by Jason Coughlin
What started out in a Portland, Oregon neighborhood as a way to buy solar at a discount has now spread across the US – and into the workplace.
This latest trend in solar, which has employees across the country opting in to collectively purchasing solar for their homes, is creating an exciting opportunity for solar companies. Installers selected through group-by-in programs can tap into aggregated groups of interested buyers and, in the process, reduce their customer acquisition and marketing costs, speed sales cycles and pass the savings on to customers.
This increased volume and velocity hold great potential for expanding installations workforces and growing local economies.
The solar industry is just one of the many beneficiaries of these employee purchasing programs. For employees of companies offering the benefit, group buying makes going solar easier and cheaper. Most programs have focused purchasing solar PV systems; a few have incorporated solar hot water systems and energy efficiency retrofits.
Program organizers – companies offering the benefit, or third-party administrators – set up the program and do most of the homework for participants. That includes soliciting installers through a rigorous RFP process, negotiating the group discount and either selecting the installer or advising an evaluation committee.
The programs remove both the cost and logistical barriers for participants. All they have to do is sign up, schedule a site visit and go solar.
There’s something in it for companies offering these programs, too. Collective solar-purchasing programs help organizations to not only support their employees, but also meet their social responsibility and sustainability goals.
The Solarize Concept
This group-buy concept for residential solar is called "Solarize." Supported by the US Department of Energy, Solarize helps groups of individuals band together to realize volume discounts from a program-selected solar installation contractor.
Starting as a grassroots movement in 2009, Solarize Portland campaigns revolutionized the market for PV, driving down prices by more than 30% and generating more than 50 permanent, local solar jobs. During the past three years, six Solarize Portland campaigns have resulted in a total installed capacity of 1.7 megawatts on 560 homes.
The Portland program attained such success that cities in Arizona, Colorado, Washington, Massachusetts, Vermont, California and other states have established their own programs to buy solar energy in bulk and share the savings among participants.
Residential group-buy programs for PV have led to homeowner savings on the order of 10-30%, thanks to both the competitive nature of the RFP selection process and the marketing and outreach savings accrued by the selected contractor. It’s no wonder then, that Solarize has moved beyond neighborhoods and into workplaces.
Here are a few examples, all implemented in 2012 and generally running for six months.
Solar Benefits Colorado
Spearheaded by the city of Denver through its membership in ICLEI – Local Governments for Sustainability USA – this program offered hassle-free solar at an impressive $3.90 per watt (a 15-20% discount from current market rates) to all Colorado local, state and federal employees, as well as employees of select contractors including the National Renewable Energy Lab and CH2M Hill.
During a five month campaign that covered four major metro areas (Denver/ Boulder, Fort Collins, Colorado Springs and Grand Junction), nearly 1100 participants indicated interest in beginning the process of buying or leasing solar.
The program easily surpassed its 600 kilowatt (kW) goal, with 119 participants installing 661 kW of solar.
It’s good to keep in mind that the rate at which the participants who sign up actually go on to install solar through Solarize programs still depends on some of the traditional factors affecting conversion rates. These include the suitability of individuals’ properties for solar, financing options and access to rebates.
Solar Benefits Tucson
This employee group-purchase program was implemented by the city of Tucson, Pima County, ICLEI and their program administrator, GroupEnergy.
Program organizers recruited some of Arizona’s largest employers to join: The University of Arizona, The University of Arizona Medical Center, Tucson Electric Power, Ventana Roche and the town of Oro Valley. All of these participants had sustainability or social responsibility goals in which they were trying to engage employees.
Solar Benefits Tucson provided that opportunity – and the program finished with more than 850 participants and nearly 100 contracts equaling 620 kW of residential solar.
Leadership Group SunShares
Together with program administrator GroupEnergy, the Silicon Valley Leadership Group’s SunShares team is working with 360 member companies (including Adobe, Genentech and eBay) to offer employees a tool that makes clean energy solutions simple and affordable.
Through SunShares, 800 employees in the San Francisco Bay Area have explored whether solar is right for their homes and budgets, resulting in the installation of 330 kW of residential solar.
Step-by-Step Solarize
Solarize campaigns follow a few basic steps, which are detailed in the Department of Energy’s Solarize Guidebook: A Community Guide to Collective Purchasing of Residential PV Systems.
Step 1A: Develop partnerships and initiate planning (months 1-3). Usually, the initial campaign involved the primary project manager (someone in HR or, more commonly, an employee from the company’s sustainability group), a volunteer coordinator (maybe a staff volunteer) and a technical support lead (an internal or external solar specialist).
These project players collaborate to build the project work plan and timeline, identify all the tasks, responsible parties and community partners. Potential community allies include the local American Solar Energy Society chapter, a local government agency or utility.
Step 1B: Build database and customer interface (months 1-3). The project organizer should provide a customer service database and protocols to the contractor, to track customer follow-up, schedule installations and capture project results. Some contractors may have their own software, but they should also update the database supplied by the program.
Step 2: Committee recruitment (months 1-2). One of the first tasks of the primary project manager is to recruit core committee members from the staff. These members should be organized into two groups, for outreach and for leading the RFP process.
Step 3: RFP Process (months 2-3). It is important for the RFP committee to have a clear method of scoring the proposals and to communicate this to the bidders.
Step 4: Outreach and education (months 4-6). Once the contractor is selected, outreach becomes the focus. Elements of an outreach campaign can include a program website on the company intranet, print materials, blogs and emails, and workshops for interested employees. A successful campaign will enlist the support of staff solar champions who already have solar on their homes.
Step 5: Employee enrollment (months 4-6). Kick off with a profile event for employees and continue outreach throughout enrollment.
Step 6: Site assessments (months 4-8). If all goes well, the customer and contractor sign a contract.
Step 7: Installations (months 5-9). The contractor is responsible for installations, but the project manager should monitor the customer database to ensure they occur within an appropriate time frame.
Step 8: Celebrate and reflect (month 9). Acknowlege the hard work of everyone who supported the program and celebrate the company-wide effort. Equally important is reflection and evaluation. Solicit feedback to improve future programs.
Strategies That Work
Assemble the right players. Find champions who hold key leadership positions within their organizations. These might include members of management and human resources who have the authority to move things forward and are committed to attending regular meetings or conference calls throughout the program.
Understand the barriers. The biggest obstacles participants face are high up-front costs, time and effort. Make the program affordable and convenient by negotiating a volume discount and offering participants financing options, which the PV companies should detail in their RFP responses.
Frame the program as a benefit. If you offer your Solarize program to employees, frame it as a benefit (rather than an obligation or expectation), emphasizing the rewards of solar energy. This approach allows you to reach participants through existing channels such as human resources websites and newsletters.
Overcome participant inertia. One f the biggest drivers of success for Solarize programs is a limited-time offer. When given a small window of time to decide whether to go solar, rather than waiting to see of rebates or pricing might improve in the near future, participants make their decisions more rapidly.
Invest most of your time in outreach. Market your program through a variety of media – presentations, webinars, websites, human resources bulletins, newsletters and fliers – to reach potential participants frequently, catch their attention and spur them to action. Make outreach easy for your partner organizations by creating all the materials for them.
Tips for Solar Installers
When you respond to a Solarize program RFP, understand that selection committees are looking for more than the lowest price. They will also consider quality of equipment and may have a preference for locally produced components when available. The more add-ons included in the price (such as animal deterrents) the better.
In addition, RFP committees want to find a well-established installer that can handle the customer volume these programs generate. And, depending on employee locations, committees might want to choose a well-diversified company operating in different markets.
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Jason Coughlin is a solar finance analyst at the National Renewable Energy Lab in Golden, CO.
This article first appeared in Solar Today, the magazine of the American Solar Energy Society.
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