Commentary: Can a ‘Groupon-like’ model lower the cost of solar power?

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The cost of installing residential solar power has declined in the past few years, but the state and federal incentives that help make solar affordable will also decline over time, so it makes sense to continue looking for ways to save money on installations.

A Connecticut program called Solarize has been experimenting with a way to push down the cost of installing solar power and speed up the decision-making process for customers thinking of getting it. The Solarize model, first developed in Portland, Ore., is administered locally by the Connecticut Green Bank.

The growth of home solar was pretty sleepy until 2011-2012, when equipment prices fell and new financing options began coming online. Then the Green Bank and its partners, SmartPower and Yale University, participated in the federal Department of Energy’s Solar Energy Evolution and Diffusion Studies to design and examine Solarize campaigns in Connecticut

How Solarize Works

Solarize programs are designed to use a combination of group purchasing, time-limited offers, and grassroots outreach, while local clean energy advocates volunteer and coordinate with their towns to help speed the process.

In a traditional Solarize Connecticut campaign (called Solarize Classic), a solar installer is competitively selected by a town based on the installer’s bid price, the equipment it’s using, experience in the industry and outreach strategy. Pricing is tiered based on the number of customers who participate.

Part of the cost savings comes from the installer’s reduced customer acquisition cost — money spent on marketing to find and acquire potential customers.

Every customer pays the same price per watt, and the price is pushed down as more customers sign up with the installer. Homeowners also have the option to add to the base pricing for premium panels, equipment, or special setups involving roof pitch or electric upgrades.


The idea is that an intervention such as a Solarize campaign helps homeowners make quicker decisions and helps the work get done at less cost.

If these approaches are effective, then the pace of installations should quicken and the average cost of an installation cost should be reduced in towns hold Solarize campaigns.

Solarize average rate of growth
Solarize Towns 2004-2011 During Solarize campaign Post-campaign rate Non-Solarize towns rate 2011-2015
Average 16.52% 110.16% 59.31% 20.91%

After a Solarize campaign ends, some of its momentum continues. Think of it like compound interest: as more homeowners see solar on neighborhood roofs and get word-of-mouth feedback, there’s a higher likelihood that they too will go solar.

Research using local data shows that even a single additional solar roof can be surprisingly influential in prompting other residents to think about getting it themselves.

Solarize campaigns
Metric Solarize Classic Solarize Express Solarize Choice Solarize Select Solarize Prime Solarize Online Total
# of Participating Communities 34 5 6 5 4 4 58
# of Participating Contractors 11 5 8 5 4 12 18 (unique)
kW Installed 10669 910 1407 1312 1336 455 16,089
Customer Acquisition Cost ($/kW installed) $75 $75-$150 $150-$275 $125-150 $75-$100 $175-$300 $100
Green Bank

Green Bank, SmartPower and Yale experimented with several versions of the campaign to determine what works best:

  • Modified campaign lengths (called Solarize Express): These campaigns require customers to sign contracts within 10-12 weeks rather than 18-20.
  • Simplified pricing structures (called Solarize Prime): These campaigns eliminate the tiered pricing model. The competitively selected installer offers a simple base price.
  • Multiple installers (called Solarize Choice): This modification opens the program to three installers at a time instead of a single installer during the 20-week campaign. There is no tiered pricing and installers submit a single base price. The Solarize town’s selection committee picks which three installers participate, and, as the campaign commences, they are free to reduce prices and compete against one another for customers.
  • Randomization (called Solarize Select): Towns were selected by lottery for the opportunity to participate. Normally towns would apply to the program, competing on criteria such as: previous clean energy leadership; number of existing solar projects; and volunteer capacity to do outreach in the communities. Randomizing the town selection process tests the significance of that process.
  • Online platforms (called Solarize Online): Here, a customer identifies their home on an aerial map and provides information about their energy usage. The online platform then notifies each participating installer that there is an interested customer. Like a reverse auction, each installer can bid the project cost in an attempt to acquire the customer. There is no mandated pricing – just sheer competition. Installers are free to participate and a dozen have done so.

Yale will continue to explore these different approaches.

This map uses statewide averages as a benchmark, and compares them against how much was deployed during (and slightly after) the term of Solarize campaigns in the towns that hosted them. In some cases the difference is substantial.

One additional statistic of note: 10% of systems installed in towns with Solarize campaigns have used USA-made panels. In towns that never hosted a campaign, it was 7%.

Looking ahead

In spring 2015 just over 10,000 homes in Connecticut either had solar power or were about to get it. By fall of 2015 that number reached 15,000, with more than 2,000 installed as part of a Solarize campaign.

Our field trials from 2012-2015 have given us valuable data and insight for changes going forward.

  • The future Solarize model will have an open-market approach. Multiple installers sharing a single discounted price performs just as well as having a single installer that uses tiered pricing, so it makes sense to let in more competition. Also, single installers serving entire communities can be overloaded with projects, extending the time-to-install figures (see below). A do-it-yourself model is in the works, which will hand the reins over to the private market, and its participants can scale their business as the market needs.

  • The Solarize U program worked with six institutions to implement the Solarize model in a university setting, with faculty and staff eligibility for group purchasing discounts.
  • Electric utility companies may help target future Solarize campaigns. That’s because they know where the power grid is suffering from congestion because of constrained transmission lines. Blasting those areas with new solar installations reduces the need to import power from far-flung central station generators. That could even reduce the costs borne by electric ratepayers by deferring the need for costly transmission system upgrades.
  • Solar is no longer just for the affluent. The Green Bank is working with the Connecticut Housing Finance Authority to apply the group purchasing model to more than a dozen housing authorities statewide – which should lead to about 750 kilowatts of new distributed solar capacity, installed at no cost to the housing authorities and to be paid back at a discount to current electricity prices over 20 years. To a similar point, installers focusing on low- to moderate-income populations are now operating in Connecticut.
  • Lessons from Solarize hold real promise for speeding up sales of alternative fuel vehicles, since the “peer effects” of neighborhood interactions have also been shown to play a role in vehicle purchase decisions. For example, one could envision a Solarize EV initiative that applies the Groupon model to car dealerships for electric vehicle purchases.

Robert Schmitt and Bob Wall contributed to this story. Data is current up to October 2015.

Trend CT welcomes contributors to share data, analysis and perspectives that follow our guidelines.

What do you think?

  • Peter Morgan

    I keep not seeing discussion of the consequences of installing solar panels on the roof of a house. What are the long-term effects on maintenance costs for the house, given the extra weight and given that the roof materials are less accessible. What happens if there is heavy snow? There may be answers to such questions, they’re just about engineering, but good engineering costs money and I don’t see even a hint towards continuing costs in this article, which seems very close to marketing, nor in any marketing information I’ve come across.

    TrendCT might perhaps analyze what annual costs have been thus far for those who have installed solar on their roof and, separately, for those who have free-standing installations. Early adoption has its own logic, but for others it would be fool-hardy to adopt a solar installation if such statistics are not gathered and reported scrupulously.

    • Roger

      For our home, the solar company (I believe as required by the town) had to calculate roofing loads and snow loads and reinforced the rafters in this Victorian on the inside to handle the added weight of panels on one side. I believe the basic engineering inspection was part of the town permitting process. Solar PV is not a new technology (we have `80s era systems still working in CT, and modern solar rebate programs started a decade ago). Roof mounting systems have been continually improved over time to reduce the potential of problems from penetrations, etc. With steel components and no moving parts, solar PV is a very simple and robust technology and largely maintenance free.

      For maintenance, the big one is the limited lifespan of inverters, but that is a known cost and replacement is usually factored into cost/savings calculations.

  • Matt Macunas

    You’re right that weight is added to roofs with solar and that it makes roof materials less accessible. But it makes roofs less accessible to weathering too – since it acts as a bit of a shield. I would guess it’s a wash in terms of shortening/lengthening roof life, but the industry does make claims that it extends them. Solar installers do have engineers on staff, and they tend collect information on spacing and width of roof joists to support the weight of panels and racking systems. An honest company should let the customer know if, say, an attic knee-wall needs to be installed for support. But generally, that’s why it’s best to install solar on newer roofs – so their life spans roughly match.

    For snow – it mostly just slides off. Even with only a tiny bit of light, the panels have an electric current that’ll warm them. But for unusually cold spells (think February 2014) it might be best to clear the panels with a roof rake before snow turns to ice.

    The Green Bank does have installation data and even energy production data (assuming that the homeowner used a state incentive as part of the project). But the agency wouldn’t have ongoing info re: roof characteristics over time. Those measurements aren’t automated like energy production is, and it seems like it’d require site inspections for years/decades after the installation event to calculate the prorated wear and tear versus a ground-mount system. But maybe we’ll see the knowledge on this develop faster now that there are more installs out there.