Source: Run On Sun, September 9, 2011
From “State of Solar California” post by Jim Jenal: In the first two installments in this series (Part 1 and Part 2) we looked at the most recent data from the California Solar Initiative (CSI) covering the first half of 2011 in Southern California Edison’s (SCE) service area. Using that data we identified trends in cost, equipment and system efficiency.
Who Charges What?
Here is a chart of the Cost per Watt for the largest installation companies in the SCE service area (you can click on the chart to see it full size):
First, let us give credit where it is due. The low end outlier is HelioPower, Inc., at $6.56/Watt, and they did it with an efficiency factor of 87% – second best of anyone on that chart. Nice.
But who is that way off in left field? Coming in at a staggering $13.32/Watt – a full $1.40 higher than their nearest competitor and more that twice what HelioPower is charging – is Galkos Construction, Inc., also known as GCI Energy, out of Huntington Beach. For that money, they must surely be offering only the most efficient and sophisticated technology, right? Not so much. To the contrary, the average installation efficiency for Galkos is only 84.9% – the second worst on the chart and well below the average of 86.11%. In fact, 99% of the time Galkos appears to use Sharp panels – not exactly an exotic solar panel brand – and in particular the Sharp ND-224UC1 panel (66.5%). A quick Google search reveals that the Sharp ND-224UC1 can be purchased, at retail, for $2.65/Watt or less. Given that Galkos handled 400 projects in this data set, it is hard to believe that their price for all of their equipment, particularly the Sharp panels, would not be not heavily discounted.
Quality, of course, is important, and the data does not reveal – though the Internet hints at – the quality of installations from Galkos. Here is how the company describes its own product offerings (from the “Services” page of their website):
Solar by GCI [Galkos Construction, Inc.] Energy
GCI Energy is the largest solar company in Southern California with over 30,000 customers. So you get the most knowledgeable professionals, excellent customer service and a better price.GCI Energy solar offers the highest efficiency solar panels on the market – those manufactured by Sharp. With Sharp Solar Panels, GCI Energy can tailor a solar panel installation to your specific needs and lifestyle, so you get maximum performance without a maximum investment.
Does Galkos actually have 30,000 solar customers? Certainly not (nobody does). Are they providing “a better price”? It is not clear what their standard of comparison might be – but their price is not better than any of their major competitors in that chart. And of course, the statement does not define what they mean by “the highest efficiency solar panels on the market,” but it seems unlikely that Sharp would make that claim. Here’s one chart that concludes that they couldn’t (note the efficiency of the SunPower and Sanyo panels first, then search for Sharp).
All we can say in response is, caveat emptor.
Oddities – SolarCity
Now we turn to the Oddities section of this post. Unlike the outliers, which were always of interest to us, we were not looking for the oddity we report here – it literally just jumped out at us.
Sold versus Leased
Question: What is the difference in reported cost between systems sold directly to the end customer and those that are leased (i.e., have a third-party owner in CSI parlance)?
The initial difference that we stumbled upon was so startling that we knew we needed to narrow our focus and control for as many variables as possible to isolate that one factor. To achieve that end we restricted the data to those residential systems (i.e., between 1 and 10 kW) that were “pending” in the CSI/SCE data (thus, the newest proposed systems in the data which, based on our Part 1 analysis should mean the lowest cost systems). That way our project sample would be as homogenous as possible, eliminating cost variations based on system size and timing.
Given those restrictions, the top 5 installation companies in which the system is owned by a third party are: Verengo (482 systems), SolarCity (468), American Solar Direct (124), Sungevity (99), and HelioPower (63). Of those five, only two also have direct sales projects pending: Verengo (7) and SolarCity (9). Let’s see how they compare:
What is going on here? For Verengo, as the number of systems increases – which it does in going from sold systems to leased systems – their cost per Watt decreases – which is what we would expect. But not so for SolarCity – even though they are leasing 50 times as many systems as they are selling, their cost for the leased systems went up – way up – as in up by $3.12/Watt!
For the complete post by Jim Jenal of Run On Sun, please link here: http://runonsun.com/~runons5/blogs/blog1.php/solecon/state-of-solar-california-part3