Why now is the best time ever to be a solar entrepreneur

Transcription

1 Arzon Solar 8700 unit installed at Bryce Canyon National Park Visitors Center, July, 2015 Why now is the best time ever to be a solar entrepreneur Adam Plesniak Managing Director, ASES Orange County, CA info@ocrenewables.org July 30, 2015

2 Background: Currently VP of Engineering at Arzon Solar in Seal Beach, CA & active industry consultant Managing Director at ASES Orange County, CA Chapter, OC Renewables ( Working in Solar since 2007 in Product and Project development Mechanical / Electrical Engineering background, DFx and Value Engineering experience

3 4 Easy Steps to Entrepreneurship: Step 1 Understand the market Step 2 What problem are you trying to solve? Who is your customer? Step 3 What is your solution? Service or Product? Step 4 - Do it

4 4 Easy Steps to Entrepreneurship: Step 1 Understand the market Step 2 What problem are you trying to solve? Who is your customer? Step 3 What is your solution? Service or Product? Step 4 - Do it

5 Step 1: Today s Global market Takeaways: Global PV is growing while individual markets may not Asia & Europe are still the primary markets US, Latin America, MENA and Africa are minority markets Global PV already a $100 billion / year industry Africa, MENA, Latin America are smaller markets, but growing faster and with fewer established players

6 Step 1: Today s US market

7 Step 1: Price in today s US market Takeaways: Most cost reduction will happen in residential as the industry grows and permitting becomes easier Capturing learning rate via cumulative doubling becomes harder as utility industry gets bigger. No matter your business, price expectation should always be in consideration

8 Step 1: How the market is split Utility Commercial Residential Other Rooftop Takeaways: Solar can be split into type of customer and type of installation / product The large blocks are already developed with big service / product providers Ground Mount Other The orange blocks are the niche applications. These include niche customers as well as niche products As the entire industry grows, so do the niches. These can particularly ripe areas for the entrepreneur due to undeveloped services and products

9 Step 1: Example Niche Dual Axis Trackers for Solar Panels: Despite 30-40% boost in energy, DA tracker products currently available are limited (2-3x commercial offerings), expensive ($1-$2/W) and suffer from product engineering / reliability issues historically. If the industry had a robust, cost effective, widely available tracker, the market may expand beyond the current niche. Solves Not-On-My-Roof (NOMR) and can elevate for land dual-use. Arzon Solar has recently launched a 16x & 44x module dual axis trackers in support of this market Si Panels on a dual axis tracker

10 4 Easy Steps to Entrepreneurship: Step 1 Understand the market Step 2 What problem are you trying to solve? Who is your customer? Step 3 What is your solution? Service or Product? Step 4 - Do it

11 Step 2: Problems today that need solving Opportunities for Entrepreneurs in solar are fundamentally different than even 5 years ago Solar : Is the solar industry even real? Is large-scale disruption in electricity even possible? (translation: $1 billion or $100 billion?) Solar : Ok, its real, now who are the big players going to be? (translation: Here comes the Venture Capital) Solar : Ok, big players are established, now how do we make money? (translation: Sausage making mode, cost reduction with existing business, acquisitions) Solar : With big players focused on execution, are they failing on innovation? Can big solar itself be disrupted? (translation: entrepreneurs working to make big players more efficient /differentiated or providing fundamentally better service will win)

12 Problem #1: Ubiquity of the Si Module 95% of installed solar uses the ubiquitous poly or mono-crystalline solar module. Regardless of manufacturer, these modules are nearly identical in function and cost. This leaves manufacturers basically profit-less and starving for differentiation. A $100 billion / yr industry based on a single product is a huge potential payoff for a disrupting / better approach. Opportunity: Investment / research dollars are still headed towards other approaches and incremental / differentiating improvements 95% of the 40 GW / yr global solar marketplace The polycrystalline silicon solar module

13 Problem #2: Aesthetic is Important For residential solar, aesthetic is limiting the market. Home owners care about the look of solar on their house or property. The industry has and continues to be completely fixated on cost, but as solar becomes an appliance, other features become important. If we are going to cover roofs of the world with solar, why not make it beautiful?! Opportunity: Offer solutions to increase the aesthetic of solar products with only modest increase to cost. Find ways to leverage existing technologies and products Solar Decathlon Winner

14 Problem #3: Own your Niche Big players continue to race to the bottom on pricing (and margin) with their core business. Customers with needs not perfectly within the core business will suffer in service and execution, or may not even be considered. As costs of solar equipment fall due to core applications, niche opportunities grow but may not be serviced. Opportunity: Pick a niche, learn it inside and out, provide a product / service better than exists and then own it. Margins are generally better and demand is manageable.

15 Problem #4: Focused Investment is Available Cleantech / sustainability investment capital is available. Large funds around the world have uncommitted capital, but this is not dumb money. They are looking for executable, riskmanaged plans. Customers with needs not perfectly within the core business will suffer in service and execution, or may not even be considered. As costs of solar equipment fall due to core applications, niche opportunities grow but may not be serviced. Opportunity: In the world today, there is more money than good ideas at the moment, including solar. Which one do you want to have?

16 Problem #5: Regional Non-Symmetry Deployment of solar is a local / regional business. Some regions are more developed today than others. Developed regions offer a window to the future for less developed regions. Regional business can change quickly due to new solar policy, or market saturation in a crowded region. Opportunity: Learn from market leading solar regions, apply to your own region for early impact and dominance. I.E. Does your area have an ASES Chapter??

17 Additional Problems / Opportunities: Integration with storage / smart grid / software tools Faster design, estimation and permitting Operations and maintenance Solar education DIY Solar (as an appliance)

18 Really the best time for Entrepreneur's? Yes, because solar is a real business now. The Entrepreneur is taken seriously. More people know the basics about solar. The Entrepreneur audience is wider than ever. Solar industry is bigger than ever and still growing with no shortage of problems / opportunities. Time to have