Solar power for all in the US
Solar power for all in the US
Meet the U.S. start-up that is offering solar power to households that are unable to install their own panels. This new approach to supplying energy has even attracted the interest of Total Ventures
Eighty percent of U.S. households could not install rooftop solar panels even if they wanted to. There are many reasons for this: one-third of Americans rent their homes, some live in homes without suitable roofs or sun exposure and many people
simply cannot afford it. The average rooftop solar installation in America costs around $13,000 to generate just 6 kWp of power1; and those who can afford it do not always live in houses with good roofs and sun exposure.
The overall share of renewables2 in the country is still relatively small — less than 11% in 2018, in an energy mix dominated by petroleum, coal and natural gas.
This admittedly discouraging situation prompted the creation of Solstice, a North American start-up that believes that every American household should be able to access an affordable source of renewable energy through what is known as community solar.
The basic principle is simple. Solstice works with developers of centrally-located, shared solar projects looking for consumers to buy their electricity. The start-up helps them find residential customers and handles all the billing, utility crediting, and customer management.
Customers then subscribe to a solar share that produces a specific volume of electricity every month for less than the conventional market price, and they can finally access clean energy, often for the first time. Meanwhile, the solar producer — generally located in the same region as the consumers — generates more revenue from selling electricity directly to residential households than they would receive from selling the power back to the utility. It’s a win-win for everyone.
In practical terms, the electricity generated by the developers and fed into the national power grid is neither traceable nor identifiable for the end consumer. However, consumers’ participation in community solar directly enables these renewable energy projects to be financed, since solar investors require that the electricity be fully subscribed before greenlighting the installation.
This approach to providing energy attracted the attention of Total’s venture capital arm, Total Ventures, set up around 10 years ago. Every year, TV’s experts look at hundreds of the most innovative start-ups in sectors like renewable energy, energy and carbon storage, mobility and smart grids. From that pool of cutting-edge companies, Total acquires minority stakes in a select few to support their development.
Edouard Bulteau, senior principal at Total Ventures, says: “Solstice interests Total due to its highly innovative, community-based approach that brings the consumer into direct contact with the producer. It’s a new way of generating and consuming energy — especially renewable solar energy — and actively involving the consumer in choosing where their electricity comes from.”
Community solar is only in its infancy in the United States. Edouard Bulteau explains that: “It has only really begun to grow in the last three years. It’s still a very new market, but it’s very buoyant.” Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), believes that: “Solar has become a common sense option for much of the U.S. and is too strong to lag for long.”
Consequently, Solstice's business model requires only a small commitment from the end-user, providing the flexibility needed for expansion. As Edouard Bulteau points out: “The contract is based on subscribing to a specific solar share, but customers can get out of the arrangement quickly and easily if they want to.” This is reassuring both for customers, who are paying less for their electricity, and for the solar project developer, who gets access to a large customer base that it can then focus on retaining. Solstice, the go-between broker and technology platform, helps forge this link between the customer and solar projects.
To make its model even more inclusive, Solstice has developed an alternative to the FICO credit score. FICO scores assess individuals’ creditworthiness, and automatically
often prevent low-income American households from buying solar panels. Solstice’s alternative qualification metric — the EnergyScore — is based on prospects’ utility bill payment history, making it both more inclusive in terms of who can participate in solar and more accurate in predicting who will reliably pay their bills.
From Total’s perspective, working with Solstice helps it to understand how it can play a bigger role in community-based electricity supply and distribution models. Edouard Bulteau is convinced that: “The concept can be rolled out on an international scale. However, there must be regulatory provisions in each country enabling customers to benefit from renewable energy credits on their utility bills.”