Solstice’s mission is to enable the 80% of US citizens - and particularly those from deprived areas - who are unable to install rooftop solar arrays on their homes to benefit from community-generated solar power instead. Although the number of people currently locked out of the market seems high, it includes everyone from renters, low-income households and those whose houses do not receive enough sun to make it viable.
The idea works by setting up solar gardens in community spaces or solar farms on the rooftops of community buildings such as churches, schools and local employers. Community members sign up to the scheme without having to pay any upfront installation costs, and their array feeds electricity into the grid.
Households then simply receive their electricity as normal but are given credits on their bills for the energy produced, which amounts to savings of around 10% per year. They are also given access to an online management platform to sign either themselves or family and friends up to the scheme, manage their account, pay their bills and see how much they are saving.
The scheme’s first pilots were set up in 2015, but since then 13 projects have gone live in Massachusetts, New Jersey, Washington DC and just recently in New York. Between them, the arrays generate about nine megawatts of electricity, with each megawatt serving the needs of about 150 people. But the aim is to grow this capacity to 100 megawatts over the next couple of years in order to save 150,000 consumers about $36 million per year.
One way of doing this will be to launch an online marketplace over the next couple of months. The website will enable interested parties to enter their zip code into a search facility to see where the nearest project is to them. The idea here is that, although it is not necessary to live close to a solar garden to sign up to its services, it is a legal prerequisite that you reside in the same utilities zone.
But the most effective way of attracting new customers, believes founder and chief executive Stephanie Speirs, is to use the same viral community organising tactics that were employed when she managed field operations for former President Obama’s election campaign. She explains:
According to a Yale study, the adoption of solar is contagious so once one person does it, others follow. So if we sign up early adopters such as churches and workplaces, we see their congregations and workers sign up too. There’s a contagion effect.
Cost-effective business model
As to the not-for-profit organisation’s business model, Speirs points out that it partners with a number of solar technology developers, which install the arrays and pay Solstice to manage their customer base. She says:
We get money from the solar developers who pay us for managing their customers, which is what we’re good at. Government regulations mean that financing doesn’t come and projects aren’t built until you line up customers so that’s what we do.
Although a good number of commercial solar players in the US have gone bust lately, Speirs believes that Solstice’s approach is simply more cost-effective. She explains:
A lot of solar companies are going bust due to high customer acquisition costs. Solar is sold in just a few ways – there’s door-to-door canvassing or someone will have a stand in a home improvement store. Both are very effective but they’re also very expensive as it’s stranger-to-stranger contact. But we’re cheaper because we rely so much on peer-to-peer communication to enrol customers. There’s an element of trust in relation to energy and so recommendations need to come from a trusted source.
Because the US market for community solar is new and in the process of “proving itself”, the goal is to focus for now on the domestic market, before expanding out elsewhere, not least into the developing world. As Speirs concludes:
I’d been working in India and Pakistan, but I realised that I didn’t have to be halfway across the world to deal with solar access issues. Low-income people - like my mom - were unable to get solar access so I wanted to work in an environment that I understood and where I could make a real difference.
Each of the winners of GLG’s Social Impact Fellowship are on the cusp of change. They have taken what are in essence simple ideas and applied them to seemingly intractable situations where there is a genuine need for change, using technology as both an enabler and, as Speirs calls it, an “amplifier”. The next, and perhaps even trickier stage in some ways, will be to develop and grow their businesses in a long-term sustainable way. We wish them luck.