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Homeowners join forces to save on solar panels

Group buying with One Block Off the Grid can drive down solar panels' upfront costs.

(Page 2 of 2)

When Lortz installed nine panels on his roof in San Francisco, he wound up only paying 25 percent of the system's original cost. He still paid several thousand dollars, but the 1BOG discount, local rebates, and the 30 percent federal tax credit ensure that it'll take much less time for his investment to turn profitable.

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In some cases, Llorens says, group bargaining can actually create reasonable markets where none existed before. He points to New Orleans. 1BOG had initially written off the city. Too many hurdles; too many easier markets for the young company to focus on first. But enough residents rallied behind the group that the prospects changed.

"I wouldn't have thought it was possible," says Llorens. "But pretty soon we realized: we'll have to go there."

Once 1BOG is ready to dig in, they survey the solar contractors in an area and draft a shortlist. Llorens and his crew look at each company's history, technology, prices, its willingness to apply government incentives immediately instead of during tax season, and the likelihood that the company will still be around in a decade to repair aging solar panels. They then approach the top contenders and ask them to compete to be the group's official provider in that metro area.

This is where 1BOG makes its money. The final contractor agrees to pay a finder's fee for gathering the group of homeowners.

To help get as large a crowd as possible, 1BOG attracts members with walkthroughs, seminars, and some fancy online tools.

By entering his address into the company's website, member Chris Varner could see a bird's-eye image of his house in Arvada, Colo., just outside Denver. The 1BOG website then let him select a segment of his roof – to see how many panels would fit – and include information about his current energy diet – to estimate how much money he could save by going solar.

"There's also a monitoring system which tracks how [the solar panels] are doing throughout the day," says Mr. Varner, an electrical engineer who does contract work for NASA. This online tool works from any Web browser, allowing you to check in from the office or by some cellphones.

Varner installed his 20-odd panels shortly after Christmas last year. Approaching the anniversary, he reports that there have been no real hiccups along the way. Eight to 10 inches of snow covered his roof last winter, blocking any sunlight. But as the snow melted to around four inches, the solar panels came back to life and eventually resumed full efficacy.

"I worried that a hailstorm might break [the panels] – we get those around here," says Varner. "But the [installation company] said that the glass is so hardened that it's rare for hail to do any damage."

Both Varner and Lortz still receive utility bills each month – it's smart to keep a grid connection as a backup.

Varner says he will likely end the year producing slightly less than he used. Lortz expects his panels will regularly overproduce, but his power company has not yet set up a way to pay him for the extra electricity he feeds into the grid.

While 1BOG likes to evoke the image of homeowners banding together as a community, most of the interactions at this point are just between the member and the contractor, with 1BOG as an intermediary. Most members never meet one another.

Llorens says he's experimenting with more formal meet-ups, beyond the occasional information sessions. But for now, he's happy leaving the community aspect as a money-saving business model instead of a potluck organizing committee.

"It's the idea that first attracted me – coming together, you know, pooling, getting a large base of potential users," says Varner, who does actually know another member: "My next-door neighbors. I recommended it to them."

[Editor's note: The original version of this article misspelled Chris Varner's name.]