North Carolina Startup Clean Energy For Us Scales a ‘Solarize 2.0’ Business Model
In late March 2015, RMI hosted the second annual eLab Accelerator. Described as a bootcamp for electricity innovation, the four-day intensive work session brought together 12 teams from across the country—from New Mexico to Alaska and California to New Jersey—working on new business models, energy innovation districts, and new customer solutions. Together with RMI facilitators, Reos Partners, and a panel of expert faculty, they sped progress on their respective efforts. This is one of their stories.
Katie Bray is a social entrepreneur who wants to accelerate the adoption of clean energy in the Southeast. A year and a half ago she founded Clean Energy For Us (CE4U), a North Carolina-based company that harnesses the power of group purchasing, community outreach, and education to make renewable energy systems and energy efficiency projects easier and more affordable for customers.North Carolina doesn’t permit third-party ownership of residential rooftop solar, such as what SolarCity promotes and which accounts for about 90 percent of new installs in states such as Colorado. So customers must buy and own the solar on their rooftop. Making that solar cheaper, easier, faster, and more convenient is important. Which is where Katie Bray and CE4U come in. Like the Solarize model in which groups of homeowners or businesses join a campaign to collectively negotiate rates and competitively select an installer, organizations and community groups can apply to host a CE4U campaign. CE4U provides the management and support to cut through the barriers—such as cost and red tape—to renewable energy and energy efficiency adoption.
Within the first year of business, CE4U had started 6 local campaigns, and catalyzed over 300 new solar PV installations and 70 energy efficiency projects throughout North Carolina. However, Bray felt trapped in the start-up stage. She wasn’t paying herself a living wage but was putting all her revenue back into the business. She desperately wanted to scale her efforts but didn’t know exactly how. That’s why she attended RMI’s second annual eLab Accelerator.
With a team of five other energy innovators from around the state—Next Climate, Duke Energy, the City of Asheville, Ullman Consulting, and Collaborative Solar—and RMI Manager Roy Torbert as the facilitator, Bray had a chance to question a lot of the assumptions she had been making and come up with some new ideas. “e-Lab Accelerator was the first opportunity I had to step back and get out of the day to day chaos and focus on what’s working and what’s not,” says Bray. “I left Accelerator with a concrete list of things I need to do to enter the next phase of scaling and building a long-term business.”
A Sustainable Business Plan
CE4U partners with local nonprofits to run limited-time campaigns that help homeowners save money on electricity bills, reduce pollution, and support local projects that improve the equity and environmental health of their community. CE4U uses a group-purchasing model to negotiate a price discount for interested homeowners and educates them on every aspect of a solar power or energy efficiency purchase. CE4U’s software assesses whether the homeowner will benefit from these technologies and, if so, matches them with a local company who has also been vetted and pre-qualified. By acting as the interface between customers and contractors, CE4U is able to streamline the process on both ends of the equation. For customers who want to go solar, CE4U offers better prices, pre-qualified installers, customer service, and a streamlined, faster install. For vetted installers in the roster, CE4U handles customer acquisition and customer service, so technicians can focus on what they do best (and want to do)—install solar PV systems.
“CE4U is really filling the gap between residents who want to do the right thing and the installers who provide those services,” says Maggie Ullman, of Ullman Consulting and former chief sustainability officer of Asheville. “It’s easy to hit a wall and stop. Katie says ‘Here’s a ladder, let’s get over that barrier.’”
When customers sign a solar contract with an installer, the installer pays a small percentage to CE4U as a commission, but that number was too small, Bray discovered. “e-Lab Accelerator helped me realize I had been undercharging for our services,” Bray says. “I realized all the other ways we’re creating value for installers and companies and that we need to charge for that value as well.”
Revising her revenue structure was only one outcome of Accelerator. Bray also realized the need for an advisory board, additional staff, and funding to allow her to step out of the day-to-day role so she could work on strategic planning and create a long-term business plan. RMI’s Torbert notes “Katie is really the ‘tip of the spear’ when it comes to driving the renewable and efficiency transformation. She deals with the real problems of getting homeowners to adopt efficiency and renewables, but without time to think about direction and purpose wouldn’t be able to make as big of an impact.” CE4U developed goals for the next couple of years including catalyzing 100 more solar installations and 100 more energy efficiency projects in the next year, expanding to more communities, and to be cash flow positive by 2017.
Ullman, who joined Bray at Accelerator, is now chair of the CE4U advisory board. “I came to Accelerator because I really believe in Katie’s work,” Ullman says. “You can only go so far when you’re going alone. I felt she needed a team to help her go to the next level, and Accelerator provided exactly that.” Ullman feels that e-Lab Accelerator created an environment where the CE4U team had time to really dig into big questions, sort through them, and scale from deep level concepts to high-level pitches, helping Bray hone her message. “At Accelerator, I had the privilege of guiding our team to both improve an already successful organization (CE4U), and also letting Katie develop her own vision of a transformed clean energy sector,” said Torbert. “Watching her present to the other teams was a particularly profound moment for me.”
The company has already made a lot of progress. Bray has submitted one grant for operational funds and has already phased the new revenue structure into a couple of current projects. Most installers and contractors are supportive of the new rate structure, because they realize the amount of value they are receiving from CE4U’s services. One contractor pushed back a bit on the increased rates but “Because of e-Lab Accelerator I was able to justify my rate, and he ended up accepting it,” Bray says.
The Power of Convening Changemakers
Another interesting outcome that shows the convening power of Accelerator were the connections made. There happened to be a team from Bray’s hometown of Ketchum, Idaho. The group in Idaho was impressed with Bray’s work, and Bray is now putting together a proposal for them and hopes to expand the CE4U program to that state. Another attendee of Accelerator was very experienced at running Solarize campaigns, and having access to her expertise was extremely valuable.
“What really sets Accelerator apart from other efforts is the folks that get selected are working on ground-breaking ideas,” says Ullman. “To be in a room with those kinds of people is powerfully inspiring and really hopeful. It made me feel like everything is going to be all right.”
In the past few years, North Carolina has gone from relatively dormant to the third-hottest solar market in the country. “What started as a one-time outreach campaign has quickly evolved into the largest marketplace for residential clean energy services in North Carolina,” says Bray. “Customers get an easier and faster installation at a lower price, and companies get clean energy customers who are educated and ready to go solar. This has proven to be the missing link in dormant markets and is radically scaling the entire clean energy industry.” To date, CE4U has resulted in over $9 million new clean energy investments, 2.5 GWh of clean energy, and 30 new green collar jobs in North Carolina. With the help of e-Lab Accelerator, Bray expects those numbers to rise significantly in the following years.
First image courtesy of Shutterstock.