Costco helps kick- start solar power market

Published 4:00 am Sunday, December 26, 2004

One indication that solar power is moving into the mainstream is that Costco is beginning to offer home solar-power systems direct to consumers.

And Bend has a player at the forefront of this movement – PV Powered. The Bend company that makes a major part of those solar-power systems just struck an exclusive marketing deal with the warehouse giant, according to Bill Taylor, founder of PV Powered, which makes photovoltaic inverters used to convert sunlight into electricity.

The company secured the deal in partnership with energy-heavyweight BP which recently changed its tagline from British Petroleum’ to Beyond Petroleum.’

For this and other reasons, PV Powered, which has about 25 employees in the Old Mill District, had nearly $2 million in sales this year, but is on track for about triple that amount in 2005, Taylor said.

”The sales are potentially huge,” said Taylor, who expects to add about 10 employees next year, including electrical engineers and technical manufacturing workers.

Consumers can buy the systems at Costco but must have it installed by a licensed professional to get state energy rebates, Taylor said.

California, Oregon and New Jersey, where PV Powered has most of its sales, offer some of the strongest incentives in the country, he added.

Costco will only choose certain demographics to offer the systems in a ”road show” format, Taylor said.

”It’s like a mini trade show,” he said. ”In Santa Barbara, (Calif.,) right as you walk in, we have a manned-booth exhibiting our product and solar panels. Customers get to talk to live people and set up site surveys.”

So far, Costco has had the shows at about five of its warehouse stores in southern California.

”It has generated leads but it’s a tricky thing because we have to find crew to install them,” he said.

A show at a Palm Desert, Calif., Costco generated 5,000 leads. That is, consumers filled out applications requesting site surveys to see if they have enough roof space and sun exposure for the systems, Taylor said.

”We’re working on putting together installation teams,” said Taylor. ”BP is supplying the panels and our partner is Solar Systems Inc. in Los Angeles.”

In October, PV Powered won the largest number of votes at the first Bend Venture Conference, which hailed it as having the strongest business plan and being the sexiest investment opportunity there.

It was one of nine early-stage companies that pitched its businesses to angel investors and venture capitalists from the Bay Area and the Pacific Northwest.

PV Powered has since been developing relationships from contacts made there and will pitch to angel investor groups in Portland next month, Taylor said. He will be asking for funds to expedite the research and development of inverters for electrical systems in larger, commercial projects.

The company also plans to begin marketing its products in Europe in June.

”We’ve never sold outside of North America before and we’ve hired a seasoned sales force that’s well connected there,” he said.

Germany is the second-largest consumer of solar panels in the world behind Japan, he said. The German government gives consumers solar energy rebates of up to 57 cents per kilowatt hour, which is more than twice the cost of electricity from traditional power sources, Taylor said.

”They are putting systems on their houses and getting positive cash flow right away and they can get zero-interest loans that are government backed,” he added. ”Germany wants to cut its tie on fossil fuel dependence.”

The country is installing 400 solar systems per day, he said.

”It’s so strong that some of the solar panel companies are using satellite imagery to look for potential rooftops,” he said. ”They target the locations and send sales teams there to close deals. It’s that aggressive.”

Cathy Carroll can be reached at 541-383-0304 or at ccarroll@bendbulletin.com.

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