How SolarCity Makes Energy Efficiency Easy

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Courtesy of SolarCity

A SolarCity technicians points out a smart thermostat. The start-up is offering energy efficiency plans for homeowners.

Wendy Almukdad knows energy efficiency. The Bay Area electrical engineer works for the California Public Utilities Commission and before that the federal government. She ran energy efficiency audits for federal buildings. But when she and her husband bought their first house in San Bruno, she was surprised at how difficult it was to figure out how to make the 70-year-old house more efficient. She wanted to get a better heater—the home was cold and damp, but heating and energy cost as much as $160 a month. “It was pretty difficult initially,” says Almukdad. “I was kind of lost.”

That’s where SolarCity entered the picture. The startup specializes in supporting and financing solar installations, and have put solar on more than 25,000 homes around the country. SolarCity’s business model is simple: it wants to make the act of buying and installing solar power as easy as any other home upgrade, while allowing homeowners to pay it off gradually rather than all at once. Very quietly, though, SolarCity has been doing the same thing with energy efficiency—providing home energy audits, and then working with homeowners to upgrade their heaters, air-conditioners and other energy sucking devices. That’s how Almukdad ended up overhauling her San Bruno home, adding a new furnace, crawl space insulation and subterranean fan to control humidity. At an upfront cost of $30,000—much of which was covered with state and local rebates—Almukdad managed to reduce her utility bill to closer to $70 a month, while making her home that much more comfortable for her husband, who suffers from severe allergies. “It’s really been worth it,” she says.

Now SolarCity is doubling down its bet on energy efficiency, extending its services to the East Coast and offering new home energy loans that will help homeowners defray the large upfront costs of energy efficiency upgrades. “”We already have 5,000 projects completed or close to completion on energy efficiency,” says Lyndon Rive, SolarCity CEO. “Now we’re going to get bigger.”

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What really sets SolarCity’s energy efficiency service apart is its depth. The company charges about $300 for a home energy audit like the kind Almukdad had, which identifies where improvements can be made in order to cut energy waste. Rive says that most similar audits use the hottest and coldest days a house might experience over the course of a year. But that—ironically—isn’t the most efficient way to go about it. Using a software system that makes more than 4 billion calculations, SolarCity simulates the energy profile of the house as it would be every 15 minutes for an entire year. That provides much more granularity—and more savings. “The accuracy of that data is just so much better,” says Levi Blankenship, SolarCity’s energy efficiency manager. “We can tell you exactly how much you will save.”

The other obstacle is the up front cost for those improvements. As Almukdad found out, it’s not cheap to make your house more efficient, and even though you’ll save money over the long-term, not every homeowners can afford to shell out that money up front. So SolarCity is working with Admirals Bank—a lender based in Boston—to provide homeowners with multiple financing options, including 10-year loans. “It allows them to pursue a financing option that makes sense for them,” says Blankenship. It’s a reminder that financial solutions are as important as technological and political ones in sustainability.

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