“If they’re [the solar panels] not producing energy, you’re not paying for it.” That was Vivint CEO, Todd Peterson on Vivint Solar, the company’s latest attempt at bringing renewable energy to consumers in a disruptive fashion. Through Vivint Solar, customers do not have to pay anything up front for solar power. They simply sign a contract, allow Vivint to strategically place solar panels on their roof and then buy the produced energy at a locked-in rate 20-30% below that of the local utility company. And again, if it happens to be an unusually cloudy summer, you don’t take a loss since you didn’t pay anything up front.
Vivint Solar is announcing today a partnership with U.S. Bancorp that will allow the company to expand from its initial test market. A $75 million renewable energy tax equity fronted by U.S. Bancorp will help fund residential solar energy systems in the new markets of Utah, Hawaii and New York. But don’t worry. Vivint is working hard at expanding nationwide.
I talked to both Vivint CEO, Todd Peterson and Tanguy Serra, president of Vivint Solar in regards to the expansion. Serra explained that this was the natural path for Vivint. They already provide 80,000 consumers with energy management tools through its home automation and security offering. Peterson noted that Vivint already has a large base of trained installers and experienced customer support staff. Internal retooling and training only cost the company $200k.
Vivint Solar quietly started installing solar systems within a New Jersey test market last summer. The 2011 trial went well and thanks to partnership with Bancorp, they’re slowly expanding to new markets. The process is reportedly surprisingly easy, too.
A consumer simply needs to sign a contract that locks in the power rate for 20 years and allows Vivint Solar to install the panels on the consumer’s roof. From there, a Vivint staffer files the appropriate forms with the local municipalities, which takes anywhere from days to weeks (depends mostly on your city). During this waiting period, Vivint will take a solar reading of the roof and pull 20 years of weather data to determine optimal panel placement. The installation itself only takes 3-4 hours thanks to Zep Solar’s versatile modular system that allows for horizontal and vertical panel orientation.
Vivint was hessitent to use real numbers in regards to the actual monthly cost. I was told each state will have a different rate and Vivint will work to keep the cost 20 – 30% under that sold by utility companies. Plus, they’ll lock-in the agreed-upon rate for 20 years. That long-term commitment is made a little less scary through a bit of fear mongering in regards to the rising cost of oil.
Vivint Solar is doing solar energy differently. The model guarantees monthly energy savings and removes the scary initial cost — but through a scary-long 20 year contract. However, you have to buy power from someone, so why not buy clean energy harvested from your roof? That’s at least what Vivint Solar hopes consumers think. More savvy homeowners might want to price out a similar system and figure out if there’s greater savings to be had by buying a system outright. But as the Vivint’s CEO stated, their system doesn’t cost a thing on a dreary winter day.