So let's say this whole alternative-energy craze inspires you and me to rethink our energy consumption. Who can we call to help change our carbon-choked ways? At the moment, that's problematic. We'd need to find a mom-and-pop solar dealer or maybe a local electrician or construction guy who understands the nuances of solar, wind, bioenergy--even soy insulation. And that's the easy part. Opinions would vary as to how much energy we'd save and how much it should cost. The price might be $18,000. Or $80,000.
The disorder, and the huge dollars at stake, has attracted a slew of companies that want to do for the aspiring greenie what Home Depot did for do-it-yourselfers and contractors in the 1980s, when it consolidated a fragmented market of small paint shops, lumberyards, and hardware stores under one roof. The general idea: Call a toll-free number and a renewable-energy specialist walks you through the process, discussing the best technology options for your location.
The concept has huge potential. Solar is already a $15 billion business worldwide and growing 40% annually. Public concern over global warming, the environment, and rising electric bills as well as government tax credits and better technology are projected to drive that market as high as $75 billion by 2010. Hence the rush to grab share now. "There really isn't a national brand, so there's a tremendous opportunity," gushes Elon Musk, the former PayPal CEO who invested $10 million in Silicon Valley startup SolarCity. "This is bigger than the Internet." To get there, these upstarts propose creative solutions to some long-standing problems.
Keeping up with the Greens.
Historically, price, as much as the hassle, is what has slowed solar adoption. Many of the new enviro services facilitate rebates offered by local utilities and government subsidies, but SolarCity goes one step further, offering bulk discounts to buyers in the six California markets it serves. If a potential customer can rally enough neighbors to produce 175 kilowatts of solar power in the area (approximately 45 residences), they all save 30%. "People want to go green, but they won't do it if it costs them an arm and a leg," says SolarCity CEO Lyndon Rive. "Even the extreme environmentalists can't justify it."
Solar as a service.
Citizenrē, based in Wilmington, Delaware, plans to provide homeowners in 41 states with free solar equipment and installation, then bill monthly for usage, akin to how we consume cable TV. The company has attracted thousands of applicants and hopes to snare 100,000 by year's end. It then hopes to put its service in action in 2008. "It's incredibly ambitious," says David Anderson, CEO of Green Options, an environmental news site that has followed the online debate about the company's legitimacy. Citizenrē has yet to build its plant for manufacturing solar panels, leading many to believe that it can't succeed on the scale it's attempting.
In many locations, demand for alternative energy is outpacing the industry's ability to install the needed technologies and connect customers to electrical grids. To close that gap, NewPoint Energy Solutions, which currently serves Arizona, California, Colorado, New Mexico, and Texas, is working with Quanta Services to leverage the latter's 1,000-plus technicians in all 50 states that already check meters and roll the cords for electric utilities. "You just can't go out there and build a national company overnight," says John Berger, CEO of Standard Renewable Energy, NewPoint's parent company.
All green politics are local.
Ultimately, going national will require companies to negotiate an extremely local, crazy quilt of policies, incentives, and geographical quirks. "Whoever makes it simpler will win," says Pearce Hammond, a research vice president at Houston-based investment bank Simmons & Co.
SunTechnics Energy Systems' parent company, Conergy, has already done that once, building a $1 billion business manufacturing, installing, servicing, and financing solar, wind, and bioenergy systems in 24 countries worldwide. But it took 11 years and required an intensely localized approach. The company set up regional offices that operated fairly autonomously, and its executives worked closely with industry groups, local and national policy makers, and the established utility companies. "You have to be flexible to react," says Florian Edler, CEO of SunTechnics, who previously opened up markets for Conergy in Spain, Portugal, France, and Italy. He's replicating that model in the United States, with offices currently in California, Pennsylvania, New Jersey, and New Mexico, choosing the right solution depending on geographic needs.
It's going to require patience for SunTechnics or any other company to emerge as a genuine national renewable-energy brand. After all, it took Home Depot 15 years to become the first über home- improvement chain. In fact, the best strategy for taking solar (or wind, or whatever) big may be to engineer an acquisition by an established player looking to write its next act. Like, say, Home Depot. After all, the most renewable resource in business is a strong brand.
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