Solar-Energy Company Faces Skepticism

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A company called Citizenre says it can bring affordable solar energy to the mass market by year's end. It wants to build solar-energy systems on a large scale and lease them to customers. Industry insiders question the company's financial model.


On Mondays we talk about technology, and today, the technology of solar energy. For all its promise, solar energy is still just a tiny part of electrical power generated in the U.S. each year. A key reason: It's too expensive for most residential customers. But a new company called Citizenre says it's figured out a way to bring solar power to the masses by the end of this year. And it's already signing up thousands of prospective customers, as NPR's Jim Zarroli reports.

JIM ZARROLI: If you want to understand the way the solar power business operates today, you need to spend a little time with people like James Albert. Albert runs a company called ISI, which sells and installs solar power systems in the suburbs north of New York City. Today, he and two employees are in a customer's muddy backyard. They're attaching braces to some metal poles that hold up an enormous solar panel.

Mr. JAMES ALBERT (Runs ISI): You're going to have to raise this. Can you raise your end up?

Unidentified Man: Do you have a level?

ZARROLI: Albert sees solar energy as a way of helping reduce U.S. dependence on foreign oil.

Mr. ALBERT: The roots of this are definitely very personal at this point. And yes, it's not just about making money, it's about doing the right thing and help save the world at the same time. That doesn't hurt.

ZARROLI: Albert employs just nine people. As such, his company is typical of the kind of small businesses that make up the solar industry: lots of small entrepreneurs motivated as much by environmental concern as profit. John Coequyt, an energy policy specialist at Greenpeace, says residential solar power remains very much a niche operation. But Coequyt also believes that's going to change.

Mr. JOHN COEQUYT (Energy Policy Specialist, Greenpeace): Someone's going to come along and they're going to be a big national distributor and installer of solar. And when that happens, then we'll know that the industry has really arrived.

ZARROLI: Among the companies that hope to change the way the industry works is Massachusetts-based Citizenre. The company has an ambitious plan to manufacture, market and install photovoltaic - or PV cells - on a scale never seen before in the residential market.

Mr. DAVID GREGG (President, Citizenre): We're definitely here to help commercialize PV and to help bring it to the forefront, hopefully make it one of the major contributors to our energy mix.

ZARROLI: David Gregg is the company's president. As Gregg describes it, Citizenre would operate differently than most solar companies in the United States. Right now, homeowners who want solar energy have to purchase the systems themselves. Though these systems save money over time, they require a huge up-front investment, which discourages all but the most dedicated customers from buying them. Gregg says Citizenre will lease the systems to customers.

Mr. GREGG: We take on that investment risk for the customer and just ask the customer to rent the system on a basis that's equivalent or on par with their existing energy bill.

ZARROLI: Gregg says customers will be able to lock in rates for years at a time. The company thinks a lot of people will like that because energy rates have been going up so fast, and he hopes to sign up 100,000 customers by early next year. So where will Citizenre get so many solar panels, which are, after all, very expensive? The company says it will manufacture them itself at its own plant, which it will borrow $650 million to build.

Within the solar industry and the environmental movement, many people are skeptical that Citizenre's plans will succeed. Jeffrey Wolfe is CEO of the Vermont-based company groSolar.

Mr. JEFFREY WOLFE (CEO, groSolar): Everything we're uncovering says that Citizenre does not have the ability to manufacture the product, and they do not have the ability to put that product on roofs. And they don't have the ability to do either of those things at the prices they're quoting.

ZARROLI: Wolfe says Citizenre hasn't answered questions about who its investors are, where its new plant will be built or how it will navigate utility regulations and tax breaks, which vary wildly from state-to-state. And yet, Wolfe says, the company is signing up thousands of perspective customers and promising to deliver systems by the end of the year. Wolfe says a lot of Citizenre's customers will be disappointed and angry when they realize the company can't live up to its promises.

Mr. WOLFE: We believe that Citizenre is not going to be able to do that, and they will, in fact, damage the industry far, far more than they imagine.

ZARROLI: Citizenre's David Gregg admits the company has been slow to provide details about its plans because much of the information is proprietary. But he says it will do so very soon. Why is Citizenre rushing to sign up prospective customers even before construction of its plant has begun? Gregg says Citizenre expects a big pushback by utility companies who will feel threatened by its plans.

And having a large customer base will strengthen Citizenre's position with legislators. Gregg says many of his company's critics in the industry are small players that have simply become comfortable with the status quo. But he says if solar power is ever to live up to its promise, it needs to expand more quickly. That means somebody - whether it's Citizenre or another company all together - has to develop the kind of business model that will enable that to happen.

Jim Zarroli, NPR News, New York.

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