Citizenre
Encyclopedia
Citizenrē is a renewable energy
startup company
that plans to rent photovoltaic (PV) solar systems to homeowners in the United States
. The name Citizenrē is a combination of the word "citizenry" with the abbreviation "RE" which stands for renewable energy.
to be drawn on at night.
The company plans to construct its own PV manufacturing plant, with production beginning some time after that (see section on criticisms for more on the plant delays), and will franchise
local installers to customize and install the systems. The sales and marketing is being conducted through independent contractors using a network marketing model.
In effect, the customer gets much of the benefit of owning a solar system without the inherent risks. The customer gets positive cash flow from the first month. Besides that, if they move, sell their home, or rent their home, they can transfer or cancel the lease without penalty (that is why they call it a rental). If electric prices go up in 15 years, the customer benefits by not having to pay them. If electric prices go down (due to Bloom Box, or income from stabilizing the grid with electric car batteries, for example) then the customer still has the same fixed rate for 10 years. In almost all cases this is projected to make customers secure and happy with their purchase. They are part of the "solution" rather than being part of the problem.
The main areas of criticism are:
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...
startup company
Startup company
A startup company or startup is a company with a limited operating history. These companies, generally newly created, are in a phase of development and research for markets...
that plans to rent photovoltaic (PV) solar systems to homeowners in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. The name Citizenrē is a combination of the word "citizenry" with the abbreviation "RE" which stands for renewable energy.
Business plan
The company's business plan is based on the premise that they can reduce the cost of generating electricity by cheaply manufacturing and installing company owned residential roof top solar electric panels. The electricity produced will be purchased by householders under contract to Citizenrē. Excess power produced during daylight hours will be "banked" with local electric utilities by net meteringNet metering
Net metering is an electricity policy for consumers who own renewable energy facilities or V2G electric vehicles. "Net", in this context, is used in the sense of meaning "what remains after deductions" — in this case, the deduction of any energy outflows from metered energy inflows...
to be drawn on at night.
The company plans to construct its own PV manufacturing plant, with production beginning some time after that (see section on criticisms for more on the plant delays), and will franchise
Franchising
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a verb....
local installers to customize and install the systems. The sales and marketing is being conducted through independent contractors using a network marketing model.
System overview
The Citizenrē REnU system (REnU = Renewable Energy Unit) is based on the plan of renting solar systems to customers, fixing their utility costs to CitizenRE, and then selling the excess power back to the power company, along with getting income from any cap and trade certificates (SRECS) received for producing clean energy. The customer signs a fixed-length contract to pay a flat rental rate that is fixed for 10 years with an option to renew for another 5 years. The rate for each homeowner is determined by the average rate of their local electric utility.In effect, the customer gets much of the benefit of owning a solar system without the inherent risks. The customer gets positive cash flow from the first month. Besides that, if they move, sell their home, or rent their home, they can transfer or cancel the lease without penalty (that is why they call it a rental). If electric prices go up in 15 years, the customer benefits by not having to pay them. If electric prices go down (due to Bloom Box, or income from stabilizing the grid with electric car batteries, for example) then the customer still has the same fixed rate for 10 years. In almost all cases this is projected to make customers secure and happy with their purchase. They are part of the "solution" rather than being part of the problem.
Benefits of the Citizenrē business plan
The Citizenrē system has a number of benefits:- Broadening the solar PV market. Currently, a PV system can cost an average homeowner more than US$40,000. The market is currently aimed at luxury homes, and remote homes that have no electric grid access. By lowering the entry cost, without incurring consumer debtConsumer debtIn economics, consumer debt is outstanding debt of consumers, as opposed to businesses or governments. In macroeconomic terms, it is debt which is used to fund consumption rather than investment...
, the solar PV market will be able to expand to include the huge middle classMiddle classThe middle class is any class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class....
suburban homeowner. - Reduction of dependence on dirty power sources. Citizenrē hopes to encourage the U.S. to be able to adopt solar for 25% of electric power needs by the year 2025.
- Encourages distributed power generation. Having power generated where it is consumed reduces the effects of loading in the electric grid. This will be particularly beneficial on hot summer days when the grid load is at peak, and solar generation is also at its peak.
- Provides cost savings to consumers. Because PV systems generate a known amount of power from a device of known upfront cost, and does so without consumables, means that Citizenrē can enter into long-term contracts with customers, essentially preventing a rise in the price of electricity. Even if the rates of the local utilities rise due to resource costs, labor costs, or inflationInflationIn economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
, the Citizenrē customer's rates remain at the original price for the entire contract period. - System size matched to usage. The Citizenrē system is continually adjusted as necessary to provide the correct amount of power for each customer. For example, if some members of the household move away, Citizenrē will reduce the number of panels on the home.
- Promotes energy efficiency first Online videos and tutorials from sustainability expert Chris PrelitzChris PrelitzChris Prelitz is an environmental and green building advocate and author.Chris Prelitz lives in a net-zero solar powered home that Prelitz designed and built in Laguna Beach, California....
encourage reducing electrical consumption with energy efficiency and behavior change as a first step measure before doing solar.
Criticism of Citizenrē
Although the company is still in startup mode, it has drawn criticism from some existing solar industry players.The main areas of criticism are:
- Value of each individual system. The Citizenrē business model requires an install cost of less than half of the current solar installation price per kilowatt. Some in the industry feel this claim is impossible, and is evidence that CitizenRE is not a true player in the industry. The company counters that this will be solved through their vertical integration and standardized installation techniques.
- Corporate funding. The company says that they will acquire US$650 million in loans to build a manufacturing plant. This claim has been made since 2007, and has not yet borne fruit.
- Sales model. The company has instituted a network marketing strategy, ostensibly to begin sales at a very low cost. Although there are negative associations to network marketing companies, Citizenrē is quick to point out that there is no cost to join their sales network, and no need for the sales people to make any purchases, thus preventing abuse. The current sales model has yet to make anybody any money.
- Installation waiting list. Installations cannot begin until the manufacturing plant is built and the installer franchises are in place. Originally the completion date was late 2007 and has been repeatedly pushed back. The most recent stated date was 2009, but that date has passed with no update from the company.
- Industry shakeup. Many current solar installers are afraid they will lose customers to Citizenrē's claims of solar with no initial cost. Citizenre counters that they provide initial and annual training to anybody wanting to be a sales associate, and that this training will uplift the industry.