A Fascinating New Marketing Model?

Or a Green Enron? (Of course, Ken Lay, Enron's CEO, was pretty Green himself--hence his connections to John Kerry.) It is certainly different.

The company is called Citizenre, and instead of selling you solar panels, they rent them to you. The plan, according to this page, is that you sign a lease agreement with them for the solar system, which they come out and install. If I understand how it is supposed to work, the rent is supposed to be equivalent to about 20% of what you are currently paying for the amount of electricity that the solar system will produce. (They used $100 a month rent as an example.) And it looks like you also get the credit from your electric utility for any power that you produce in excess of demand.

If you expect electricity costs to go up in the future (which seems pretty near certain, unless someone locks up the environmentalists, and nuclear power plants go up everywhere), then signing a 25 year lease on the solar panel system is a pretty good deal. The worst that you lose if you decide to drop out of the plan is your security deposit on the equipment--which in their example, was $500.

My first reaction was: Where do I sign? (The answer is, here.)

My second reaction was: How can they do this, unless the system rent is pretty outrageous? A large enough system to make even a part of my electricity requirements is tens of thousands of dollars.

My third reaction was: They haven't actually started manufacturing the systems yet:

Q. I understand that your manufacturing plant is not completed yet, is that right?

A. Correct. The first systems will be ready to install in late 2008 and throughout 2009 our facility will continue to grow. This means that our supply of panels and equipment will increase steadily in parallel with the growth of our installation network throughout 2008 and beyond.

Since you aren't asked to write a check until the system is almost ready to install, it doesn't sound like there's much of a way to get scammed by this. But I do worry that some starry-eyed environmentalists may be in over their heads with this plan--which means, if they ever actually get these systems built and installed, they will all get taken away in the ensuing bankruptcy.

Or maybe there's something sneaky that they have buried in the fine print that I am missing.

UPDATE: I just heard from one of their representatives. Apparently, it only makes business sense if electricity from the local utility costs more than seven cents per kilowatt-hour--which is not the case here, yet. I suppose it might be better to wait for the, any day now, $0.99/watt photovoltaic cells to come on the market. At that point, I can justify the capitalization myself.