HS TV Ep 4: Renewable Energy Politics. A Conversation with Stephen Lacey

Politics is hugely important to the renewable energy industry. Above all else, our industry needs stable policy. Being a small businesses, it’s hard to keep up on the very industry-specific policies, even though these policies are very important for your businesses. This is where we see audio content and interviews to be very powerful and useful to the HeatSpring community and politics is a great way to use HeatSpring TV.

Everyone has questions about politics and wants to keep up to date, so I reached to Stephen Lacey, a report for Climate Progress who loves in Washington DC and is very connected to the the politics and policies of renewable energy.
I wanted to get his opinion on a few things.

The additude and political climate around Solyndra and Evergreen
The hugest push lately is jobs. The solar industry is creating thousands of jobs, how is this contrasting with point 1.
Small guys vs large guys. How can small contractors can go up again solar companies that have $500 million in cash.
Being in DC, where he thinks federal policies are going and what he’s excited about.

After concluding our conversation (you can watch or listen to the full interview below with annotated time stamps) here are the points that have really stuck with me.
The conclusions on the future of renewable energy.

The worst-case scenario doesn’t seem bad anymore. Our industry has enough momentum that a full scale government scalback will not happen. It will be bumping but we’ll probably be able to ride out.
The incremental improvements, especially in the solar PV businesses, are adding up to huge cost savings that is further driving growth.
There’s a lack of support on that we can count on from the federal government and this will mean that the role of state and regional governments will continue to be high. What does this mean for you? You can have an impact on your industry developing by being involved in local and state government.
The day-to-day news might sound bad but the outlook is continuing to look amazing. Solar is the fastest growing industry in the US, it has a huge benefit to the domestic economy as $.73 of each dollar spent on solar stays in the US, the industry is a net exporter, costs are coming down extremely quickly and it’s creating tens of thousands of jobs.
There is still a lot of push back with some federal politicians challenging whether green jobs actually exist of not. We need to start collecting stories of small businesses creating jobs with politicians so they understand.

Here’s is the video interview. Note, the video on my side, the left side, stops around 3 minutes due to internet difficulties. However, the audio stays good the whole time which is why I decided to post it. If you’d like to download the episode as an MP3 and listen at another time, you can download it on iTunes at HeatSpring TV.


The Entrepreneur vs General Contractor. Who Will Win the Clean Energy Race?

There’s an interesting split in the residential and light commercial clean energy space lately. As consumer demand is surging and some “old” solar pv players are moving to bigger projects (Nexamp no longer does residential and is installing 4.5 MW in Western, MA, Borrego sold their residential business, etc) there is room opening up for smaller, new companies.

I’ve personally noticed a major divide between the types of organizations expanding into the industry to meet the demand. There tends to be two major camps. First, the entrepreneur. The entrepreneur sees the huge industry growth and is starting a new company to take advantage the growth. The entrepreneur will tend to focus on a specific technology; solar pv, solar thermal, geothermal or energy efficiency. The second is the general contractor or construction professional who plans to expand his current business into a new technology. He does this for a few reasons. He has existing customers asking him about these new technology and he already knows 80% of what he needs to know to install these systems.

Each of these groups looks at the industry in a different way. Each has its pros and cons.

The Entrepreneur or “Pure Play”

I call it a pure play as the whole business is typically hinged solely on the sales of projects in a specific technology.

The pure play company tends to see  “understanding business”. That is, the connection and optimization of marketing, sales, engineering, and installation activities as a skill in it’s own right, and they believe the reason they’ll success with the new company.

The General Contractor

The general contractor tends to already own an existing business focused on the building industry. This tends to be general contracting or a as a sub-contractor; roofer, plumber, electrician, etc. The general contractor tends to want to continue their existing business while taking their existing trade knowledge into a new field. The general contractor is already well versed in all of the aspects needed to complete a project;  design, installation, project management and customer manager and this is why they feel they will be successful in a new industry.

What are the pros and cons of each?

I don’t personally feel either is better suited to take advantage of the opportunity in the huge growth of renewable energy, though I do think they will find themselves in different places in the market and supply chain, simply because of how each group values marketing, sales, and the installation side of the business.


Solar Financing Options and the Benefits of Each

The residential, commercial and utility scale solar financing markets are different and have their own dynamics.
If you’re really interested in learn more about financing commercial solar PV projects, I have three resources for you.

Click here to sign up for our Solar Executive MBA and Learn how to Finance Commercial Solar PPAs from A to Z
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The residential market is driven by 3rd party PPA providers and companies offering their own in-house financing. For example, 3rd party providers include SunRun and BrightGrid , as well as companies offering their own in-house financing, like SolarCity. The 3rd party companies provide a useful tool because it allows smaller companies to compete with the larger SolarCity types by allowing them to offer competitive financing. Each of these companies has been able to tap into large amounts of institutional capital by providing stable returns.

The utility market (20MW+) on the other hand, is very concentrated and is typically dominated by manufacturers who create or buy their own development department. In the SEIA’s last report 51% of the utility market was dominated by only 12 firms. As you can see from the list of top utility solar developers below most are manufacturers, and the majority of the independent developers, like Recurrent Energy, have been bought by manufactures. Recurrent was recently acquired by Sharp last year.

The commercial market in the built environment is a different environment from both utility and residential scale, as it requires a more technical understanding of solar, structural and roofing of the building then residential but is also heavily dependent on financing.


VERY Basic Geothermal Training

Ground Source Heat Pumps, GeoExchange, Ground Coupled Heat Pumps…the list goes on.  The Geothermal Heat Pump industry has had a lot of names over the years.

In this three minute video, HeatSpring Instructor John Manning explains what Geothermal Heat Pumps are, and dispels some common misconceptions.  It’s a nice introduction for those just learning about the […]

How to Build a Renewable Energy Division in an Existing Building Company – PART 1

A lot of residential and light commercial renewable energy work is starting to be picked up by general contractors, like Jamie Leef of S+H Construction in Cambridge. Why? General contractors are in a unique position to pick up this work because they’re used to managing projects, sales, and it supplements their existing business.

Beginning in September, I am going to be working with one of my best friends in Maine to create their renewable energy division. My friend Gilbert took over his father’s residential construction company. It’s a small local company in coastal Maine that has a repuation for building high quality, energy efficient homes.

I’m going to keep a journal of the journey on Heatspring Magazine because many of the issues we’ll be dealing with are common for everyone in the industry. What am I going to be discussing? Everything that a small business must do to make money; establishing our marketing and sales strategies, performing site visits and creating sales proposals, applying for incentives, the design process and lastly, the installation process. My goal is to be 100% open and share everything we learn. I have absolutely no fear that me sharing this material will mean less business for us. In fact, I feel it will sharpen our business strategy, writing has a tendency to do this, and it will help other contractors like yourself. Read below to get this specifics.  If you like this idea, have any questions, or are working on a similar project, feel free to leave a comment or ask me on HeatSprings facebook page.