The Speculist: Solar as a Service

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Solar as a Service

Drive around and look at the rooftops in your neighborhood. If your town is anything like where I live chances are you won't see any solar panels. Take a good look. In fact, take some pictures to document how your town looked circa 2008. By 2018 those rooftops will, mostly, have solar panels. Don't worry they won't be ugly boxes- at least not for long. The way solar will look will change too.

Solar has been around for decades, but it hasn't been accepted. Things are about to change - partly due to technology, but also because we'll find the right business model.

A good example of how this worked is the mobile phone. They were also around for decades before they were broadly accepted. In the 1967 movie Clambake, Elvis Presley's character took a call on a car phone. It was a plot point that his oilman dad had to call every mobile phone register throughout the country to find him. And of course it was very important to the believability of this car phone that Elvis' character was very rich.

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In the 1987 movie Wall Street, Michael Douglas' character did business from the beach with this brick:

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We laugh at the brick now - you could throw a hip out carrying this in a holster - but it was an incredible leap forward from the Elvis phone. It was no longer tied to a car. And it was a true cellular phone - no mobile registers to call - just dial the number like a house phone. On the downside it was still analog. And it was still a status symbol - Gordon Gekko had one because he was rich.

By the time of the 2004 action film Cellular, it was an important plot point that everyone had cellphones.

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Cellphones are dirt cheap now. I got laughed at the other day when I pulled out my Go Phone. Yeah, I bought this thing around Christmas of 2006 for $20 as a "disposable" cell phone. Its still going strong. I plan to become marginally less dorky by buying an iPhone... soon.

Anyway, solar will be adopted in a similar fashion. Sunshine's free, but the panels have been expensive. Payback on these things has been longer than their useful life. Typically people have resorted to solar only if grid electricity was unavailable. That's changing. The word is that solar is slowing becoming competitive with grid power.

There's been another problem with solar - you get the risks associated with owning the power plant. If there's a problem at the hydroelectric damn its not your problem, but if there's a problem with your solar panel, it is your problem.

Until now. Recurrent Energy is now offering "solar as a service." They come to your site, set up the panels, and plug you in. They maintain ownership of the panels, so if there's a problem, they'll fix it. They promise that their service "supplies competitively priced solar electricity, displacing expensive peak-time utility power."

I think this business model will be an important part of the move to solar. If the price is competitive with the grid (or better) and the risks of ownership remain with a power company, why not make the move?

Comments

It will be interesting to see if solar as a service catches on initially only to be replaced later by a model in which people own their own solar infrastructure -- kind of like what happened with phones where we went from renting equipment from the phone company to owning our own equipment.

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