Jan 23 - McClatchy-Tribune Regional News - Diane Mastrull The Philadelphia Inquirer


With enough enthusiasm, it seemed, to power the sun, David Blumenfeld announced in May the creation of a start-up that would offer Philadelphia homeowners the option of leasing solar systems -- an energy alternative considered by many too costly to purchase.

He is now pronouncing his Urban Eco Electric (UEE) venture "a loss," a casualty not of insufficient interest from city residents, he said, but a lack of government subsidies for a concept new to this region.

"In the end, I just couldn't do it," said Blumenfeld, 48, a lawyer and real estate broker who lives in Lower Merion. "It just doesn't quite work yet."

UEE would have been one of only a few solar-leasing companies nationwide. The others are mostly in California and Connecticut.

 Blumenfeld's hope now is recouping some of his "six-figure" investment, mostly for legal, accounting, and advertising expenses. Relief could come through an acquisition deal reached with Eos Energy Solutions, a Philadelphia solar-design and installation company.

Under that arrangement, Blumenfeld said, Eos will pay him for UEE's Web site and provide "a small deposit" for access to his customer list of 100 interested households. The company had not installed any systems as it continued to work on arranging financing.

As part of the sales agreement with Eos, Blumenfeld said, he also will collect an undisclosed "fee" for any UEE customers who agree to sign on for a solar system through Eos.

It is doubtful that those systems will be available for rent, said Andrew Kleeman, Eos' managing partner and "old friends" with Blumenfeld from their previous careers in commercial real-estate investment.

"We are exploring ways to bring David's concept to fruition," Kleeman said, "but we are not optimistic we are going to be able to do it."

Though specifics are still being worked out, Kleeman said the deal Eos would offer only to UEE customers was expected to require a $250 deposit for a 4-kilowatt system valued at $30,000. The balance would be 100 percent financed, he said. When the Pennsylvania Sunshine Program rebate of $9,000 is paid, customers would use that to knock down the debt.

The monthly payment on the remaining debt, Kleeman said, will be exceeded by the electricity savings from going solar and the revenue from unused power sold into the grid.

Noting that solar customers also will be eligible for $9,000 in federal tax credits, Kleeman says he expects half of UEE's lease-signers "will be able to do the purchases because it makes better financial sense."

Eos expects to contact all UEE customers next month to explain the new option. Installation could begin by March, he said.

Where Blumenfeld came up short was no fault of his own, said Adam Stern, executive vice president of Gemstone Group Inc., a renewable-energy investment-banking firm in Wayne.

Gemstone helped establish Connecticut's solar-leasing program in summer 2008 and has been working on creating such a business for Pennsylvania.

Working against that, Stern said, are government rules that make it difficult for a private market in leasing solar to emerge, along with a reluctance by banks "to be really interested in looking at something new."

"We remain optimistic," he said. "We continue to talk to banks and other investors that have interest in . . . renewable energy and educate them."

Blumenfeld said he hoped those efforts succeed. Otherwise, "there's no way to get [solar] into low- and middle-income hands."

Contact staff writer Diane Mastrull

at 215-854-2466 or dmastrull@phillynews.com.

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