Friday, February 22, 2013

EnergySage offers one-stop shopping for solar PV

Friday, February 22, 2013
"We're essentially taking success from other industries and applying that to PV," explained EnergySage CEO Vikram Aggarwal. "We want consumers to see apples-to-apples comparisons with a standard set of assumptions, and the tools to make the right decision."

In general, consumers overall "are still very skeptical" about how solar PV and other renewable energy technologies (more on that later) can actually help them, Aggarwal noted. Educating consumers about the application, suitability and economics of solar PV, and how they can apply together to different situation, to a consumer's own property in a specific region, what it will cost and save them-"once those are answered, interest goes up tremendously," he said.

Founded in 2009, Cambridge, mass.-based EnergySage received a $500,000 DoE Sunshot grant in June 2012 to build out the platform for solar PV, part of the DoE of broader efforts to reduce "soft costs" associated with solar outside systems and hardware. The software already existed as an offline product; now they've made it into an online solar marketplace with transparency – a comprehensive one - stop shop.

Part of the EnergySage platform's service is in education, helping to drive the appeal of solar and other renewable energy technologies. Consumers are encouraged to create their own case studies describing their installed clean energy system, with information about its size, cost and savings; they're so able to rate their quotes and installer experiences and relay advice for others.

The platform's other goal is to reduce the time and money that suppliers and advertisers spend to acquire customers. Search costs can now exceed 25 percent of the entire system cost. SolarCity has cited 44 percent of new customer acquisitions. EnergySage did its own surveys and calculations, and came up with about $1.10 / W spent by the average residential installer on customer acquisition. Thus, EnergySage's online marketplace serves up to solar installers a plate of qualified and educated customers, to whom they can sell very quickly with a short sales process, closing a transaction in several weeks instead of several months, Aggarwal says.

How it works

A consumer posts basic information about the property, energy usage, and current electricity payments. A network of installers browses that information and can flag their "interest" in the project or formally submit a quote. A user guide offers suggestions along the way to improve the listing, to add more information and improve the listing so suppliers can better run their calculations and provide more targeted, speedier quotes. The platform's dashboard that shows a tally of what a customer will continue to pay the utility if they take no action, effective form of negative reinforcement, Aggarwal points out.

The platform's formulas "are not necessarily that complex," said John Gingrich, head of corporate development at EnergySage; "it's what we think are the most important metrics to customers." Two assumptions made are a standard 2.5 percent inflation rate to utility electricity prices, and REC/SREC values, though it "tend(s) to the conservative side," he noted. (Eventually consumers will be able to toggle assumptions for these two factors.)

For installers, their EnergySage dashboard should look similar to tools they're already using, like They can jump in and out of leads picking what's interesting to them. based on a consumer's profile it takes about 10 minutes to provide a quota, inputting cost, type of hardware (panels, inverter, technology parameter monitoring system), and a financing option. Installers can also see if others have expressed in interest in a prospective customer.

Installer in EnergySage's database are not self-selected; they go through a 10-point checklist, including being licensed in the state and approved to process rebates. Other qualifications include number of years in the market, focus on solar PV technology, and other quality metrics including speaking directly with the of the installers business ownership. "Once we ve done that vetting we let the marketplace judge them," Gingrich said.

The revenue model for this solar PV matchmaking service is a per-watt commission taken from business-winning installers. That will evolve as EnergySage batch gets into new markets with different sensitivities and price points, but "we want providers to have the fee same as there's a level playing field," said Gingrich. Installer for it's a very low-risk model, with a direct and committed pipeline of customers who are primed to move fast with approval and financing, says Vikram. EnergySage adds value to the transactions by helping educate and shepherd customers along the decision-making process, and opening quotes (and defining all the factors involved) in a clean, consistent, comparable format.

On early customers' perspective

We spoke with one EnergySage consumer users in Massachusetts, who knew he wanted a solar installation but clearly didn't want to repeat the typical process of looking up and vetting contractors. "" I could have done it on my own, but I'd have to be really motivated go find people, "but without knowing where to start or who to talk with," he explained. "I don't think I would have got this far - and wouldn't have understood it all either."

After plugging in a few criteria from his electric bill - total monthly kWh used, how much the last bill what, etc. - he's received a icone of roof-top solar proposals, all for system that could'nt around 50-54 percent of his electrical needs, meet with varying options for ownership from fully owned/paid up - front to zero-money-down and covered. After fielding several proposals, some via the site and later through offline follow-up ("responsiveness is free," he advises to installer using the platform) he's wants nearly decided on a third-party-owned option that pay itself off in about five years, and save him maybe $10,000 over 20 years.

Future expansion

EnergySage is initially targeting solar PV, but wants to help consumers research and shop for whatever clean energy technologies and systems would work best for them: solar hot water, geo thermal, combined heat/power, biomass, and even small scale wind. "We can take you and really empower you to make that decision, understand why one option vs. the other," Aggarwal said. "There's a very vast application for this kind of shopping experience." Hey Lake competition coming from larger solar installers such as SolarCity and SunRun Sungevity, who have the marketing muscle to stretch into multiple markets.

Currently EnergySage covers Massachusetts, New York, Connecticut, and New Jersey, and "very soon" will expand to Rhode Iceland and Pennsylvania. Aggarwal expects the network to expand to 10-15 states by the end of this year, taking about two to four weeks to build out the site for a new state.

EnergySage has added some private investment to the DoE Sunshot funding, and is in discussions for another round of funding next year; most institutional investors step in once a product has demonstrated traction in the marketplace, Aggarwal noted. "We don't require a large capital infusion to break even," he added; "one or two million should be sufficient."

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