The company has devised a plan that essentially would allow individual homeowners to lease solar electric panels installed on their roofs. That way, they would avoid hefty up-front costs--a perennial barrier to widespread use of solar power.
But there's a hitch: Citizenre does not yet have a product to sell and has not named financial backers. Next month, though, the company intends to announce its lineup of investors, who are expected to put $650 million into the operation. It will also disclose the location of a planned manufacturing plant.
The absence so far of these crucial details has brought skepticism from solar electric industry incumbents, who fear that Citizenre could set solar power adoption back by promising too much. But even critics admit that one of the big ideas behind Citizenre--letting people rent rather than buy solar power--is compelling.
"Inevitably, somebody is going to figure out how to deliver energy services to customers versus selling solar PV (photovoltaic) systems," said Travis Bradford, author of Solar Revolution and president of the nonprofit Prometheus Institute, which promotes sustainable business.
The energy industry today, like the telecommunications market in the 1990s, is ripe for change, Bradford said. Just as cell phone providers offered an alternative to traditional phone service, new solar energy businesses will arise alongside traditional power suppliers, he predicted.
Right now, homeowners who want to tap solar energy typically pay an installer, who gets the systems from a distributor. The distributor, in turn, gets the different components, including the panels and inverters, from manufacturers.
Bradford predicted that in coming years, an existing utility company, or a solar energy provider serving the commercial market, will devise a way to provide consumers with a wider range of energy services. These could include local power generation through solar panels, financing and ongoing maintenance.
"Solar power is disruptive technology," Bradford said. "Now what we need is new business models."
Buy versus rent
Solar photovoltaic panels for the individual home are expensive, requiring up-front investments of $25,000 or higher. Even after tax rebates, it takes years for that investment to pay itself back to the homeowner in locally generated electricity.
The target customer for Citizenre's products and services is the "average Joe" who, until now, has been shut out of renewable energy by the high price tag, company CEO David Gregg said.
To crack the largely untapped residential market, Citizenre wants to borrow a financing mechanism commonly used by renewable energy companies forcustomers: a purchase power agreement.
The idea essentially goes like this: A homeowner leases the panels, which would still belong to Citizenre. As part of it, the customer signs a "forward rental" agreement to purchase the electricity generated by the panels from Citizenre at a fixed rate, over five or 25 years.
The advantages to consumers are a fixed electricity rate and a small investment--a $500 fee, which acts like a safety deposit.
"The gamble you make is that your utility power prices will be continuing to go up. Also, you're contributing to a change in the power system, because you're generating power that does not have any (greenhouse gas) emissions," said Erika Morgan, Citizenre's senior vice president of communications, who still works on a part-time basis.
Part of Citizenre's marketing plan calls for it to partner with well-known non-government organizations, such as environmental advocacy groups, to help sign up customers, she said.
Over the past few months, renewable energy blogs have seen a flurry of heated discussions about Citizenre and its approach. Amid criticism, the company's sales associates and others have defended it for trying to break the log-jam in solar power.
"I signed up to get in line for a (Citizenre) Renu system without a request for a security deposit or any money up front, I know these programs take time to work out the kinks. I don't expect to get a unit until sometime in late November or December 2007, or even in 2008," wrote contributor "2renu" in the comments section of a blog that suggested Citizenre's offer was flawed. "Give them a chance to succeed or fail but just give them (a) chance. Who else is taking a risk with a business model like Citizenre?"