Photo: A view of the Mediterranean

Editor’s note: I started working on this post yesterday, and after writing and writing and writing, I realized it was turning into a David post While I heard a lot of interesting discussion yesterday, I’ll try to stick to an overview of main ideas and questions, and then respond to your comments and questions. Perhaps we can extend the symposium into our own space here…

This morning, I got to attend my first major session at the Papandreou Foundation’s Symi Symposium. Entitled "Energy in Flux: Safe Passage to a Future of Alternatives," the session consisted of three presentations on transitioning to a new energy future, and a lively debate over the challenges and opportunities created by the need to shift energy priorities in the face of global climate change.

Overall, I was delighted by the optimistic tone that ran throughout these presentations (which, in some cases, became points of contention in later open discussion): all three speakers acknowledged the enormity of the environmental challenges we face, and noted that combined efforts of the public and private sectors will be necessary to mobilize the larger public to action. In each presentation, the speaker focused on public involvement (in the roles of consumers and citizens), and made the case that an educated populace will provide the momentum for adoption of clean, renewable energy options. Let me just give a very brief overview of the main points offered by each speaker.

The first presentation focused on consumers’ roles in transitioning to a low-carbon energy infrastructure. Dr. Joseph Stanislaw noted that, traditionally, when we talk about energy, we talk about supply: where does it come from? He argued that a shift in mindset and language towards the services energy provides creates greater opportunity for transitioning towards more sustainable energy options. Consumers don’t want energy created from coal, or from solar power, for that matter: they want the services that reliable energy provides. By focusing on meeting this demand, we can address our contributions to climate change by implementing currently available technologies (particularly conservation technologies) while also working on the next generation of cleantech solutions. Consumers can be empowered to contribute to lower consumption by educating them on the "low hanging fruit" available: CFLs, for example. Finally, Stanislaw noted that the private sector is well ahead of the (US) government in recognizing these opportunities: he specifically discussed Wal-Mart’s sustainability efforts.

The second and third presentations both focused on engaging populations as citizens in transitioning towards cleaner energy technologies. The first, presented by James Fishkin of Stanford University of the two described experiments conducted by Texas utilities in "deliberative democracy": representative groups of customers were brought together in person, and through television, to discuss opportunities to purchase "green" power through their utilities. The sessions served to both educate the people gathered, and to listen to their concerns. These sessions produced amazing results: before these sessions, 52% of these consumers will willing to pay more for green energy; afterwards, 84% expressed willingness. The speaker noted the the increased prices don’t have to be much larger: even a $.25 addition to customers’ monthly bills would generate millions of dollars for increased renewable infrastructures. The success of the Texas experiment has led to other requests to hold such events: they’ve been repeated in Nebraska and Nova Scotia (with similar positive outcomes), and more will be held in Vermont, and as part of the next National Governor’s Association meeting. The third speaker, John Panarenos, provided the results of a similar effort in Europe: when asked, the representative samplingof citizens choose "energy and environment" as the most pressing issues facing the EU. The combination of terms was important — when the word "environment" was presented by itself, it didn’t receive nearly as high numbers.

As you might imagine, other symposium delegates had plenty of questions and even challenges for these speakers. A few points offered:

• The "small steps" position of the first presentation was challenged with the Chinese proverb "You can’t cross a ravine with small steps": ultimately, the enormity of these problems require much bigger responses.
• The market focus (which was not exclusive — he wasn’t arguing for "letting the market fix the problems") of the first speaker’s presentation was also questioned, with at least one respondent noting that we must focus on what scientists say is necessary, rather than what is possible in a consumer market.
• Several respondents also argued for more top-down regulation — in fact, that seemed to be a major point of debate: a focus on grassroots action (which is what I heard coming from these presentations) vs. government regulation.

Needless to say, this session was fascinating and provocative: as the first speaker noted, we can’t separate energy issues from climate change, so these kinds of discussions are necessary. I’ve just given the briefest of overviews here — feel free to offer comments or ask questions…

The evening sessions at the symposium are shorter and a bit less formal. Tuesday’s evening’s focused on a presentation by Kim Alter (Oxford University) on the concept of social entrepreneurship and social enterprise: the hybridizing of business and non-profit models into a unique endeavor that harnesses market forces in innovative ways to address social (and environmental) challenges. As with the morning session, the discussion was lively following the presentation. The concept of social enterprise as a distinct category, rather than another form of non-profit, was a major question for participants in the discussion.

Tomorrow: Excursion day…. with lots of photos from Paros and Antiparos….

Today’s guest post comes from our friends at Solar Kismet. You can find Part 1 of this series here.

The three most common reactions from many CitizenRE supporters when questioned about unrealistic goals is to:

1. Dismiss any questioning as being a solar industry conspiracy against the new competition. However, three other solar companies already offer a similar rental model, and you would be hard pressed to find any serious debate on their integrity.
2. Chastise the existing industry as having accomplished little and not having a real vision for the revolutionary ideas, even though the industry has grown at a rate of 40% annually over the last decade. Thousands of people work in the solar industry, many of whom have no vested financial interest in any one company, and a sizable portion are skeptical of CitizenRE’s claims.
3. Explain what CitizenRE isn’t rather than answering the substantive questions about what it is and can reasonably accomplish.

Ultimately, the skepticism of CitizenRE is founded in overstated plans that have relatively little supporting documentation, other than “trust us.” CitizenRE’s goals are ambitious to say the least:

• World’s Largest Solar Manufacturing Plant - Last June, Nanosolar (a company started in 2001 and backed by the Google founders) announced the construction of a 430 megawatt solar manufacturing facility, the world’s largest. Nanosolar’s new thin film technology was met with cautious optimism: as one industry insider put it, announcing and producing are two different things. CitizenRE states it intends to develop an even larger 500 megawatt solar manufacturing plant that will use a new combination of lower-quality silicon material. Originally slated to begin production in early 2007, the CitizenRE website now states a production goal of early 2008. In a recent interview, Sharp Solar, one of the world’s largest solar companies, indicated they have manufacturing lead times of 18-24 months under the best circumstances, which would further push CitizenRE’s new plant into 2009. The proposed plant is not on the radar of any solar news or industry analysts and CitizenRE has still not announced a location.
• New Solar Technology - CitizenRE’s new solar manufacturing plant will use a lower-purity silicon in the production of the solar panels, in hopes of lowering costs. All things being equal, this will result in a lower-efficiency solar panel. The new technology has no commercial track record. Furthermore, silicon supplies are tight, impacting multinational corporations like Sharp and Kyocera. CitizenRE will also need to deal with this tighter market.
• New Inverter Manufacturing Plant - Solar panels produce DC power, like batteries. Inverters convert the DC power into grid-compatible AC power. CitizenRE also intends to build their own inverter manufacturing plant.
• Third-Party Solar System Ownership - Three companies already offer “third-party ownership,” where a solar company owns and operates the solar system installed on a customer’s building. CitizenRE is similarly proposing to operate the third-party ownership model on residential homes, a scale over 200 times smaller. The also plan to do business in 30 or more states than existing companies currently operate. Industry analysts indicate that they cannot run any realistic scenarios where such a venture could be profitable.
• 100,000 Installations per Year - There are currently about 35,000 solar systems in the United States, with approximately 30,000 (PDF) of these coming in the last six years. CitizenRE originally had a stated goal of 100,000 installations per year, which has since been scaled back to a reported 25,000 per year.
• 2025 Vision - By 2025, CitizenRE has a vision to operate 25% of net electricity generation (presumably in the U.S.), 20% of peak capacity (also presumably in the U.S.), 330,000 megawatts of solar manufacturing capacity, and over 1 million megawatts of installed capacity. It is truly unclear how these are in the realm of reality. They will need to build 660 of their 500 megawatts plants in the next 18 years - that’s thirty-eight plants per year. And the first one has been delayed at least one year.

If any ONE of these things was announced by an unknown company, the idea would be met with serious skepticism. Frankly, if many of these things were announced by an established company, there would be skepticism. But the combination of industry-changing goals, all with serious learning curves, really brings into question CitizenRE’s basis of understanding. Could five established companies accomplish these goals, let alone one unknown?

CitizenRE’s business structure and start-up methodology also raise questions. As a multi-level marketing company, CitizenRE has recruited over 5,000 “ecopreneurs” who are not company employees, but rather associated with the company and will potentially receive a payment based on signing up other customers. Typically MLMs involve emotional sales pitches, sold from person to person, and can be associated with devolving into pyramid schemes, where a few top leaders make money by exploiting the lower ranks.

In CitizenRE’s case, money isn’t exchanging hands, which is frequently cited as a reason CitizenRE can’t be a scam. Instead, an equally powerful motivator is being used, one that drives the environmental movement: hope. CitizenRE is essentially promising THE energy, environmental and economic solution all rolled into one. It’s a powerful emotional driver that has resulted in the viral spread of CitizenRE’s ecopreneurs and potential customers, many of whom are no doubt one in the same, and whom may not understand the nuances of what they are selling or purchasing. Perhaps the promise of a future solar system is reason enough to participate, in leiu of immediate payment. Since ecopreneurs will ultimately be compensated (PDF) based on the number of systems they refer, misinformation and excessive hype has been the common marketing strategy. The company has since disapproved of such tactics, and ordered associates to stop using such tactics.

In addition to the sales force and resulting customers, CitizenRE will also need to train and recruit hundreds, if not thousands, of site inspectors and installers across the country. Not all homes will be suitable and every installation is unique, with the permitting and interconnecting process varying by each locality and electric company. Imagine trying to process 25,000 permits for a backyard deck, a common permitting request, in a few thousand cities. Now imagine doing so with a technology of which the inspectors are only vaguely aware. As permits delay things, installation quality will likely suffer in the name of making up speed and efficacy. And once the installation is complete, the system needs to be inspected for safety with the electric grid. Delays are inevitable at nearly every level of the sales and installation chain.

Ultimately, one wonders why they did it this way - marketing heavy and delivering lightly. Why not start building the manufacturing plant, which in order to raise money from investors or loans from banks, would have to show fiscal solvency in and of itself? Prove that idea. Why not start installing tens, and then hundreds of systems in the California first, the best market for solar systems, and build some industry experience and credibility? Prove that idea. Why not focus on doing one thing well before doing all things hypothetically? I am amazed at how far the hypothetical has taken this company.

Instead, CitizenRE has promised it all to everyone. There is basically nothing they haven’t decided they can do bigger and better than the existing solar industry, as if forging new paths is only a matter of an idea. But ideas are cheap and CitizenRE needs to hit grand slam after grand slam in order to come close to their vision. The shifting time frames and requests for patience have already started, and it is only a matter of time before various parts of the plan fall apart. The best businesses do one of two things - “promise and deliver” or “underpromise and overdeliver.” It’s kind of ironic that the industry is now abuzz about CitizenRE, a brand new company that hasn’t delivered anything…only promised.

Next Time: What effect might CitizenRE’s improbable success have on the industry? What about failure? (part 3 of 3)