Welcome to "Pirate Solar Power," a marketing plan designed to rapidly expand distributed Solar Photovoltaic (PV) power generation at the populist, residential level noted here and here. It turns on this: selling PV on a mass-commodity scale, a concept explored here. Mass commodity solar means selling it to "Joe Six Pack" (Joe), especially after subsidies dry up but prices fall far enough ($.36/watt by 2017) for the mass-consumer market to reach a tipping point and thus ignite a revolutionary surge in PV sales. (For more on the coming uptick, click here; for the projected 100 MW uptick in distributed solar in Georgia, click here).
The question is how to sell Solar PV to Joe, and thus trigger the demand creation the solar industry actually needs (rather than government hand-outs). First, recall the Personal Computer's (PC's) 3-stage sales history: (1) early adopter/hobbyist; (2) high-end business; then (3) commodity-scale (e.g., Wal-Mart) retailing, where tens of millions of units are sold to individual consumers. Solar PV is just now entering stage 2; big players like WalMart, Ikea and Apple have gone for it, others are following. But as this piece explains, solar's struggling at the stage-3 starting gate. This piece, by the way, tracks the huge, 2011-2013 jump in Solar PV for the residential market -- correlated with price drops and projected, unsubsidized demand increases.
What is the best way to push PV sales to stage 3, and thus sell PV to Joe, the average consumer, figuring into PV's mass-consumer, market take-off point? Answer: Make Solar PV make economic sense, which means that investing in it must pack a 7-year or less payback cycle, a point indicated by the latest pricing trend explained here.
Seven is the longest length of a car or truck note, and about the longest CD in which Joe will invest. He also must be convinced that he'll directly pocket the remaining 23 years of his PV array's electricity production tax-free.
That 7/23 pay-off number is very appealing to those earning less than 2% on their CD's and other "safe" investments. Solar PV can be shown to best that and add value to Joe's home (that appreciation can be counted to shorten the payback factor) plus accord Joe some psychic income (go green, help the environment). It can provide Joe with an acceptable rate of return.
But Joe won't invest in PV until it's installed cost is sub-$2/watt. Costs are falling to that within the next several years, as propelled by a thriving production cycle and this industry-wide price-lowering effort. That will enable a transition point to stage-3, as accelerated by prices no longer in need of subsidies (i.e., a real, free market). Vendors who think outside the box can help Joe get there sooner, rather than later, by drastically reducing three variably dispensable cost layers:
The bottom line, then is to throttle-up the DIY market for pole mounted or ground mounted Solar PV. Vendors are starting to grasp this concept right now (this, too). Ikea's now selling home solar packages in its U.K. stores. (Source).
Here's the sales slogan to get Joe's attention: "You Plug. It Pays."
Joe can plug into solar and let it pay him "meter gold." He can feel good about going green while furthering his own self-interest (cop "meter gold"). And his sense of environmental populism can be tapped: "A solar chicken in every pot." A solar array for every home or rental home that has capturable sunlight, especially on a back deck or in a back yard. Free wealth (free energy from the sun) distributed to millions of Joes financially incentivized to focus their PV optimization efforts. All that begets what millions optimizing PC/internet tech created: an upwardly cascading PV-tech-improvement cycle.
PV vendors thus should make these marketing points to Joe:
Here's how to make all of this happen: A plug-n-play backyard (or back deck, unused farm field, etc.) solar panel kit so cheap and easy to use that someone with basic homeowner skills (change out a broken light switch) can self-install it and hire specialty labor for the "hard" part (e.g., to connect the solar panels together, and the resulting solar array to the meter). And yes, it would be a pole mounted or ground mounted set of plug and play panels. "Home Depot" level free training and code-compliance channels should also be opened, as well as an independent, blue-chip warranty provider (too many panel makers crater, and the 30-year warranty obviously is vital to ensure that solar is a safe long-term investment, like a T-Bill).
PV vendors, in turn, should thus cooperatively contribute to an independent, blue chip warranty source (this, too) so Joe can feel more secure making a 30-year investment in a market fraught with memorably infamous bankruptcies (Solyndra, etc.) and exaggerated output claims.
Again, roof mounting's fine, but too often that represents an unacceptably high cost layer that knocks Joe out of the running (or even thinking about solar). It also knocks renters out of the game. Pole- and ground-mounting are cheaper, less dangerous, and are easier to unbolt and take to the next home, thus also appealing to renters (yes, the trenched ground line from the array to the meter box will be written off, but landlords will be incentivized to co-op on that cost because value is added to their property in the process -- for rent ads can list "plug-in-play solar" as a feature).
Rack manufacturers take note: Panels must snap or slide in and out of mounts so Joe can store the panels in his garage (hurricanes in coastal areas), and throw them in the moving truck when moving away. This is going in the right direction.
"Panel mobility" assists in generating another positive mindset -- equating solar panels to gold coins (they hold value for 30 years and produce electricity-wealth) that can be traded on the open market as people scale up and down and move away and don't want to cart their panels with them. You want Joe to think of solar panels as value-retaining, wealth generators, and you want to make them cheap enough that he'll install them even in back-deck and backyard areas that get less than optimum sun -- because his per-watt cost of doing so will still fit the 7/23 payback formula.
The bottom line works something like this: Joe would buy enough panels to unfold and snap into place in back-deck mounting brackets or on a mounting pole, then plug-n-play them into a nearby plug, or his meter (local utilities can be tapped to low-cost add, plug-n-play interfacing at Joe's meter, and perhaps spread that expense over his power bill). He'll shoot for enough panels to feed his home and run any excess into the power grid. He should be able to start small and add panels when he wants, and realize that self-consumption (hence, build only that big an array) "pays" him back at the full electricity retail rate. He does not need a full day of sun if his system is cheap enough; even a 4-hour solar day can be spreadsheeted to calculate a 7-year payback. Those with more sun can set up sooner, those with less later, as hardware prices fall far enough to meet the 7-year goal.
Hence, Joe could start out by buying enough panels to reverse, say, $50 of his $100 monthly power bill, and be happy at that. And because it's a plug-n-play, ground mount system, he can install it in a weekend, even in a rental home, and take it with him when he moves (trenched line and pole-mounting losses only, though that "asset" can up the home's value, so maybe no net loss there).
He may even be able to be spared permitting and private-covenant costs since he's not modifying his home (ditto for escaping landlord objections). He'd also spare himself the worry about penetrating his roof, or mounting an array over a roof that's going to have to be re-roofed in 5 or so years (the classic roof-installation dilemma).
Step back and appreciate the solar-vendor-installer market-generating power of the Do It Yourself (DIY) route. Solar PV is simply not working now for "Joe," but only for upper-middle and upper class folks (those who value tax credits) and the enviromental-crusader greenie types who don't really care about a short payback cycle (they are the stage-1, early adopters). Solar PV is stuck at stage-1 and stage-2 due to its unacceptable cost for Main Street (stage-3, mass commodity) level. That's a market that will dry up for Solar vendors and installers, who must cultivate a mass-commodity market to thrive -- so they must get Joe onboard.
But Joe simply won't buy unless it makes financial sense to him. It's got to be a money maker. The concepts explored here are aimed at that result. They turn on cost-reduction and thus, price accessibility, even after subsidies dry up, to reach the U.S. Government's $1/watt goal.
Note to savvy installers: DIY is your friend. You can profit by installing the tricky-wiring part of each job (millions of jobs, not just dozens here and there within stage-2). There will be many parts of the job that some Joes just don't want to do, such as snap-in retainer clips on the back walls of homes, or fast-mount poles and brackets on porches and in back-yards. And you can exploit constant Balance of System cost reductions.
Your pitch to Joe is this: "You can buy this kit for $_______ and hire me as casual labor for $_____ for that weekend, so that you get up, say, a 3 KW system for $_____ and it will, through spared electricity costs, pay for itself within 7 years." The blank numbers, once filled in, must be numbers Joe can quickly digest/confirm as fitting within the 7/23 paradigm.
Under this approach, Joe himself is installing his system and only hiring you as casual labor. Hence, the warranty, liability, workers' comp (etc.) expense layer of vending services through a formal corporate (or equivalent) structure is spared. Joe will look out for his own warranty issues (his panel-vendor selection) in the same way that he does so when he decides to buy an electric water heater at Home Depot and self-install it, or an HVAC system, etc.
Special Note to Solar Panel Makers: You must create a blue-chip level third party warranty insurer because no one has any faith that any current vendor will be around for 30 years -- hence, "GE Solar Warranty comes with every panel sold," or something like that, is an indispensable stage-3 market ingredient here. More on warranties here, here and here. And since Joe wants to reap the highest profit, he'll be encouraged to build no more than his 100% self-consumption warrants, a theme underscored here.
Both Panel Makers and Installers should think about this: You are now trying to sell an end product: an installed Solar PV system. But you are not creating any realistic, sustainable market share and thus not making any money, except from a subsidized upper-middle-class layer of buyers who will disappear when the subsidies (tax credits, etc.) expire, as one of them (Georgia's) predictably dried up almost instantly.
To make money you need buyers. Millions of them. Hence, Joe. But for installers, your cost of operating a conventional business, what with overhead (truck, tools, employee costs, insurance, taxes, worker's comp, etc.) and professional/product liability costs (in Georgia, for example, even if a vendor does not furnish a written warranty, a buyer can sue him for negligent installation), is too high. Joe will never hire you because you charge too much, in no small part due to the cost or running a formal business and complying with all the legal/bureaucratic requirements.
Approaching this from the perspective of fostering the DIY market and selling casual labor (for cash) is an outside-the-box meme. It's also the right approach because no one wants PV, not at >$2/watt pricing. And the only way to get it down below $2/watt and, even better, the $1/watt needed to make PV an inarguable 7-year (or less) payback investment, is to cut the above-noted cost layers and capture the $.89/watt current panel prices for tier-one equipment. That means pushing DIY, and with a pitch that is clear and simple like this.
Panel makers thus should work with BOS vendors and installers to open up the DIY market channel.
I am living proof that DIY works. I self-installed this system, in late September, 2010, for $35,000 (hence, $3.50/watt), thus $14,000 ($1.40/watt) after tax credits. With virtually no skills, I did it myself and paid $3000 for a pro to mount the inverters, drill the rack mounting holes, and do the wiring connections (he labeled the wires for me; I bolted the racks and panels together, unfurled the wires -- I did the "unskilled" labor, and he tied it all together at the end). My system makes/saves me $1000 year and added at least $5000 in value to my home, placing me in a 9-year payback cycle.
What's happened since 2010? Hardware prices have since fallen at least 20-30%, so now I can do that with a 7-year payback cycle.
Your customer, for that matter, must be sensitized to reaping a pay-back at the full retail KWH rate that he’s now paying. Plug in, say, $.13/KWH to his monthly consumption (750 KWH?) and spreadsheet it from there. I have never had a power bill; my home makes me money every month that I live in it.
You must get into Joe's mind that his “Pirate Solar Power” kit is a wealth generator, like a moonshine still or marijuana patch in the woods, only it’s perfectly legal and untaxed. The "Pirate" system must be high quality but bare-bones simple, and the lowest cost possible, as perhaps assisted by group buying. Hence, no batteries or other add-ons, keep it simple.
The Bottom Line: There must be a demonstrably obvious Return On Investment ("hey, this thing's a money maker!") that Joe must see before even thinking about going solar. This marketing plan moves the market to the sub-$2/watt take-off point faster than any other plan because it's outside the box. The current "box" for residential solar typically involves high roof-mounting, professional labor, and permitting costs. Those costs kill solar at the starting gate -- because all of that makes PV cost too much for Joe to even think about.
At $2/watt, DIY Solar PV can begin to break past the early adopter part of the mass market. At $1/watt everyone will line up to buy, like at an Apple Store the night before it's latest product goes on sale. Why? Because savvy marketers will get it into Joe's mind that his “Pirate Solar Power” kit is a wealth generator. Every month I get a negative bill from my utility. That is what attracts Joe.
Expect some blow-back: Distributed Generation (DG) on a mass scale is perceived by some as an "existential threat" to utilities claimed here and here. It figures into a FERC commissioner's epic-growth projection, and solar-optimist Tony Seba's projection of solar dominance by 2030. Be mindful of state "solar politics," then, and the inevitable insistence by utilities that they must have "capital cost recovery" fees of some sort if everyone goes solar. That reality must figure into any solar investment channel:
Meanwhile, track these two markets because they are where "Pirate Solar" will work first: Hawaii (really, all island communities) and Africa, where liquid and other base-fuel costs are high. These markets will show us "home-kit" pricing and short payback cycles. And charity groups may actually accelerate innovation in third world areas (e.g., an 18-month payback cycle claimed here, albeit for "LED" and "cell-phone" output level kits).
Finally, the "Pirate" moniker. Stick with it. Who were the first people to cop free software, music, and movies off the net? BitTorrent pirates. People pirate stuff all the time. They are the ones who heard about pirating free stuff, took the time to acquire and learn pirating software, and did it.
They are the ones who will get excited about pocketing tax-free cash from the sun. Marketers will reach them by tapping that same, something-for-nothing impulse that drove them to step up and pirate software, music and films. Except that this form of "pirating" is completely legitimate and ethical. Still, there's a certain emotional glee that creeps up the spine of the guy who's figured it out thus claimed the prize first. Vendors should tap that aspect of the mass consumer psychology here.
More marketing ideas are welcome here, as well as price tips here.
Special Note to MAGE Solar and other solar hardware vendors: You should not be dissuaded by the thought of enduring a high-support, "retail window" for Joe (a common response that prompts vendors to insist "we prefer to sell to professional installers only"). In fact, you should just sell to all takers and, for the DIY folks simply encourage the growth of third-party support, even "farmer cooperative" type DIY groups -- and thus avoid legal exposure (people suing deep pockets for their own installation mistakes). Your sole focus should be on selling tier-one quality kits at the sub-$2/watt needed to make this market sector take off. Accept as a cost of doing business whatever "brand hit" you imagine you'll endure by the occasional DIY job gone bad. You should exploit this Georgia PSC Commissioner's public call for more solar, and weave into a "PV in every pot" sales.
Meanwhile please send me (I'll link it here) your best 2, 3, 4, 5 ... 10KW kit prices. To that end, please think about the design ideas in the next section.
Design Ideas: Market Solar PV kits with simple, uniform language, no more complicated than this (paraphrased from this MAGE Solar P.R. Release): "Plug-and-play AC/PV modules with integrated microinverter display, which cuts installation time down by about 50%."
The pole mount should be availed at 3 levels:
1) A basic, static pole. Sink it in and mount your panels, fixing them in place. Simple, lowest cost.
(2) A mid-range cost version. This pole would have ball bearings at its base for rotation. Joe could thus enjoy the option of manually rotating it to follow the sun while he's home during a sunny day.
(3) A premium model. This would feature motorized trackers so it automatically chases the sun.
As cost-reductions are realized over a mass-commodity market, it will make more sense for Joe to buy higher up this pole pricing tier.
Collected here, in no particular order, are ground mounted products I've discovered, but of course the products and vendors need to be vetted: 1 2 3 4 5 (note: the last vendor, # 5, sold me my roof mounts in 2010 and was very helpful and DIY-friendly). This vendor claims the simplest, lowest cost ground mount product. Here are roof-mount vendors: 1
Other Marketing Tips: Vendors should not offer rebates or discount coupons or waste money on glossy advertising, or even sales staff. Spare that (do what Goodman did for HVAV systems -- it avoided advertising costs and instead focused on quality, warranty and price). And if you feel you must "advertise," then hook-up with utilities and offer to enhance reverse-meter credits to Joe (offer performance-based incentive payments so Joe will optimize your product's yield and thus enhance your brand). Because that will up his make/save calculation (it will enhance the "make" part of that via increased reverse-meter credits) and thus drive more sales.
Besides, no one will believe your claim that your panels are "better" until they see it an independent "Consumer Solar Reports" guide, which also is necessary for this market sector to take off (I recall reading PC World and PC Magazine ratings for the best PC's to buy when PCs were entering stage-2 and then stage-3). That is especially true now that the Chinese have damaged their "brand" with defective panels, and Joe knows that plenty of "manufacturers" are simply buying Chinese panels and re-branding them (hence, PV is now saddled with a third psychological barrier).
To accurately assess the solar yield of a proposed solar site: 1
Here's an article in German (view it through Chrome for translation) about safety concerns for "guerrilla solar" (DIY). Note: When you buy an electric water heater at Home Depot, does the cashier demand electrician/plumber certification before selling it to you? No. Trust people to look out for themselves (I hired someone who knew what he was doing for the wiring-connections of my Solar PV system; I reject turf-protecting installer lobbyists getting legislation passed eliminating my DIY choice).
More on Streamlining the Permitting Process: 1
The Solar Exchange -- for B2B transactions.
Retail Electricity Pricing Sources: 1
Helpful "Generaytor" site (online solar support community for everyone).
Pushing Solar to the "Plug-N-Play" Simple Level for DIY-ers:
My 7/3/13 Comment to Georgia's PSC:
The arguments over Georgia Power's long-range plan, and thus the policy choice the PSC must make for Georgia's energy sourcing, fail to appreciate the power of private capital, and thus private ownership, of solar power. I therefore urge the PSC to study the marketing strategy and policy proposals that I have made here. The PCS can assist the Do-It-Yourself market by helping to foment E-Z permitting and utility interconnection agreements.
Those proposals are aimed at assisting the growth of this relatively untapped market, one that best addresses grid-management and ratepayer concerns raised by Georgia Power (and "brown power" interests) against Solar power.
For more on Free Market Solar Power, click here.
Feedback to the above:
I'm more or less on board with your idea. For this to really work micro-inverters need to get cheaper by half at least. Inverter costs are rather hard to track but I read some recent estimates that show general inverter cost coming down from the low 20 cent/Watt range to the 15 cent/watt in the next 3 to 5 years. Again though, this cost estimate is for central inverters. If microinverters can get down to the 25 cent/watt range or the 20 cent/watt range the portability argument that your're going after gains a lot of steam. But like I said above... inverter costs are hard to track and so I don't have a good idea on how they're trending. I assume you've looked at my data sets. I'm meticulous with my trending of module and system prices. Inverters happen to be a hole in my tracking unfortunately. On some days I'm all gungho and sure that inverter costs will fall but I'm a trust but verify guy... I've got the trust part down but the verify part is absent.
Anyways... If each module had a microinverter you'd be full on plug and play and your idea would work.The way these systems are put together currently is not at the plug and play stage so be careful. Hopefully you're only a year or two ahead of the wave. I can't say though. I'll put it bluntly: Your Pitch has a hole at the moment. That hole is inverters.
Agree all around here. "Pirate Solar Power" is really a blueprint for the first wave of stage-3, the mass commodity phase. It's what must happen: Plug-n-Play, install it over a weekend or two, and 7-year ROI. Fail to do that and no-go with Joe.
In that sense, it's my pitch to the Solar PV industry itself: You wanna survive the post-subsidy phase? This is what you must do. And sure, micro-inverters (I'm counting on the Chinese, who I believe will come to conclude that they have no choice but to go massive wind/solar/wave/whatever renewables) must come down in price and sport a 25-year warranty.
CONTACT US: email@example.com; Pirate Solar Power, P.O. Box 10264, Savannah, GA 31412. On Facebook: James Christopher Desmond