Author Archives: SolarAcademy

About SolarAcademy

SolarAcademy's mission is to deliver the most complete information on solar solutions to consumers, home owners, commercial property owners and anyone who wants to learn more about solar energy. We are solar industry veterans with deep industry knowledge. We launched TheSolarInsider because we believe the cost of educating the consumers about solar options (aka cost of sales & marketing) is still one of the largest cost components of delivering solar solutions. We believe providing the consumers with comprehensive solar know-how will decrease the total cost of solar and accelerate its adoption.

RACI – Who owns what?

I have worked in big companies with 500, 1000, 10000+ employees. And I worked at small companies with less than 80 employees. I also founded and co-founded 2 companies from scratch and grew one to 25 employees before selling it, and helped grow the other to 70+ and am still involved in running it.

In all of these companies, company culture dictated how decision are made. As a leading solar equipment distributor for the independent contractors in the US market, we interact with all kinds of entrepreneurial businesses from focused solar installers with 100+ employees to small contractor family businesses to the one man and a truck operation.

No matter what your culture is like, whether it is a cut throat highly structured clear hierarchy, or a more collegial family business, to run an efficient business all teammates need to know who owns which decision.

We see that in our own business, our competitors and our successful customers. Those who have this concept nailed down have happier customers and more profitable businesses. I like the concept of RACI when it comes to clarifying who owns what.

I recently read about RACI in Maynard Webb’s book “Dear Founder”.  RACI simply stands for:

  • Responsible
  • Approves
  • Consulted
  • Informed

More on RACI, here in this brief section of the book:

Raci1

Raci2

I became aware of Maynard Webb recently through a former colleague who works closely with him.  Maynard is currently a board member at VISA and Salesforce, and was the former Chairman of Yahoo and COO at Ebay. He is also the co-founder and board member of Everwise, a talent development startup.

After watching a couple of his interviews on Youtube (here and here) and reading his book, I became a fan of Maynard Webb. I highly recommend his book “Dear Founder“.

MWebb

You can learn more about Maynard Webb here, on his website.

If you can’t solve a problem, enlarge it!

“If you can’t solve a problem, enlarge it.” said Dwight Eisenhover.

All companies solve a problem one way or another.  Sometimes widening the scope of the problem you are solving makes more sense for the world to understand what are doing. This helps attract capital, bright people, and better and more aligned business partners.

For example, talking in the context of our company, CivicSolar, we can simply describe our business as a solar equipment wholesaler and distributor, or as a knowledge and equipment distribution platform provider and services aggregator, which accelerates the healing of the planet from the unhealthy and unsustainable state that it finds itself in.

I like the latter description better.  We, the passionate and purposeful team of people at CivicSolar, are uniquely positioned to help this healing process.

The planet needs:
– Clean and sustainable energy. Two thirds of the carbon in the atmosphere is due to buildings and vehicles, most of which run on fossil fuels. Solar power will change that dramatically over the next couple of decades.
– More equitable and fair distribution of power and energy resources.  5 countries and a couple dozen companies control over 50% of oil production. Solar power will democratize power production
– Business platforms that connect companies across various layers of their industry value chain. Why can’t information flow more seamlessly across companies? What if we had industry platforms that provide not just efficient B2B or B2C e-commerce solutions but also fluid  information flow pathways combining elements from platforms like KhanAcademy, Yelp, Wikipedia, Quora, etc…

At CivicSolar, we currently operate a web-based sales and marketing platform that serves 1,000s of US-based contractors. We work with the worlds leading solar energy equipment manufacturers to learn everything about their innovative products and pass on our knowledge while selling equipment to contractors. 

But that is only what do today.  Our future includes:
– Enabling not just 1,000s contractors in the US but 100,000s of contractors across the globe, builders, developers, architects with solar and advanced energy solutions to heal the power make up of their local communities
– Providing the latest great information on solar and advanced energy products to building professionals in the most efficient manner possible
– Creating and delivering learning pathways for building professionals to be up to date with new solar and advanced energy technologies

In progressing towards this future, we will try to provide as much free information as our business model allows. We believe in sharing as much information as we can so we can equalize the unequal power distribution not only in the context of dirty fossil fuels but also in the knowledge economy.

Batteries & Video & SolarAcademy

I first heard of Hello Tomorrow about 2 years ago when they invited me to talk at their Future of Energy event that was held in Istanbul, Turkey.

Hello Tomorrow is a non-profit organization that brings together a community of actors aiming to unlock the potential of deep technologies to solve the world’s toughest challenges. They organize startup competitions, mentorship programs and a series of events around the world, as well as educating and consulting relevant stakeholders on emergence of deep technologies. Hello Tomorrow is fast becoming a key reference platform in deeptech innovation and entrepreneurship.

At that 2016 Hello Tomorrow event, I delivered a talk about what we do at CivicSolar and the future of Solar and Advanced Energy Solutions. I finished my presentation talking about the next frontier of renewable and sustainable energy – specifically batteries.

In the last part of my talk, I made a reference to MIT Professor Don Sadoway’s 2012 TED Talk titled The missing link to renewable energy.

I talked about how fast the cost of solar panels came down in the last 10 years. And I talked about how hard the industry is working on bringing the cost of batteries down, too. I predicted that when the cost of batteries will go down by 5x, in the next decade or two,  everything will be different.

Before I accepted to talk at the Hello Tomorrow event, I asked them one thing. “Are you going to record and publish my talk (a-la-TED style)?” And they did not say a definite yes. I said, “Well, I will do it only if you record it and make it available like TED does their talks.” And then they told me they would do it. I don’t know if I influenced their video policy decisions or not.

You might be wondering why am I telling you all this? I am telling this story to make a point about the power of online video content.

As I was browsing my Youtube feed on my Apple-TV at home last night (yeah I don’t watch regular cable TV anymore…) I came across this other 2017 Hello Tomorrow Talk by Don Sadoway titled, Unlocking Renewables in which he talks about his company, Ambri.

At minute 12 of his talk Don Sadoway talks about how he raised a bunch of capital from Bill Gates. And he follows that by saying he is Canadian (and therefore polite) and that he would never dare go to Bill Gates to ask for capital.

So, what happened was, Bill Gates watched Don Sadoway’s online MIT OpenCurseWare video lectures (all 35 of them) on his own and then reached out to Don Sadoway to meet with him and offered to invest in Sadoway’s company before Sadoway even asked for it.

Yes, that is the power of online video. If you put it out there, they will come. What I mean is – if you put yourself out there – what you are trying to do for the world, and why – provided that it adds value to your surroundings, it will attract the right resources (customers, investors, employees, partners, fans, and more…).

By the way, shortly after my Hello Tomorrow was published, we (CivicSolar) attracted a group of new amazing investors, as well.

Watching Don Sadoway’s Hello Tomorrow video made me once again realize the power of authentic content and the power of video. Video is powerful.  If a picture is worth a thousand words, a video is worth a million words.

They say words are only 7% of communication. Your tone, the energy of behind those words, your body language, facial expressions are the remainder 93%. Of course if you combine that with other graphics, charts, visual communication objects that accompany your message, your message can become even more powerful. That is why video is important. Especially, as a business communication tool.

That is why we are launching SolarAcademy today. I intend SolarAcademy to host lots of  content (and hopefully much of it in video format) initially on solar and advanced energy technologies. We intend SolarAcademy content to come not only from us (CvicSolar) but also from others in the industry – our vendors’ (leading manufacturers of solar equipment), our customers, financing providers, solar sales and marketing service providers, even our competitors.

The mission of SolarAcademy will be to accelerate the healing of our planet by accelerating the flow of knowledge between the various nodes of the solar industry and most importantly to the millions of property owners, users of energy (essentially everyone in the planet, including home owners, commercial and industrial property owners) to accelerate the transition of their buildings (and vehicles) to run on clean energy instead of fossil fuels.

Another goal of SolarAcademy will be to encourage the business community to change some habits. Especially about sharing information.  SolarAcademy will encourage and reward companies that share more of their knowledge with their customers (and each other) in a more efficient way.

Along the way, if we can catalyze some activism in slow moving states towards their path to renewable clean energy, that will be a nice bonus!

Our goal is to create a more collaborative equitable healthy world economy that fosters and rewards a healthy planet. Pure hard nosed competition is not what necessarily makes the world a better place but information sharing and creative solutions that complement each other do.

The more you share the more you will get back.  Simple.

Considering Solar for your Home? Start With: “Who Am I?”

If you are a homeowner and are considering solar, how you move forward really depends on who you are.

Imagine this: You are your partner just bought a new bookshelf from Etsy. It is being handmade and shipped to your doorstep in a couple weeks. The shelves need to be installed on the wall of your living room. The bookshelf consists of seven shelves and 14 brackets that need to be installed on the wall at the right distance from each other, and perfectly level. Each shelf also came with LED lights that have to be attached to the underside of the shelves in a way that the wiring and the fixture are discrete and out of sight.

What do you?

  • You know you are handy and enjoy DIY’ing, so you set aside a day from your weekend and just do it yourself
  • You are not that handy, but prefer to teach yourself and save the money. You might even call a few local handymen, who come by to give you an estimate and discuss how they would do it. You listen to each one and do it yourself anyway
  • Call a few local handymen for estimates and just pick one that seems most reasonable and reliable

Going solar is not dissimilar, although it is a lot more complex as a process, with many components and processes. Some homeowners are skilled and inclined enough to take care of the entire process themselves, handling each of the financial, technical and local policy compliance, and even installing the system by themselves. While others could not be bothered with anything other than the savings and just need a reliable solar installer to manage the project on a turnkey basis. Many others fall somewhere in between: they get involved in the process, talk to installers, solar equipment sellers, other homeowners, local building officials, to learn as much as they can about the various components and processes.

Here at SolarAcademy, you will find the tools and resources no matter who you are. Being clear about who you are from the get-go will help you navigate this process more effectively.

In our next article, we will break down the different processes and components of solar buying to help you understand your gaps in knowledge, and point to resources that will fill those gaps.

How a $20,000 solar investment instantly creates $100,000 value

Buildings are valued based on a Cap rate calculation, which essentially says something like this: If a building’s operating income is $50k, you apply a cap rate of 16-20X to that, which brings the value of the building to $800k-$1M.

If you improve the operating income of that building by say $5k per year by installing a solar system that costs you $20-25k (a 4-5 year payback is very common in many areas in the US today) then the value of the building is going to increase by $80-100k.

That is how a $20k investment in solar will instantly create a $100k value for a building owner.

Of course, this above example will not work out in areas that have super cheap electricity rates or where where cap rates are higher (or where the multiples are lower). In areas where the electricity rate is above 20 cents per kwh, it is very likely to reach this level of a return.

Should you own or lease your solar PV system?

For home solar, ownership is usually better, but it depends.

For a typical single-family home (2 bed / 2 baths), installing solar PV can be a sizeable investment to pay for upfront or take a loan out for. A solar lease or power purchase agreement (PPA), or what are commonly referred to as ‘Third-party owned’ (TPO) options can be beneficial in some instances. As is the case with any high-value home upgrade, understanding your own situation is a good place to start. Here are some things to consider:

1. Financial

Liquidity is key
If you have the money lying around to invest in solar, or if you are able to access a reasonably-priced loan and the effective ‘cost’ of your money is lower than what solar can offer, then you should consider paying for solar outright or taking out a loan.

Let’s unpack this … If you’re working with a seasoned installer, you should receive a 25-year ‘Cash Flow Table‘ which takes into account your upfront payment or loan numbers (as the case may be), dollar savings on your energy bill, tax benefits, and any other incentives that might accrue to you. The simplest way to understand these cash flow tables is to look at your net cash flow at the end of 25 years. Note that this final number will vary based on whether it is a full-cash payment or a loan. With a loan, down-payment amount, interest rates and loan tenures will affect the final figure. In any case, this final figure is what you will use as a point for comparison.

Now, solar is considered a low-risk investment. Rarely do solar PV systems break down or need service. So, the appropriate metric to compare the net 25-year figure is against another low-risk investment. Say a term deposit or bond instrument. If you were to invest in a bond, the same amount that you would pay to own solar, what is the value of the investment after 25 years? This is not hard to calculate. The difference in the net value of your bond and the net value of solar PV will help you decide if solar is worth owning.

In the case of a lease or a PPA, the financial costs and benefits of ownership are to the account of the third party offering you the lease or PPA. Moreover, some deals require an annual escalation in the price paid the solar provider. And if you study the 25-year cash flow table for a lease or a PPA, you will see, given the liquidity, it is not the financially prudent approach to going solar.

So, third-party-owned (TPO) solar is a better option when there is a lack of liquidity and the savings being offered by the TPO company are significant in the longer term.

2. Maintenance

Solar PV systems are comprised of three main components:

  • Solar panels: The panel captures the sun’s rays and converts photons to electrons
  • Inverter(s): This converts the panels’ DC output to grid-compliant AC power
  • Racking: The structure that is used to attach the solar panels to a roof

Every panel, inverter and racking company is different, and their products may vary in quality and performance but suffice it to say that reputed solar manufacturers build their components for extreme conditions (PV panels, in particular) and durability.

Besides the components, a critical aspect of the solar PV system is the quality and durability of the installation itself.

If you own the system, and all well-informed about how to buy solar components and services, there is a better chance of controlling not only the brand and quality of the components used, and also the quality of installation done.

There are two main areas of concern with respect to solar PV maintenance.

  1. Structural: This has to do with how the racking system has been attached to the roof.
    Typically, the main cause for concern for any homeowner is “What if my roof leaks?” When going solar with a lease or a PPA, the liability of any potential roof leak can be passed on to the TPO-provider. However, this problem can be mitigated by working with a seasoned solar PV installer. One that has roofing professionals with strong credentials, liability insurance, and a long-standing reputation in the community.
  2. Electrical: These might be breakdowns in the panel, the inverter or the wiring
    On the electric side, most PV systems come with diagnostics that let you know when a string or a specific solar panel within an array is not functioning at its potential. Also, most panels and inverters have long-term warranties. Doing your homework, and making sure that the installer is procuring high-quality components will go a long way in ensuring that future maintenance problems are minimized.

While TPO providers may be held ultimately liable for maintenance, it is important to weigh this against the financial opportunity cost of not owning solar (see above). Further, the local installer may offer long-term service coverage in case of structural and electrical issues.

3. Selling your home with solar: Owned vs. TPO

Transferring ownership of a home which has a significant asset (solar PV system) owned by another party is going to be more work and paperwork than if you simply owned the system and sold the home on an as-is basis. Also, it is important to read the fine print. Some TPO solar providers write the contract in a way that places a lien on your home at the time of sale. This is them protecting their investment, but if it is not understood upfront, it can be a cause for heartburn later.

If the solar PV system is owned by the homeowner and was procured using a loan, then the simplest path would be to roll the price of solar into the price of the home and pay off the solar loan when the seller receives the money from the sale. This situation is a win-win for everyone because the seller is likely to get a better price for the home because of solar (see research) and the new homeowner will pay for solar as part of the home loan, at the same (lower) interest rate.

So, in summary, if a homeowner is considering going solar, owning the system is the preferable way forward if one has the liquidity, the ability to dig a little deeper into the components and install process, and is looking to get a better value from solar when the home is sold. Conversely, TPO solar is better for the homeowner with limited liquidity or access to credit, lack of bandwidth for the solar process, and not much concern about resale of the home.

In a following next article, we will cover the considerations of ownership vs TPO for commercial and industrial applications.