Los Angeles, California -- Jonathan Bass and CEO Lyndon Rive of Solar City spoke with Greentech Media at the largest solar show in the U.S., Solar Power International, on Wednesday afternoon.
The firm had some pretty big news this week, to go along with their pretty big Walmart/ MiaSole /First Solar announcement of last month.
They're not just a solar company anymore. They still finance, install and monitor residential solar roofs, but they've added a new piece to the business plan which makes them unique in this field: energy audits.
A few months ago, the VC-funded 700-employee company with the green truck fleet acquired Building Solutions, a software-enabled home energy audit firm.
SolarCity has taken that software and integrated it into their solar solution. The founders of SolarCity have a background in enterprise software and were attracted to Building Solutions because of the firm's software capabilities.
So now, for a limited time only, SolarCity is offering a home tune-up free with every solar lease or solar purchase in California through the end of November. Folks, that's a $2,000 value -- but you have to act now.
But wait, there's more...
The typical home loses a lot of energy through walls, windows and the attic. In fact, according to Bass, for every $100 spent in air heating and cooling, $40 is lost through air and duct leakage. SolarCity will visit the home and as part of the combined energy efficiency/solar audit will provide duct and attic sealing, some replacement lighting and in some cases, a programmable thermostat. The service is indeed free, for now, and the firm will elect to set up some type of pay-for-service business model after that.
According to Bass, energy efficiency has been more of an "eat your vegetables" activity in most people's perceptions. They understand that it's a virtuous pursuit, but it's just not much fun. But "when you can give somebody an opportunity to do the right thing and pay less for it," said Bass, and "when you can eliminate that upfront cost," that's a pretty straightforward value proposition.
It's also a comfort and safety issue -- sealing the attic improves air quality. And there's a $1500 energy efficiency tax credit at the federal level for certain energy efficiency measures.
Competitors in the energy efficiency space include Recurve and Energy Doctors.
SolarCity’s new efficiency services can reduce customers’ gas and electricity bills by an additional 10 percent to 50 percent on top of the savings they will see from the solar installation alone. A July 2009 study from McKinsey & Company suggests that energy efficiency improvements in the U.S. could generate more than $1.2 trillion in energy savings in the next ten years if they are enacted on a large-scale basis, but that upfront cost remains a primary barrier to consumer adoption. SolarCity might change the upfront cost for energy efficiency measures just as it did for solar arrays.
The home energy tune-up is a good idea -- but the winning business model for the energy efficiency side of SolarCity's business also needs to be tuned.