Why is getting rooftop solar such a nightmare?

Who do I have to beg around here to get some solar panels installed on my roof and why do only 3% of US homes have rooftop solar, versus 20% of homes in Australia?

If you’re reading this in a large house, in a non-urban environment, with a roof facing south and in a sunny state you’re probably thinking: what is this guy talking about, everyone here has solar and it’s a breeze! The thing about residential solar is just like the old saying “all politics is local”, “all residential solar economics and incentives are local”. Here are all the factors that go into whether or not installing solar panels on your home could be a wise financial decision vs. a money pit, or if it’s even possible to install them where you live:

  1. Is it sunny where you live? If you live in a sunny place like Phoenix or Reno your solar panels will generate power way more often than if you live in a rainy or cloudy place like Seattle or Pittsburgh.   

  1. Is the sun blocked from hitting your roof? Referred to as “shading”. If trees or a neighbor’s house prevent your roof from seeing enough sun it can drastically reduce the amount of energy your panels can produce. 

  1. Is your roof big enough? The ratio of roof space : energy needs is typically out of whack in any multi-family unit. Say you live in a 5-story walk up containing 20 humans. Your average energy usage per month will be 3,200 kWh - that will require at at least 100 panels or a 32 Kilowatt system. That’s going to require at least 1,600 square feet if you buy the most efficient panels out there. Odds are you roof isn’t big enough to accommodate that.   

  1. Is your roof too steep: this affects a number of things: 1) it affects the amount of sunlight your roof can actually receive, 2) many installers will not want to take on the project as it will entail additional safety risks to their workers, 3) it will make the project more expensive due to the scaffolding required and 4) it will require more expensive mounts to prevent the panels from falling off the roof.

  1. What direction does your roof face? If the majority of your roof is north facing you may not receive enough sunlight to make installing the panels economically viable. Roofs that face South and East get the most bang for your buck. Of course if your roof is flat this is a non-issue :-).

  1. Does your homeowner’s association forbid rooftop solar? Believe it or not this remains a big issue in many places due to arcane and outdated HOA laws.

  1. Do you live in a state that allows for net-metering or some version of it? “net-metering” = the utility company pays you for the excess energy your solar panels generate. However these policies differ widely by state. For example, in Florida the utilities are doing everything in their power to prevent homeowners from accessing rooftop solar. Meanwhile, Vermont has historically been extremely generous with it’s net-metering policies, but is revisiting those policies as they have shown to be punitive to lower income communities and unfairly subsidizing the rich, or have they?

  1. Do you own your home / do you live in an apartment? if you are a renter, getting physical solar panels installed on your roof is not for you, because getting solar is a modification of the actual physical asset and requires owner approval. Even if you can convince your landlord to do it you are unlikely to benefit from the financial upside. 

  1. Is your building over 3 stories high: Similar to the challenge with steep roofs, higher buildings introduce added risk and added capex (you need a crane not a ladder and scaffolding is required). On a large commercial project this would be fine, but on your rooftop those added costs are not amortized over a large enough base for the math to pencil out.  

  2. How’s your credit? There are a number of ways to pay for residential solar which we will cover below, but at a high level if you can’t pay cash, you’re going to need a loan, and if you’re going to need a loan and don’t have great credit it will be expensive.

My (attempted) customer purchase journey:

A quick aside for context. I don’t actually own my home, like any good aspiring entrepreneur in pricey San Francisco I am a renter. As mentioned earlier, you cannot buy and install solar panels unless you own your home. However I’m a bit of a hustler (or at least I like to think so). So I got my landlord to agree to let me explore this in his name. I thought it would also be an interesting exercise as 43 million Americans are renters.

Like any good millennial I went straight to Tesla:

But maybe because I used to work in call centers I really wanted to speak to a human and ask a bunch of questions, so when the Tesla website informed me that this was a digital process only I was dismayed. In fact if you want to get through to a human or have someone take your request seriously you have to put down a $100 deposit! 

So what did the Tesla experience teach me:

  • 1) Tesla is hot (in case Elon Musk becoming the world’s richest person or Tesla stock being up 10x YoY didn’t make that obvious enough). They either have so much demand for solar that they aren’t trying that hard to acquire every customer who comes to their landing page, or they are more focused on selling electric vehicles, or it’s.. #2 

  • 2) Customer acquisition in residential solar is super expensive, due in large part to the high cancellation rate during the sales process. So Tesla is proactively controlling for this by trying to narrow the funnel and only let the super serious customer though (that and offsetting that customer acquisition cost with a $100 commitment)

Ok, what about Sunrun

I gave up on Tesla and went to the next most popular name in the space, Sunrun. I knew the name from my days at Comcast where they had a big corporate partnership. I spoke to a friendly customer service rep at Sunrun who within 2 minutes was staring at my rooftop via satellite and informing me that at a 45° pitch it was too steep for them (they don’t go steeper than 40°). He declared that this meant it was an A-frame and they don’t do A-frames. Now yes I’ve always dreamed of living in an A-frame deep on a remote mountain in the Boreal forest of Northern Canada, but I never thought my modest SF apartment was an A-Frame. My lumberjack dreams aside, why is a roof being too steep a problem? Well apparently the way they mount their panels it would be at risk of falling off. So yeah that was a dealbreaker. By the way, the more interesting data point on residential solar and roof steepness is that depending on your latitude there is an ideal angle for your roof to receive the most sunlight, in San Francisco that angle is 38°

So Sunrun didn’t want my business despite my begging:

Time to go local

I googled “solar steep roof” and found these lovely folks: Your Solar Solutions. I called them and explained my plight. Steep roof! No problem they could dig it. But how many stories was my building, 3 stories, err they would have to get back to me on that. They called back and told me that buildings with three or more stories cost extra because they require a crane. Additionally some neighborhoods in San Francisco don’t allow it because of limited access for emergency crews. 

When in doubt ask your neighbor

Ok 3rd no. I wasn’t going to give up that easy. While on the phone with Sunrun they had mentioned to me that they could see my neighbor had solar on his roof. I decided it was time to do this the old fashioned way. I went over and knocked on my neighbor’s door (I know how very not 2021 of me, why knock when you could DM, snap or send a passive aggressive message on Nextdoor). My friendly neighbor gave me a tour of his roof and informed me that they had used a wonderful local company in San Francisco called Luminalt Solar

Luminalt Solar

These people were criminally nice - seriously the woman I spoke to in customer service probably spent 2 hours educating me on the process. In terms of tech stack I learned that most people in the industry rely on Solar Census and Google Earth to look at your roof to understand pitch, sunlight etc. They also used this cool app called UtilityAPI to pull in my PG&E bill info. In the end Luminalt got close but ultimately informed me that they would not be taking the project on :

So I gave up, or did I?

So I have finally given up. Although I’ve recently had a thought. My landlord did mention that the roof is getting old and in need of replacement… perhaps if they just replaced the entire thing with a Tesla Solar Roof at a different pitch that would be economic.. Well I took a rough guess that between me and my less frugal flatmates our average monthly utility bill is $400. See below for Tesla’s estimates on the cost of the solar roof. Hmm this is not a very attractive payback actually. Let’s assume that these solar panels cover 100% of my energy needs and I will now be saving $4,800 per year. At a $52,240 total cost it will take 11 years for this system to pay itself back. Really not worth it - especially considering solar technology will continue to improve in the interim.

Rooftop solar is unnecessarily expensive in the US due to bureaucracy

In America, land of the free, land of capitalism there is a ton of red tape that makes getting residential solar harder than it should be. Here’s a short summary of the detailed article Sungevity CEO Andrew Birch wrote on this topic:

  1. Regulatory red tape and bureaucracy surrounding the type of hardware used, the installation requirements, non standardized permitting process and labor restrictions; 

  2. Solar panels in the US are overpriced. Today, this is due in large part to the fact that the majority of panels are imported from China, with significant tariffs applied. There is undoubtedly an opportunity to scale up domestic supply of solar panels which may also be impacted by the world’s focus on concerns around human rights abuses relating specifically to China and the solar supply chain.

  3. High customer acquisition cost due to the high price caused by #1 and #2, high customer cancellation rate due to #1, and the resulting 2-6 month wait time for a project to be completed. 

Ok so I don’t qualify for rooftop solar, how else can I support the movement? 

Sign up for a service like Arcadia Power which will match the dollars you send with your utility to renewable energy sources nearby, if you happen to live in an area with no renewable energy options they will buy renewable energy certificates on your behalf to offset your cost. Arcadia Power allows you to access what is called Community solar.

What is community solar? 

Imagine somewhere in your town there is an empty meadow the size of an acre. Next imagine you and your neighbors want to band together to cover that acre in solar panels to power your homes. Aha! That’s community solar. Put differently, “community solar” is where you elect to receive your energy needs (perhaps at a slight premium) to come from renewable sources only. If you subscribe to community solar you are agreeing to essentially fund renewable energy installations (wind, solar etc). Your utility makes sure that your pricing is governed by the pricing of that solar project and that your dollars flow to that project and not coal plants or other dirty energy sources.

In San Francisco our version of that is a program called Clean Power SF. With a quick call to PG&E you can sign up for the Supergreen program and elect to have all of your power come from renewable energy for just $3 more per month. 

That still doesn’t answer the question: “how do we get from 3% residential rooftop solar penetration to 20%?”

Here are some ideas I am exploring and would love to hear your thoughts on:

  1. Is there some type of financing model that would incentivize landlords to choose solar even though they are not the ones paying the utility bill? 

  2. Who is building the “easy button” for solar?

  3. Has anyone done an analysis of all the homes that should have solar (based on their electrical generating potential) but don’t (surely SunRun and Tesla must have done this)? 

  4. Thus far residential solar has been mostly a luxury item - how can we make it more accessible to the less affluent.