others, peer-to-peer. How individuals who buy into a vision of a solar powered New York start to bring their own professional and creative skills, their ideas and their knowledge to bear on the challenges that homeowners face when trying to get a solar project done. We know that peer influence - simply talking to someone in a similar situation to you about what it was like to go solar - is the main driver of adoption of any innovation. This is backed up by a vast academic literature about all kinds of things. Solar is no different. We see our growing network as an engine for adoption, because it will reduce the barriers by which homeowners considering solar and homeowners who have already adopted solar can interact.
TK: Here Comes Solar’s approach for owner-occupied homes is an example of a solar group-purchasing model. Is it the same as the ‘Solarize’ model that’s taken off in many parts of the country, including here in New York State?
CN: There’s definitely a relationship and no doubt our approach would not exist without the prior experience of various solarize campaigns that we’ve had the benefit of studying and learning from. Solarize is a perfect example of solar’s social creativity in action. It all started when a group of proactive homeowners said “hey, what if we bundled together the collective purchasing power of a bunch of our neighbors who were interested in solar, and negotiated a better price for all of us as a group?” And it evolved from there, with different versions of that approach having now unfolded all over the world, including some truly fantastic examples throughout New York State. Solar One actually was one of the organizers of New York City’s only completed Solarize Campaign to date, Solarize Brooklyn.
We consider HCS’s Group Solar approach to be a family relative of the solarize model, and one that has been adapted to contend with some of the specific conditions of the NYC market place. In particular, we realized that unlike many other places where Solarize has really had an impact, a lot of the New York City residential market - especially flat roof row houses - is not very attractive to installers for reasons I mentioned. If that’s the case, then conventional solarize models just offer installers high volumes of something that they don’t really want. The value proposition for installers had to change, we had to make these projects attractive by taking away some of the stress, cost and uncertainty that causes installers to avoid small jobs.
We do this by fully educating homeowners on what it means to buy and own a solar system in New York City upfront, and fully pre-assessing their homes to determine viability before an installer is ever contacted. By doing this we wipe out a big part of the high customer acquisition cost for an installer. We also don’t do one big time-bound campaign, but rather have more of a pipeline approach that gives installers flexibility and the ability to participate when they want to. On an ongoing basis we facilitate the formation of small groups of 3-10 ready and able homeowners who all live in the same immediate neighborhood, sometimes on the very same block. These groups will post to our platform, SunBlock, on a regular basis, and a small group of local qualified installers then have two weeks to review detailed member reports, and prepare and upload a proposals to any groups that they find interesting. Then those groups have one or two weeks to decide which installer to go with. It's pretty simple and so far working very smoothly with great results. In the eyes of an installer, we believe small and confirmed groups are better than large groups of unconfirmed leads.
TK: "Here Comes Solar.” Is that a Beatles reference?
CN: People keep asking me that! It’s not, though I am a big fan of the Beatles. We liked it because we really believe that solar is going to be THE disruptive energy technology of the 21st century and that this phrase captures that sense of a major, impending shift. It's like some kind of giant force that's showing up in the city, and that will over time, possibly quite quickly, significantly transform how electricity is produced in New York and how we all relate to it. We thought the name evokes that sense of momentum, change and inevitability.
But it’s also a reference to a book by Clay Shirky called Here Comes Everybody: The Power of Organizing Without Organizations. As I said, we believe the key to really making solar scale up and to driving down costs in New York - and this goes back to what I mean by ‘socially creative’ - is enabling groups of adopters to overcome barriers and level costs by pooling their collective capacities, skills, knowledge and time. Shirky is one of today’s clearest thinkers about how networks of ‘amateurs’ can solve problems and create value in ways that conventional organizations and businesses cannot. He’s been a big influence, so the title is kind of a nod to that.
TK: People can become very geeky about things that they are very invested in – and then they become the kind of people who want to share that knowledge. Is that what you are hoping will happen with your groups here?
CN: Yes, absolutely. Through creating our groups, and giving members a presence on our website, we’re giving people a platform through which to communicate with each other people at different stages of the process who have learned a lot through participation in HCS or are seeking answers to questions. Over time the intention is that this will become less about us finding new groups and then answering the same questions over and over again, and more about groups forming more autonomously with some facilitation by HCS, and then sourcing the answers they need directly from a growing community that already exists.
TK: Ok, here’s the thing: I’ve got my solar panels, they’re generating power and saving me money. I’m happy. I’ve gone through the process which, even with your help and the support of my group, was still kind of a headache. What is it about Here Comes Solar that is going to keep me engaged and ‘giving back’ in the way you predict?
CN: Buying solar isn’t like buying a refrigerator. You’re buying something that’s novel and clean that connects you to and makes you part of a larger transformation. And – bonus! – it’s saving you money. Many people are very excited and even proud of being solar owners, and like to talk about it. That’s the dynamic that’s already driving adoption in the residential solar market: person-to-person word of mouth referrals. We want to build on this dynamic and direct it in a somewhat different way. We have already seen this force in action with our small group of existing members.
TK: Here Comes Solar is quite new, having really just launched just in February. Where do things stand right now in terms of the scale of your work, and what areas of the city are you working in?
CN: So far we have had three groups select installers through our platform, all in Brooklyn, and have another seven at different stages of formation. We are really happy with how things have unfolded so far, and have been taking it somewhat slow so we can tweak the approach as we go. We’ve learned a lot and the three contracted groups saw a great discount and, more importantly, had a great experience with our process. Now that we feel we’ve confirmed the basic assumptions that inspired the idea for the model, we can now really ramp up this summer! We have a lot left to figure out and will continue to change as we grow.
If you are a homeowner, co-op shareholder or condo owner interested in figuring out if solar is right for you and how you can get involved in HCS, the first step to take is to complete our short survey to let us know who you are. Once that's in you'll hear from us within 48 hours!