Guest Post: CitizenRE: Not All That’s Renewable Is Green (Part 1 of 3)
Editor’s note: Today, we’re happy to bring you the first of what we hope will be many guest posts on the Green Options blog. Today’s guest post comes from our friends at Solar Kismet.
Most of us in the Green Blogosphere have followed new company Citizenrē, and its REnU program, with great interest. Mike has been analyzing the company at Solar Kismet, and we asked him to share his thoughts with our readers.
As Green Options launches new features and tools in the coming weeks, you’ll see that we’ll be involved in helping consumers consider their options for solar power. As such, we firmly believe that full transparency is necessary for the solar industry’s continued growth. This author’s thoughts and ideas are his own, and do not necessarily reflect those of Green Options, its management or staff.
Green products come in all shapes and sizes, with many varying claims about their content, performance and cost. Sometimes it’s hard to understand the nuances of something you don’t want to become an expert in - you just want it to be excited about your green choice and have it work. Renewable energy is no exception.
Renewable energy captures everyone’s imagination, much more so than its practical cousin, energy efficiency (those funny-looking lightbulbs really do work). But it’s hard to evaluate what the best renewable energy options are environmentally and economically. You can buy green electricity (but is that really helping anything?), you can install a solar system on your house (but it’s so expensive!), you can get more energy efficiency (so boring!), or you can have a solar system installed on your house for no money down and fix your electricity rates for the next 25 years (really?).
Did you catch that? “No money down” and “solar energy” aren’t two words that normally come together. But they have in the last two months and it’s caught the eye of thousands of people interested in selling and buying these systems. But what’s the catch? Exactly. Here’s a short lesson in “too good to be true”…
I should preface this by saying that I’m a skeptical person. I’m not going to be the one leading the masses with inspiration, so when I first heard of Citizenrē, a new solar energy company and their “no-money down” solar business model, small flags went up. I didn’t think too much of it at first. But when I started to get questions from multiple, non-related sources (consumers, industry, consultants, etc), I realized that Citizenrē had started to gain real marketing traction and decided to look into it a little more…
Citizenrē purportedly offered consumers the best of all solar energy worlds - a solar electric system on your home for no money down, no risk, and insurance against future electricity cost increases. Their goal was to install 100,000 solar systems per year on homes across America and they were recruiting salespeople from all over the internet, as well as pushing press releases, websites, and blogs touting their goals and promises everywhere. (Editor’s note: According to Renewable Energy Access, Citizenrē now plans to install 25,000 systems annually).
Here’s how Citizenrē’s model would theoretically work:
Interested consumers sign a contract with Citizenrē to have a solar system installed in exchange for a monthly solar system rental fee; reportedly, if you signed a 25 year contract, no deposit was required. Homeowners and businesses in more than 35 states would be eligible (those with net metering and a retail electric rate of 7 cents per kilowatt-hour or more). The monthly rental fee would be equal to the amount of electricity the solar system would produce annually multiplied by your cost of electricity (or even less). So instead of paying your electric company $100, you might pay them $50 and Citizenrē $50, if it offset 50% of your electricity use that month. Note that you haven’t saved any money at this point. Theoretically, you could pay Citizenrē a little less, say $45, if your Citizenrē rate was lower than your electricity rate. But the main benefit is that you lock in your electricity prices for the length of the contract and assuming electricity rates go up over time, you started to pocket the difference as personal profit.
A quick example:
- A 3 kilowatt solar electric system installed in Colorado might produce 4000 kilowatt-hours per year;
- If a home uses 8000 kilowatt-hours per year, it will offset 50% of your use;
- If your electricity rate was 9 cents per kilowatt-hour (cents/kWh) and you signed a contract with Citizenrē for the same amount, you pay each $360 per year (save nothing);
- If your electricity rate went up to 10 cents/kWh the next year, you would pay the utility company $400 and Citizenrē $360 (save $40);
- You can move your solar system once at no charge, or reassign the contract to the new homeowner.
What’s in it for Citizenrē? They take your monthly rental fee, the federal solar tax credits, accelerated business depreciation benefits, potentially lower costs from vertical business integration, and potentially the renewable energy credits (if legal).
I should stress that this business model in and of itself is not new. At least three companies (SunEdison, MMA Renewable Ventures, and Solar Power Partners) offer the same concept to companies or utilities installing large solar systems in limited markets where the incentives and policies align. And I suspect the concept will trickle out to more states and smaller solar systems over time. But not now and not Citizenrē.
Unfortunately, Citizenrē has put their marketing cart before their solar panel horse. They have built up a salesforce of thousands and pre-sold thousands of solar systems, but they have nothing to install for at least a year. Not one solar panel.
Next Time: If the business model isn’t new, why does Citizenrē raise so many flags? (part 2 of 3)
Tags: , citizenre, home, Solar
February 14th, 2007 at 1:30 am
There is no catch. I resourced the company and I"m not surprised that so many nasayers are attacking Citizenre. Especially their competitors who are shaking in their boots. Why did they not take proactive steps to start their own program. I don't understand the negativety in a movement where we are trying to help clean the planet. I never thought I would read an article on a green blog cut down any company who is trying to help the homeowner get on solar power. Time must be changing or I'm loosing sight of what this whole movement is all about , please help me understand. I signed up to get in line for a Renu system without a request for a security deposit or any money up front, I know these programs take time to work out the kinks. I don't expect to get a unit until sometimes in Late Nov or Dec. 07, or even in 2008. But I'm on the list to get one. I can't afford the $25,000 to $40,000 price tag like some greeny's . They have not made any promises to me and I don't expect any. Give them a chance to suceed or fail but just give them chance. Who else is taking a risk with a business model like Citizenre. Hello……
February 14th, 2007 at 2:14 am
2renu– No one's looking to "cut down" CitizenRE; rather, Mike is taking a hard look at the marketing efforts of the company in light of realities in the solar industry. I hope you'll come back for parts 2 & 3 — judging from the analysis Mike's presented on his own blog, they'll be thorough and based on the company's online marketing literature, as well as claims made by company associates. Many are afraid that if the company cannot meet its promises, this will tarnish the solar industry in general.
Thank you for taking the time to comment.
_______________________________________
Jeff McIntire-Strasburg
Senior Editor
Green Options
jeff@greenoptions.com
February 14th, 2007 at 7:21 am
Pleased to have discovered your exciting site, best wishes, The Artist
February 15th, 2007 at 3:58 pm
I have looked into these programs for my home use and since the concept is rather new I want to wait a bit and see what other people think. Any information is good information when looking into any contract. The idea is wonderful and I definitely want to try and help back companies that make it easier for the average person to go solar or live green but doing your homework and getting different perspectives is a great way to go before diving in.
February 17th, 2007 at 4:29 am
I wish I could tell you all the great things that are happening. A third state has declared war on the second state in order to get us to locate our 9th, 10th and 11th manufacturing plants there. So you can understand that for a number of reasons, we can't disclose anything about that, or even issue a press release simply making mention of this exciting scenario which is the cause of this latest delay because that would be too vague and people would think that we're simply making it up. I can assure you, however, that you will be very pleased. No one would invest $650M without having the highest confidence in our business plan, in which no contingency has not been anticipated and prepared for, such is the brilliance of our leadership. Well, except for the problem of bad stuff all over the Internet but we have a handle on that now. Just wait until you see the bios of all the great people who are flocking to join us! All of your questions will be answered very, very soon. In addition, we will be responding point by point to the analysis presented in that PDF file which don't worry was not created for us by a consultant. In fact, we can state categorically that we never hire consultants or do analyses, you have our word on that. As to the time frame of when REnU installations will begin, (that's REnU the solar system, not Renu the contact lens solution - all the trademarks will be securely in place before the factories are completed, trust us), we had been using September 2007, but with the emergence of a fourth state who just came to us and said that they would beat the other states' offers of tax incentives and throw in free labor to build the factories, to be provided by a different independent direct seller network, we realized that we could no longer reasonably make that looming deadline, and so now, look for engineering site reviews to being 9 months after we break wind, which should be in April. Finally, we have decided to put aside $15M to be paid out before we acquire any fixed assets whatsoever. Our part-time bookkeeper assures us that this can be capitalized as good will. Is this a great company or what!
February 17th, 2007 at 5:13 am
Good comment. I do not understand the hostile attitude that people are displaying towards CitizenRe. Give me a call sometime;
you sound like a greatperson who will have panels on your roof and you would be a great sales associate!
http://www.powur.com/yorkville
http://www.jointhesolution.com/yorkville
February 17th, 2007 at 5:19 am
This statement could not be any clearer than this. I have been looking closely at this company for months now and have registered to represent them. I have 28 years engineering experience and have always wanted a solar system on my home. My conclusion about this company is that they are legitimate and I am willing (and so are my customers) to wait for this young company to follow through on all of their promises. I can give you an honest assessment of this company. Please join in-become a customer or an associate on my team! I promise to make you successful at promoting this great "green" technology. I live in Yorkville IL and I am committed to converting all the roofs in my town from "black tar to blue polycrystalline"! Coming to a roof near you, CitizenRE!
http://www.powur.com/yorkvillehttp://www.jointhesolution.com/yorkville
February 17th, 2007 at 5:55 am
If any representatives of CitizenRE, REnU, Powur of CitizenRE, citizenre.com, citizenre.net, powur.com, or any other officially affiliated person would like an opportunity to do an interview for publication on GreenOptions, just send me an email: david [at] greenoptions [dot] com
I'm the CEO; I'll make it happen. And if CitizenRE is for real, here's your opportunity to answer the green community's questions about how it will deliver on its promises. I just got back from the Bay Area CSI solar Survivor Seminar, let me tell you, a lot of people are talking. Let's have an open dialogue. This vital industry deserves it.
…and by the sheer force of how many advocates of CitizenRE there are out there and the things that are being promised, failure to accept this invitation will look highly questionable.
Thanks for your time!
David Anderson, CEO, Green Options, LLC
February 18th, 2007 at 5:57 am
Howdy Phil,
Frank Knight here. If you are an associate… I do not know where you are getting your information! I have been with Citizenre since mid-Sept 2006 and am an Executive Sales Director with the Powur of Citizenre. Seems like I would have heard something about that. We did have a second state come in at the last with some offers to consider.
There have been no official Press Releases yet… being new, there are a lot of steps to take. As soon as we have our sales force properly trained you folks will be hearing a lot about us. We have a ramped up Training test coming this week and if folks are not well educated on our offering and are unable to pass the tests they will not represent.
Please realize there were a lot of renegade associates bought in before the training was up and there are still many at large making false statements. we are correcting this.
I will be happy to answer any questions that I have knowledge enough to answer.
Please Phil… study your material! Thank You. Frank
February 20th, 2007 at 2:58 am
Jeff,
What? No green love, on the day before Valentines day? I wish some people would lay off the haterade. Realistically, do rates go up by a cent? When I lived in Arizona, they jumped by about 20%, although it was the first rate increase by APS in years, it was a significant one. Why is it that people are so against this idea?
About the marketing cart coming before the horse, are you implying that because people are signing up to wait, it's not legit? Last time (3 months ago) I talked to a Toyota dealer about securing 4 hybrids for a company, he told me there was a 6 month to a year wait. Did Toyota put the cart before the horse as well, or will you be drinking some haterade in their honor in a blog in the coming months?
I wish that you would focus on what's right and what's positive with this movement instead of saying that it's not green or how it's not green.
Patrick Snider