Ask a builder why the solar array on a new home isn't bigger, and you will almost never get an answer about the roof. You will get an answer about the budget.
That’s how the first-cost trap shows up in the solar sector. A larger system costs more upfront. Upfront cost is what the appraisal, the construction loan, and the sales sheet all respond to, so the system gets sized to the budget rather than to the house or the household living in it. Then the buyer moves in, adds an EV, swaps the furnace for a heat pump, and discovers the array was sized for a life they have already outgrown. The second system costs considerably more than the first one would have.
In a recent interview, I spoke with Matt Brost, Vice President of Sales for New Homes at Sunrun, to talk about what happens when you take that constraint out of the equation.
Sunrun's Flex program inverts the sizing logic. Instead of building a system that the budget allows, Brost says the company installs close to the largest system the utility will permit, then bills the homeowner only for the energy they actually use.
“What we’ve experienced with homes is that when we design systems, consumers generally want more energy for their home, more batteries, more solar panels,” Brost said. “ Sunrun installs the full capacity on day one for a household to grow into, rather than paying more down the road to increase the system size.
Think of the strategy as a hedge against rising utility costs and energy price volatility. “If we could have locked in gas prices for our cars five years ago, who would not have done that? That’s exactly what we’re doing,” Brost asserts.
Rate predictability is an asset, although the housing sector has never had a line on the appraisal where it could show up. That missing line is how solar intersects with Value Per Square Foot.
“We try to help homeowners understand the difference between the first cost of a solar system with battery storage and the full cost of energy,” Brost says. “If we can help them lock in their energy rate, they are lowering their operating cost, changing the risk profile of their home, and increasing the value of that home.”
Perhaps the most interesting part of the Flex system is that Sunrun delivers the program to home builders at no cost to them. “By not impacting the builder’s proforma, we’re able to look beyond first cost and help that builder deliver a better product to a homebuyer,” Brost insists.
Watch the full video to learn more about the mechanics of the Flex program, why energy as a service changes the builder conversation, and how a rooftop hedge enhances the Value Per Square Foot of a home.