People are more likely to click “Going” on Facebook events when they see their friends are attending too. Both online and offline social networks can be great motivators to buy products and attend events. Solar group buy programs leverage that type of peer-to-peer purchasing to add solar to a swath of residential rooftops in specific cities or neighborhoods. These programs lead to discounts for consumers, jobs for installers and a kick-started solar program in the community.
Solar group buy programs are initiatives to gather groups of people in a community together, teach them about solar, then give them a time frame to sign up to get solar installed on their rooftops at a standard discounted rate by an installer or multiple installers selected by either a nonprofit or group of volunteers.
Programs are typically initiated by cities or utilities, then administered by nonprofit organizations. Utilities can be motivated to initiate group buy programs to meet RPS requirements or simply because they are progressive and listen to customer requests for more solar, according to Linda Irvine, program director of Spark Northwest—which runs group buy programs in Washington state—and co-author of NREL’s Solarize Guidebook.
The nonprofit organization typically performs the role of community organizer, marketing firm and objective solar expert. In some cases, the nonprofit even checks the viability of solar on particular rooftops by searching them on Google’s Project Sunroof. This saves time and money for the chosen contractor or contractors, who usually only need to come to the community education events, do roof inspections and then install the panels. Contractors are able to offer participants a discount because the nonprofit handles marketing, and installing many jobs at once means fewer truck rolls and enables bulk purchasing of materials at a cheaper rate.
For consumers, group buy programs offer helpful guidance through a typically first-time purchase that requires a lot of information on materials, payback and state policy and incentives. Nonprofits host solar workshops at community centers and libraries where residents can learn about solar without pressure to commit.
Installer perspective on group buys
Burke O’Neal, owner of Full Spectrum Solar in Wisconsin, has been the selected contractor for four Wisconsin group buys, three of which were MadiSUN group buy programs administered by nonprofit renewable advocacy group RENEW Wisconsin.
He said while group buys aren’t highly profitable, they are a sustainable way to add jobs to Full Spectrum’s docket.
“For us, it’s worked out well,” O’Neal said. “When I costed the projects, the margins are a little bit smaller, but we’re doing more work and we have less overhead associated with them.”
O’Neal is a fan of group buy programs. He said he liked the extensive contractor selection process that looked at references, brands and models of specific equipment, employee licensing and more.
“What I appreciated about these group buys is that they were looking for a contractor that offered the best overall value and wasn’t necessarily a fight to the bottom for the lowest price,” O’Neal said.
He said on some commercial projects he’s done, the RFPs have been much less involved, and they sometimes resulted in the cheapest contractor being selected over the best value contractor. In some cases, Full Spectrum Solar got a call to correct the mistakes made by the lower-quality contractor that is now out of business. The group buys he’s been through have been much more thorough.
“With a group buy, a lot of people feel very comfortable with the research and screening the administrators have done, so a higher percentage of people that have good sites go forward with a project than would otherwise,” O’Neal said.
Although value seems to be of highest import to the Wisconsin projects O’Neal has worked on, he still recognizes that it’s important to offer lower pricing than he would typically offer—but the price must still be competitive in the market. Full Spectrum Solar typically offers a single standard price per watt for group buys, with additional adders for things like replacement of an old electrical box if it’s out of code.
O’Neal said in 2017, Full Spectrum Solar would have probably done about 100 residential installations anyway, but the group buy added about 30 projects to its workload. He said maybe 25% of those 30 would have gone solar if it weren’t for the group buy—but the rest were motivated by the program.
He sees group buys as positive programs for communities overall, but he does acknowledge he’s a bit biased.
“I might not be so rosy in describing this if we hadn’t had a good level of success in winning these,” O’Neal said. “When I first was involved in group buys, I was more worried about, you know, what’s the effect on the market, and now I think it’s relatively small.”
Full Spectrum Solar wasn’t selected as the installer for a group buy organized by the Sierra Club a few years ago, but the community solar marketing still resulted in more calls to the contractor, whether it was from people within the group buy looking for a second opinion or from people in communities outside the group buy now interested in going solar.
O’Neal said that typically even after a group buy ends, Full Spectrum Solar steadily receives calls from neighbors who notice the solar in their communities and want to learn more.
“I think in the long run, the greater visibility and greater saturation of projects lifts the whole industry,” O’Neal said.
Different group buy models
One of the more familiar group buy programs is Solarize.
Since forming in Portland, Oregon, in 2009, Solarize programs have taken place in 28 states. Yale published a study on Connecticut’s Solarize program (Solarize CT) and found after Solarize CT’s first three-year campaign (2012-2015), the number of solar homes in the state grew from about 800 to over 12,500.
Lots of other nonprofits have spearheaded their own similar campaigns. RENEW Wisconsin has worked with the city of Madison to put on its MadiSUN group buy program for three years. RENEW Wisconsin has a contract with the city which pays it to perform the administrative work of the group buy, including organizing the meetings, selecting the contractors and doing the outreach.
In Wisconsin, solar installers are not evenly distributed throughout the state, so group buy programs can bring solar to communities outside the normal range of a contractor, said Michael Vickerman, program and policy director for RENEW Wisconsin.
“Without the group buy, there would be far fewer jobs coming out of Jefferson County,” Vickerman said. “It basically spreads solar more efficiently into the outlying areas.”
RENEW still tries to select an installer that is close to the community, so it’s a matter of traveling maybe one county over for the group buy program.
Vickerman sees the MadiSUN program as a great way to keep business local. In its RFPs, it looks for contractors that also provide servicing—another reason close proximity is key.
Usually the selected contractors are medium-sized and local, with around 10 to 25 employees, Vickerman said. The chosen installer must be big enough to handle a large influx of customers at one time.
Another nonprofit is spearheading its own version of group buy programs. Solar United Neighbors was formed as a group buy program in the Mount Pleasant neighborhood of Washington, D.C., in 2007. Since then, it has helped over 2,500 homeowners across the country install over 19,000 kW of solar capacity.
SUN calls its group buy programs “co-ops” and focuses on letting the people lead the way. By activating the community throughout the process, SUN hopes to create a coalition of solar supporters.
“We see it’s really important that people feel like they have a role in their decision to go solar, because once they do, they learn the rules around the policies and are much more motivated to take action to support policies that help solar,” said Ben Delman, communications director for SUN.
SUN often initiates co-op programs in areas that need serious help defending “basic solar rights” like net metering—places like West Virginia and Ohio. It launched one in Florida to increase solar awareness in a state that’s known for sun but needs community support to push back on utility and legislative reluctance to solar. Delman points out the local League of Women Voters was instrumental in launching a successful program there.
Delman said SUN chooses to launch co-ops based on where it can help the market grow or where there’s already an interested bunch of solar supporters and it can increase those numbers and motivate a larger group to fight for pro-solar policies.
One of the keys for group buy success is empowering the community itself. While some group buy programs have the nonprofit organization in a larger role of selecting the contractor and marketing to the neighborhood, the nonprofits often form committees of community members to lead the program.
Contractor selection is one of the most important functions of the team of volunteers. Irvine said that ideally selection is spearheaded by volunteers who are either interested in purchasing solar through the current group buy or who have already installed solar on their homes and have a stake in the process.
Spark Northwest supplies the group with an RFP template, helps edit it to reflect their needs, then sends it to local contractors on behalf of the group. When bids come in, Spark Northwest doesn’t vote on them, but does give the group a scoring rubric they can use to evaluate the proposals. Then the committee of volunteers makes the selection with the nonprofit’s consultation.
“We’re not responsible for the final selection, and I would feel like most nonprofits probably wouldn’t want to be responsible for that final selection,” Irvine said. “They would want the committee to be responsible.”
Nonprofits can also help fact-check more sophisticated contractor claims on RFPs. Irvine said in one instance, a contractor said it would use microinverters because they are more efficient. Spark Northwest was able to clarify to the group that the data doesn’t show that’s true in every installation scenario.
Effects on the market
Spark Northwest gives committees a rubric to make sure they are choosing the best all-around contractor—which doesn’t always mean the one that offers the lowest price per watt. A common concern heard from local contractors not selected for a group buy program is the fear of installation becoming a race to the bottom, especially if the chosen contractor is a huge company like Sunrun or SolarCity. Typically, smaller contractors win the job, though.
“In any particular campaign, the contractors who don’t get chosen complain that it’s bad for them, but then they bid on the next campaign and they get chosen [and] then they’re like, ‘This is great,'” Irvine said.
Irvine said she hasn’t seen any Solarize programs in Washington turn into a race to the bottom. Though she admits she’s “probably biased because we do these,” she said Spark has administered five Solarize programs in five different Seattle neighborhoods using five different contractors, and all of them are still in business.
“They were definitely busier during Solarize, and then less busy afterwards, but continued at a healthy rate,” Irvine said.
Instead of stamping out competition, Irvine sees Solarize programs as a way to open up and jump start a new market. She said there has to be some initial interest in solar in the area to create the core group of sign-ups and volunteers. Then, those who have considered solar in the past may be motivated to jump in to the program since it is low-cost, endorsed by the nonprofit third party and laid out in easy-to-understand and objective town halls.
“If you get a core number of installations out there then they can start inspiring others,” Irvine said.
Solar group buys can help jump-start a local solar market and activate a pro-solar community if they’re administered in a fair and balanced manner, choosing the highest-value local contractor for the job and not just the one who will do it for cheapest.