The man is right - Lunars seem to lack the niche that the other Exalted possess. They're defined much better in 2nd ed / Lunar Book, but they still seem to have a purpose that is primarily "shapeshifting companions to the Solar". I think the original (rather cool) ideas of Lunar presented in the core rulebooks (1st and 2nd) were never really followed through.

Personally, I'd run this as Dragonblooded PCs. Solars are Solo enemeis, Sidreal and Lunar as Elite, Gods vary from Elite to Normal, Demons vary from Normal to Solo, and so on.

Alternatively, start out at level 11. Mortals are levels 1 - 10, Terrestial Exalts levels 11 - 20, Celestial Exalts levels 21 - 30.