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The Solar Innovation Series – Solar Red –
Finally some PV Innovation on the roof!
The Solar Innovation Series with J. Peter Lynch
Point Roberts, South Salem, New York- July 31, 2009- Investorideas.com announces the most recent edition of the solar innovation series at "Renewable and Solar Energy Perspectives" with J. Peter Lynch, 'Solar Red - Finally some PV Innovation on the roof'.
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July 31- Residential solar photovoltaic (PV) systems potential in the US alone is a half a trillion dollar market; yet only 13,000 residential installations were completed in the US in 2007, out of 73 million homes (.0002%). There are many reasons for this lack of adoption, for what should be a very popular technology:
- Installation requires a significant amount of expert labor
- The cost of residential PV is high relative to grid power prices
- There is a lack of financing options for consumers
Solar Red (www.solar-red.net) is taking a unique approach to making residential PV systems ubiquitous on homes, which addresses all of these key industry issues. Solar Red is attacking the high cost of sales and installation by leveraging the 23,000 roofing firms that replace approximately 5,000,000 roofs in the US each year (National Roofing Contractors Association). Solar Red will provide products and services to the roofers which make residential PV systems uniquely easy and inexpensive for them to sell and install. By doing this, Solar Red is dealing with a largely unaddressed, yet significant component of the cost structure of residential PV.
Solar Red's offering includes three components:
- Proprietary and patent pending technology that greatly simplifies and reduces the cost of installation
- A set of services that provide the roofers with missing back-room functions, which are needed to enter the residential PV installation business
- A consumer-financing vehicle that deals with the single largest barrier to the mass adoption of residential PV, the consumer's up-front capital expenditure
The Technology
Solar Red's "plug-and-play" residential PV system is quickly and easily co-installed with a new roof by any roofer with standard roofing skills and tools. By enabling the roofing industry as residential PV installers, Solar Red lowers the overall cost of residential PV by 25-30% (i.e. nearly $6,000 for a $20,000 system). Solar Red's all-AC, parallel system architecture increases overall system efficiency by 7% and eliminates differential shading problems that can cause power output to plummet in a traditional system.
The simplicity of the Solar Red solution ensures quality installation, which in turn ensures years of reliable power flows. The system is modular and can accommodate residential PV arrays of any size, and allows for snap-in/snap-out installation of the solar panels once the brackets are installed with the roof. This innovation allows for quick and easy maintenance or changes in future technology. The snap-in/snap-out technology also addresses fire safety concerns as the panels can be quickly released and dropped to the ground should firefighter access to the roof become necessary. This avoids potentially significant future fire safety limitations on residential PV systems.
Solar Red's proprietary system allows it to assemble the best in class technology for a complete and cost effective turnkey system. Because Solar Red can pick and choose the PV panels and other technologies it offers from all available sources, it can quickly take advantage of changes in technology as they occur. Solar Red will continually improve its own products as well as search the world for the best residential PV technology to offer enhanced value to their customers.
The Services
Solar Red's services, created specifically for roofers, are designed to leverage technology to create great efficiencies and enable them to get into the business quickly and easily. The services will include satellite aided computerized system design and estimating, training, building permit preparation, tracking and processing of rebates and financing for the PV system. This will allow roofers to earn additional profit on each job they perform with little or no additional overhead investment and allow Solar Red to share in the installation profits on each job. Leveraging the re-roofing market provides instant deal flow (roofers make approximately 5 million roofing sales annually collectively worth $23B).
Sales Channel
Approximately 10% of roofer's nationwide control 80% of the re-roof market and will be our primary targets for developing long term business relationships. Through these key services Solar Red will enable roofing firms in the United States who are missing out on the growing residential PV market because they lack the skills and knowledge to easily and quickly add solar installation to their existing business. The roofing firms provide Solar Red with an untapped sales channel worth thousands of sales each year at NO additional sales cost and a low cost vehicle for installation.
Financing
Solar Red and investors will provide pools of funds to purchase residential PV systems which are then leased on a long term basis to consumers. This overcomes the single largest barrier to mass adoption of residential PV which is the high upfront capital costs. With today's banking system melt-down and the real estate crisis, even if consumers had the will, it is unlikely that they could find financing for a residential PV system. The lease structure solves this problem, is simple for consumers to understand, has low transaction costs and still allows Solar Red and Investors to take advantage of depreciating the systems. All billing will be automated and the consumer will be responsible for the maintenance of the system.
Business Overview
Solar Red is in the business of providing services and technology to help roofers successfully tackle the residential PV installation market, while building a strong brand within the channel for service, quality and innovation. Solar Red will generate revenues through all three activities outlined above:
- Sale of hardware to our Authorized Dealers at standard manufacturing markup
- Margin sharing with the roofers on each installation
- Lease payments on the residential PV financing pools
Through the efficient installation of residential PV systems and the use of the lease financing structure, Solar Red will create long-term, recurring cash flows that grow with time, while creating strong value for the consumer. They will create value by reducing costs, consolidating deal flow, managing risk and assuring high quality, long lasting power and cash flows. Solar Red is focused on building a business that will be sustainable in a world of mass market adoption of residential PV, where there are a million or more residential installations per year.
Solar Red's management team fervently believes in creating a world of mass market adoption of residential PV by 2017, in which roofer installed residential solar system sales volumes exceed 1,000,000 systems annually. This represents a total of 5GW - the equivalent of building 5 large nuclear power plants each year.
Solar Red was founded by a solid team of entrepreneurs with extensive startup experience and expertise in Cleantech, Solar, Residential Construction and Public Policy dedicated to creating value and moving the company to the next level.
Current Company Status
The company is perfecting the engineering and fabrication for the prototype residential PV system hardware. Solar Red will installed their first test roof in May 2009 in San Jose, CA. They will work directly with roofers to insure they have the best system available and that it lives up to expectations for ease of installation. The company hopes to have its second generation system up and running in early fall of 2009 with the assistance of a DOE grant.
The company is looking for its first round of outside financing to complete the testing and certification of the technology, develop the back-room services and provide general start-up funds. In addition, Solar Red is looking for investors interested in funding the lease pools.
Solar Red, by virtue of its proprietary installation system, services and financing plan, will lower the cost of residential solar PV systems and make their installation commonplace with any new roof. Should you have any questions regarding Solar Red or desire more details, please do not hesitate to contact the company at www.solar-red.net. The CEO, Joe Augenbraun, may be reached at joe@solar-red.net or contact Mr. Lynch for details.
Mr. Lynch has worked, for 31 years as an independent analyst and investor in small emerging technology companies. He has been actively involved in following developments in the renewable energy sector since 1977 and is regarded as an expert in this field. He was the contributing editor for the past 17 years to the Photovoltaic Insider Report, the leading publication in Photovoltaics industry that was directed at industrial subscribers, such as major energy companies, utilities and governments around the world. He can be reached via e-mail at: solarjpl@aol.com or at his new website: www.sunseries.net.
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