PESWiki.com -- Pure Energy Systems Wiki -- your publicly editable site about new energy technologies. Power to the people!





Directory:Citizenre Corporation

From PESWiki

Citizenrē Corp

Aims to makes clean energy, beginning with solar, affordable for everyone in the U.S., and includes affiliate incentives.

Citizenrē Corporation is setting out to manufacture, install, permit, own, maintain, and operate residential solar photovoltaic (PV) system through a franchise system, as well as sell such systmes to commercial accounts.

Homeowners will rent the system from Citizenre at a rate based on a both the nameplate capacity of the rented system and the average rates currently charged by the local utility, to make the system affordable for all. The rent is fixed for the life of the contract (usually 25 years) at or below their current electricity price, while Citizenrē handles the engineering, procurement and construction.

Citizenre maintains that it is NOT providing electricity, but renting the equipment so that homeowners can generate their own. Citizenre is NOT an electrical provider.

CAUTION 
Citizenre: A House of Cards? (http://www.renewableenergyaccess.com/rea/news/story?id=47419&src=PESWiki.com) - Jeff Wolfe asserts that the new multi-level distributor company that claims to be able to offer solar power at or below grid energy pricing toward the end of 2007 does not have its act together and is actually diverting solar customers away from real technologies to false hopes. (Renewable Energy Access; Feb. 12, 2007)
When the following concerns are addressed, then this caution statement may be removed
  • What is the name of the finance agency that will fund this launch (more than half a billion dollars)
  • Where is the funding agency's press release announcing this contract?
  • What solar technology are they using that can meet the price point required, taking all capital expenses into consideration?
Table of contents
1 About

1.1 Official Websites

1.1.1 Independent Direct Sellers ("Ecopreneurs")

1.2 Latest Developments

1.2.1 Original Timeline
1.2.2 Updated Timeline
1.2.3 Update, April 14, 2008

1.3 Overview

1.3.1 Additional Information

1.4 Citizenrē REnU program
1.5 Patents

2 Coverage

2.1 In the News
2.2 Comments

2.2.1 Commentary on Citizenre "Financing Team" Press Release
2.2.2 Not Meeting Challenges
2.2.3 Do Your Due Dilligence
2.2.4 Three pluses
2.2.5 Not tested in the field

2.3 Other Coverage
2.4 Forum
2.5 Related Approaches
2.6 Contact

3 See also
[edit]

About

[edit]

Official Websites


[edit]

Independent Direct Sellers ("Ecopreneurs")

[edit]

Latest Developments

CitizenRE was supposed to make its public debut with major announcements in late January, 2007. The information was to include funding partners, sales organizations, and insurance interests, all of which will be major, well-known names. They are running way behind schedule.

As of July, 2007, the company has delayed their announcement until Sept. 2007.

[edit]

Original Timeline

  • ~Jan. 2007, groundbreaking for 500 MegaWatt manufacturing facility. 6-10 more will follow.
  • ~Jan. 2007, funding partners unveiled
  • ~Mar. 2007, begin electrician hiring and training; Citizenre will be announcing a wind power option using the same arrangement. They will embrace newer and more efficient technologies as they become available as well.
  • ~Jun. 2007, begin customer facility review by technicians and contract signing
  • ~Sep. 2007, begin installation

The company expected to install 100,000 units on homes in their first year.

[edit]

Updated Timeline

  • ~Mar. 2007, funding partners unveiled
  • ~Apr. 2007, groundbreaking for 500 MegaWatt manufacturing facility.
  • ~Jan. or Feb. 2008, begin installation with reduced # of 2008 installations

The first two "updated" milestones have not been achieved as of July 25, 2007.

The expected timeframe for initial installations has slipped again to "mid-2008" as of August 22, 2007.

[edit]

Update, April 14, 2008

Citizenre has now revised its prognoses to start some time in 2008. The Ecopreneurs have been informed of a variety of reasons why the timeline has had to be extended (as for so many other large undertakings) and most agree that they are willing to wait.

The company has already made 2 BETA installs, which took less than a full work day to accomplish. This is one of the aims to reduce costs. 1000 more BETA installs are planned for this year.

At present (April 2008) there are more than 30,000 homeowners throughout the United States who have signed up their houses for a system. A large percentage of these have also signed the Forward Rental Agreement. Talking with these customers, Ecopreneurs find that they do not mind the waiting period, because otherwise they would not be able to even consider having a PV system because of the cost. Potential customers who can afford to buy a system are counseled on where to find information to buy their own system.

[edit]

Overview

Company says they will install and maintain a solar system with grid-connect on your home for a 1-, 5-, or 25-year contract, if you live in an area that supports net metering. The contract locks you into a set electricity billing rate that is at the level that your utility company presently charges. In addition to that, you pay a security deposit, which amounts to from $500 to $1000, depending on the KWP size of the system, and is reimbursed at the end of the contract period if the contract is not renewed.

After assessing your energy usage and roof profile, the Citizenrē solar designer proposes an installation that will be appropriate for your present energy usage. Because customers' usage will vary and most utilities will not pay for "overgeneration," Citizenre plans to dimension the systems to within about 90% of current usage.

Because of net metering, the customer's utility acts as the "battery" in the system. The customer's payment to the utility will also include the utility connection, which serves as an energy buffer, while payment for used electricity will most likely be within the lowest tiers of the company's billing system.

Customers have no up-front investment to purchase a system, while Citizenrē takes care of all installing and maintaining an entire system.

If you don't want to renew the contract when it expires, Citizenrē merely removes the system and returns the deposit with interest. If you want the system removed before the end of the contract, all you lose is the deposit. (This is not a lease that has a time limit that has to be fulfilled.)

If you move, you can either transfer the contract to the new owner, or Citizenrē will move the system once for free during 25-year contract. After that, a moving fee applies.

Damage to the system that is not a function of manufacturer defects needs to be paid for by the customer, but will be repaired by Citizenrē corp. Most homeowner's insurance will cover the systems.

The site explains the stipulations of the contract quite well, without getting bogged down in legalese.

[edit]

Additional Information

Source: Phone interview with Kendrick Coulter, one of three Executive Sales Directors for Citizenre. Interviewed by Sterling D. Allan on Dec. 29, 2006. Some of the information obtained in this interview is also reflected in other sections on this page.

The solar technology to be deployed by Citizenre is able to use a lower grade silicon, which they will manufacture, so there will be no silicon shortage issues. It is a polycrystalline material that achieves around 14% to 15% efficiency in converting solar to electricity. Where the company's technology excels is in the cost, which will be half of what other solar company's costs are in production.

Citizenre has been approaching numerous existing solar installers about franchising. In many cases, several of these "Mom & Pop" organizations joined together to qualify for a franchise. Additionally, there are 30,000 representatives from existing sales organizations waiting to come into the operation.

Citizenre's goal is that by the year 2025, 25% of the total residential power will be provided by solar power, not necessarily through Citizenre.

Considering the huge outlay required by the investing groups, you can imagine the extensive due diligence they have gone through to make sure that this business model is viable.

[edit]

Citizenrē REnU program

Claims:

  • No system purchase
  • No installation cost
  • No maintenance fees
  • No permit hassles
  • No performance worries
  • No rate increases

As of April, 2008, the company agrees that its initial time frame was set too tight (typical start-up error) but expects actual activity in 2008.

[edit]

Patents

The company claims to have 15 patents on the technology.


[edit]

Coverage

[edit]

In the News

  • Is the Sun Rising or Setting on Citizenre Solar? (http://pesn.com/2007/08/22/9500491_Citizenre_Finance_Team/) - Company that intends to rent out solar power at rates competitive with local utilities has announced its financial team, though it has not yet secured financing, and may not be able to given the present credit crunch. (PESN; Aug. 22, 2007)
  • The CitizenRe Scandal (http://www.danablankenhorn.com/2007/03/the_citizenre_s.html) - There are all the earmarks of a crash here. (Dana Blankenhorn; March 19, 2007)
  • Selling Homeowners a Solar Dream (http://www.wired.com/news/technology/0,72752-0.html?tw=wn_index_1) - Wired reviews the affordable solar dream concept along with the skeptical views about whether it will actually happen at this time using this approach. House of cards, or wave of the future? (Wired; Feb. 21, 2007)
    • Slashdot discussion (http://science.slashdot.org/article.pl?sid=07/02/24/0410258) (Feb. 24, 2007)
  • Citizenre: A House of Cards? (http://www.renewableenergyaccess.com/rea/news/story?id=47419&src=PESWiki.com) - Jeff Wolfe asserts that the new multi-level distributor company that claims to be able to offer solar power at or below grid energy pricing toward the end of 2007 does not have its act together and is actually diverting solar customers away from real technologies to false hopes. (Renewable Energy Access; Feb. 12, 2007)
  • Brad's blog raises questions (http://ideas.4brad.com/citizenre-real-or-imagined-challenge) - Recently I opened up a surprising can of worms with a blog post about CitizenRe (Feb. 20, 2007)
  • The Heated Debate over Citizenre  (http://www.renewableenergyaccess.com/rea/news/story?id=47453) - How an emerging company has created a storm of controversy in the world of solar energy. (Feb. 15, 2007)
  • All that is Renewable is not Green (3 parts) (http://www.solarkismet.wordpress.com/2007/02/08/citizenre-consultant-report-leaked-major-issues-revealed/) - “Citizenre Warnings & Red Flags: Immediate Action Required to Prevent a Complete Loss of Confidence and Severe Negative PR” (Feb. 8, 2007)
  • Citizenre responds to Solar Industry Concerns (http://www.bioneers.org/node/1302) - A few members of the solar industry have expressed their concern about business model. Here is the response from our CTO ... ("Bioneers.com" Feb. 7, 2007)
  • U.S. Homeowners Can Now "Rent" Solar Panels and Save Money (http://www.worldchanging.com/archives/005809.html) - The Delaware-based business has launched a program that allows customers to “rent‿ the panels for specified periods of time, paying a per-kilowatt fee that takes the place of the local utility bill. (WorldChanging; January 12, 2007)
  • Citizenre has a plan to bring solar to the masses (http://www.earthtoys.com/news.php?section=view&id=1976) - Citizenre Inc. has a plan to bring solar power to more people than ever before by renting solar panels to homeowners. The equipment is backed by a performance guarantee with no purchase, maintainence or installation costs. (Earthtoys; Dec 27, 2006) [press release]
  • Citizenrē Introduces Home Solar PV Rental Program (http://www.renewableenergyaccess.com/rea/news/story?id=46770) - Citizenrē's new REnU 25-year fixed rate residential solar electric system rental program allows homeowners in 40 states to choose green energy while eliminating the large upfront investment costs and premiums over power purchased from electric utilities. Homeowners "lock-in" their electricity rate for 25 year, while most electric utilities are increasing their rates 5% to 30+% every year. (Renewable Energy Access; December 7, 2006)
  • Citizenrē's REnU: A Solar Service System for Homeowners (http://www.treehugger.com/files/2006/11/citizenres_renu.php) - A few weeks ago, we took notice of General Motors' solar panels (http://www.treehugger.com/files/2006/10/general_motors_1.php): GM doesn't own them, but provides roof space to the company that does, and then buys cheaper solar electricity through a "solar service system" model. Now, that opportunity is available to homeowners who live
[edit]

Comments

[edit]

Commentary on Citizenre "Financing Team" Press Release

On August 21, 2007, New Energy Congress member and former CitizenRE associate, Dr. Richard George wrote:

Yesterday, Citizenre released a press release announcing their “financing team” that will help them raise funding. Citizenre does not have any funding. You don't make this announcement if you have already closed financing. If you have funding, this is not news.

My analysis from six months ago that Citizenre is a highly unethical attempt to prove that there is sufficient demand (e.g. FRAs) to justify financing remains valid. Unfortunately, Citizenre's timing is lousy and they are extemely vulnerable because they tried to sell first and only after they succeeded in selling, finance and build long-lead time infrastructure (PV and inverter manufacturing plant; thousands of installations dependent on equipment made in the plant).

We are several weeks into the worst credit crunch since 1973 and possibly 1929/1930. Lending has largely stoped - particularly for sub-prime and alt-a mortgages, jumbo mortgages, asset-backed securities, junk bonds, commercial paper, M&A takeovers, and pretty much all lending below AA or AAA. Major banks and investment banks have several hundred billion worth of loans made in the last couple of months (mostly for M&A deals and asset securitization deals) that they are unable to sell to investors without taking major losses. Everyone is scared and pulling back right now. For the little bit of lending that is available, credit spreads have increased by several hundred basis points. This means that if you were expecting a 5% interest rate in July, you may be paying 7% or 7.5% in August if you can still get the loan. Any assumptions about financing that are more than two weeks old have to be revisited. A month ago, GE Money was willing to finance PV systems for single family homes at rates between 7.5% and 14+%, but wanted 5 to 7 year terms. However, even then, they were more interested in commercial PV loans than residential loans. GE is still trying to value the collateral value of home PV systems - there are a lot of technical challenges and costs associated with removing PV systems and a used system may only have value for the first five years.

For Citizenre, they have the assumption that they can essentially give low interest, no documentation, 25 year loans to their customers (a lender's view of the FRA cashflows). This is essentially a sub-prime, unsecured loan, and any asset-backed security based on a pool of these FRAs would be extremely hard to value right now. The default rate on FRA's is unknown. Likewise, the cancellation rate and the effective duration of the FRA stream (e.g. how long the average customer has the system on their roof given the easy cancellation terms) are also unknown. Right now, investors do not trust the investment bank valuations of asset-backed securities because 1) there is really no liquid market for these, 2) everything is marked-to-model (where the model is an investment bank spreadsheet) based on investment bank assumptions that may be questionable and overly optimistic, 3) there are major conflicts of interest by the rating agencies and investment banks, and 4) there has been way too much fraud in this space (as much as 50% of all sub-prime loans may have been tainted by frauds committed by one or more of the parties involved - the borrower, the broker, the originator, the rating agency, the investment bank, the appraiser).

If you change the assumptions, Citizenre's model will break down. There are four major vulnerabilities to Citizenre in this credit crunch:

a) Customer Credit Worthiness Risk: Since no customers have completed credit checks, we don't know what percentage of them have prime credit. A significant portion of the 19,700+ customers may not have acceptable credit scores and their FRAs may not be financeable.

b) Interest Rate Risk: If Citizenre has to pay higher interest rates, their margins will decrease, making the service uneconomic for them to offer in some locations. This means that they either a) have to raise the rates they charge (which could make the KWH cost of electricity higher for their customers than they pay their utilities) and/or b) have to exit certain markets - particularly those with low interest rates. Again, a large percentage of customers could be lost if entire states have to be abandoned or if Citizenre is forced to change the rates promised.

c) Geographic Risk: Lenders may avoid investing in asset-backed security loans from certain regions that are particularly hard hit by real estate mortgage foreclosures. 50% of the sub-prime mortgages in the past three years were issued in California and Florida. Unfortunately, California is the most attractive solar market in the country (~80% of the US solar market).

d) Contract Language Risk: Lenders may object to certain terms in the FRA contract and require changes. The financing term has the greatest impact on the economics of FRAs. If lenders require shorter terms (e.g. 5 to 7 years, instead of 25 years), Citizenre cannot offer FRAs at their current rates.

Even if we assume that this deal was fundable in the second quarter of this year, today it is toxic and unfundable given the credit crunch. When one adds the other risks in the deal (execution, inexperienced management team, technology risks, manufacturing risks, MLM marketing scheme), it becomes even less likely to get funded.

Structured Growth Partners is a no-name, two-person fundraising company with no history, bios, or verifiable information. It is unlikely that they are registered with the SEC as a broker-dealer (legally required if they take commissions or success fees from Citizenre on any funds raised). If you are trying to raise hundreds of millions or billions of dollars, you don't use a no-name firm, you use either a major investment bank or specialty boutique (energy) investment bank with a proven track record in the field. The little advisors are typically used by startups and small businesses to help them get between several hundred thousand and several million dollars. They also frequently want excessive fees that scare away legitimate investors - particularly venture capital firms.

[edit]

Not Meeting Challenges

On July 25, 2007, New Energy Congress member and former CitizenRE associate, Dr. Richard George wrote:

There is no tangible or verifiable evidence that they have any funding, plant, equipment ordered, or technology.

They still have not paid the $500,000 to the sale reps promised to be paid when they reached 10,000 FRAs.

I seriously doubt they have been able raise any capital beyond several hundred thousand dollars of angel investor funds.

My best guess from six months ago still stands - that Citizenre is a highly unethical fishing expedition trying to prove demand exists so they can raise capital. I am somewhat surprised that they have lasted six months since Jeff Wolfe of Gro Solar, myself, and others raised serious concerns and documented assorted red flags about Citizenre.

Citizenre has yet to release any official press releases or release any data that could be independently verified or confirmed that addressed any of the concerns raised to date. Effectively, their response is to "trust us". The cult-like following and lack of critical thinking that they have in their MLM sales force is scary.

Even if they succeeded in raising the capital (very doubtful), there are a large number of flaws and technical challenges that must be successfully overcome for Citizenre to be a viable business model. These challenges include

  1. successfully building a manufacturing plant, obtaining the necessary equipment, staffing it, training the employees, and obtaining quality certifications - something that would normally take 18 to 24+ months;
  2. obtaining UL 1703 certification for their PV modules;
  3. obtaining UL 1741 certification for their inverters;
  4. keeping their initial customers and their independent sales force happy for another 18 to 24 months before the first installation happen;
  5. successfully scaling and implementing the process to make solar ingots from industrial silicon while obtaining acceptable quality;
  6. building an installer network throughout the country;
  7. maintaining their access to capital to obtain the several billion dollars per year of capital required to operate their rental network;
  8. obtaining the senior management and technical talent needed to successfully implement such a complex set of projects (especially given the inexperience of their senior management team and CEO);
  9. successfully and profitably sell rentals and install them in 40+ states even though solar is economic after subsidies and incentives in at best 25% of them; and
  10. proving that they are able to achieve their claimed economies of scale that are greater than those achieved to date by existing manufacturers such as Suntech, Yingli Solar, Sharp, etc. who already operate vertically integrated PV manufacturing operations at or beyond the scale envisioned by Citizenre.
[edit]

Do Your Due Dilligence

On July 25, 2007, a concerned citizen wrote:

After about a year of receiving inflated figures, and broken promises about capacity, plant construction dates, and supposedly silicon-saving technology, not much has been heard from Citizenre lately, why is that? are they laying low, before the big roll-out? Is it another MLM scam, like the money Rob Styler made on the Lifewave Patch scam? Do your research and dillegence!!!

[edit]

Three pluses

On Dec. 29, 2006, New Energy Congress member, Noah Seidman wrote:

What an incredible company (Citizenrē Corp). The philosophy is "why buy land when you can use someone elses". Kills three birds with one stone; provides electricity to the homeowner, makes profit for the company, effects environmental issues positively.

[edit]

Not tested in the field

On Dec. 21, 2006, a New Energy Congress member wrote:

I’m concerned about the ability to meet demand, the long wait until systems will be installed, and the performance of their AC-output solar panels in the field. I’m told their funding partners won’t be unveiled until some time in January, so we’ll see if they really have the funds behind them to handle the growth.

[edit]

Other Coverage

[edit]

Forum

[edit]

Related Approaches

  • Home Depot Selling Solar to Mainstream America (http://www.treehugger.com/files/2006/10/selling_solar_t.php) - Home Depot (http://www3.homedepot.com/webapp/wcs/stores/servlet/ContentView?storeId=10001&pn=HDCOM/InstallationServices/Solar/SolarLanding) has teamed up with BP Solar to provide affordable solar installation service to customers. Financing options available, as well as free, in-home consultations. "Now you can save money on your electric bill, increase your home's value and make the world a cleaner place." (TreeHugger; Oct. 24, 2006)
  • LiteSolar (http://www.litesolar.com) - doing a similar thing as above, but for commerical buildings and apartments.
[edit]

Contact

http://citizenre.net/web/index.php?p=contact

Leaning on associates to serve as the direct marketing function, the company site does not list a direct email or phone number for customers, but expects people to contact the person that referred them.

Their Delaware address is registered and can be looked up at https://sos-res.state.de.us/tin/GINameSearch.jsp

THE CITIZENRE CORPORATION
Contract Administration
501, Silverside Rd. suite 69
Wilmington, DE 19809

[edit]

See also

Directory:Solar

- Other Directory listings • Latest • A-I • J-R • S-Z • Tree • News
- PESWiki home page

Retrieved from "http://peswiki.com/index.php/Directory:Citizenre_Corporation"
Related

for sale . . .

for businesses . . .


more

See also