Simulating the Sun – Using Analytics to Expand Solar Markets

Installations of solar systems that generate electricity are coming down in price due to materials innovations and manufacturing efficiencies.  But it’s been a challenge to wring costs from the part of the value chain that is focused on business origination – identifying and marketing to qualified opportunities, conducting site assessments and system design, and financing the projects.   It is labor-and time-intensive work.  According to David Levine, CEO of Geostellar, a solar installer can expend an average of $4000 per deal on these activities.  For the average 4kW home, that works out to be about $1/watt, or 25% of the total installed price.  His company has an innovative answer that harnesses the power of data to improve operating efficiencies for business origination activities.  

Residential and commercial solar installations at the sales proposal stage require data about the best rooftop or ground potential for harvesting solar energy, coupled with detailed knowledge about utility rate structures, load profiles, and incentives like renewable energy credits (RECs) and net-metering and/or Feed-In Tariffs (FiTs).  These proposals need data about local zoning ordinances, and the impacts of vegetation and structures such as chimneys on overall solar productivity.  This data is extremely siloed, meaning it exists in a variety of unrelated information sources and is difficult to aggregate and ensure overall consistency.    

Geostellar uses advanced data analytics that include proprietary predictive algorithms to simulate the sun in 15 minute increments that account for atmospherics, slope and orientation of rooftops or ground, and shadowing from obstructions.  Their geomatics (geographically-referenced data analytics) solution estimates the solar energy production potential for any site.  The solution breaks down the silos between various sources of rates, building codes, and financial data to calculate internal rates of return and prioritize sites for marketing or deployment.  And most importantly for solar installers, the solution delivers a 75% drop in the origination costs to about $1000 per home. 

That’s good news for states like California, which just increased the cap for net metered solar generation and whose investor-owned utilities have aggressive renewables generation targets to meet by 2020.  It’s also good news for property owners (individuals to REITs), utilities, and companies that install or finance solar equipment.   Cost reductions make solar more feasible for a larger number of properties.  And not just solar technologies for generation of electricity.   Geostellar’s solution has equal applicability for determining the best insolation and ROI potential for solar water heaters, solar attic fans, and solar pool heaters – energy efficiency and storage plays.   

Knowledge is power, and that’s never been a truer statement than now as we see more innovative ways to apply advanced data analytics in the Smart Grid.   This detailed knowledge helps consumers become prosumers, and the proliferation of these technologies in the distribution grid will drive demand for other Smart Grid-enabling technologies and services, such as community and residential energy storage and companies that serve as energy négociants.

Knowledge is also money.  The Geostellar solution produces the sort of data that is the equivalent to the crown jewels of the oil companies – their maps of oil and gas potential.    That’s one reason why they recently closed a Series B investment round led by NRG Energy.  As quoted in the June 5 press release, NRG’s Denise Wilson, Executive Vice President of NRG Energy and President, Alternative Energy Services stated that “Educating and informing the public on the solar value of their properties is an important first step in creating a thriving market for clean, green and renewable energy solutions.”  That’s a Smart Grid impact that will be profoundly influential in transforming consumers into prosumers.