Interview with AMECO Solar CEO – Patrick Redgate
The Solar Industry Then & Now
How did you get started in the solar industry?
I got into solar because I was working for an engineering firm in Saudi Arabia in the 70’s. When I came back from Saudi Arabia, I said this is not sustainable. That’s probably not the word I used, but that’s a really popular word now and it’s really an important one because when I came back to America I realized this isn’t a business that I wanted to do. I wanted to get in the business of saving the planet. Now however, solar has been a rocky road and in the meantime we have learned that solar is really just a part of the mix. There are many other energy generating technologies that are important for us.
How has the hardware changed? What improvements have you seen?
The kind of hardware we used to install commonly was generating heat and that would be heat for people’s homes and hot water for businesses, swimming pools. In fact that technology has really ripened and is mature now. But what we’ve seen now is that photovoltaics have come down in cost and photovoltaic is the science of generating electricity. Electricity is so expensive to get in any other way because of not only the economic costs, but the environmental costs. Photovoltaics are now something I never thought I would see in my lifetime available for everybody for any application that they want.
What were some of the challenges facing you when you were starting out and what are some of the challenges now?
The biggest challenge when we started out was first of all locating products that made sense. And without any track record or understanding it was our job really to discover what was out there. Sometimes I think we were just lucky. We picked the right products and those products did us well. But we are pretty conservative in how we choose what we represent and what we install. We don’t manufacture, however in the 70’s we actually did manufacture because the offerings were so limited. By the mid 80’s there were over 280 domestic manufacturers of Solar Products available to pick from. So we had a big job, to understand what was good, what was bad, what worked, what didn’t. We had to work our way through all the claims and figure out and understand if this was a good fit for our customer base.
Now in today’s world the market has changed to the point where there are only a few domestic manufacturers of solar in the United States and a lot of the competition in the photovoltaic field and electric field is coming from China simply because they have a government directing their programs. They understand the benefit of solar and they have a vision, but we have a laissez-faire economy. And so the nice thing to see is that solar is doing quite well even in a laissez faire economy, but manufacturing costs are very high and we still have a lot more foreign manufacturers to pick from than we have domestic manufacturers.
Net Metering is the term given to the act of selling energy back to the energy companies. What are your thoughts on their future use?
Well actually, electric generation for home owners and businesses would not really be technically or economically feasible for the great number of our customers without Net Metering. Net Metering was passed by the California legislature I think it was in 1996 and it was done as an incentive to…it was done as a…you can deregulate the utilities, the utilities can deregulate themselves, as long as they provide Net Metering. Net Metering is simply the way that people sell energy back to their utility. They generate power during the day, the utility buys it back from them at the same price they bought it – they bought the energy the last time. So it is not a good business model for the utilities. They can’t generate power and buy it back at the same price they sell it, but it really makes the economics here work.
As far as Net Metering’s future is concerned, I think that it’s already been written that only 5% of the customer base can go Net Metered and if that doesn’t change then the solar/electrical applications will really be left for people that want to power their electric vehicles or they want to sell their electricity at a wholesale price. And if they sell their electricity at a wholesale price, it may be feasible because the price for solar has dropped where that may be a good deal for everybody.
What’s your viewpoint on incentives and rebates? How do they impact the solar industry?
It’s hard to say the word sustainable and then ask for incentives. When we have a sustainable technology it should be able to offer the benefits that people would expect without having an incentive applied. But this is an industry that will not come into its own at this point without some kind of support from the government. And what we have seen for instance, the solar industry go to the point now where over 100,000 people are employed in the state of California where as 10 years ago it wasn’t – this couldn’t have happened without some kind of incentive and support. And also what we have seen happen is because of that support, prices have come down and we are at the point now where we really may not need incentives much longer.
When the current incentives end for solar, we’ll be faced with a market that is very well developed. People accept solar as an alternative. Will the pricing be good enough? We don’t know. But if the incentives are gone, the tax credits are currently in place until the year 2015 – that’s a huge break for the buyer. The California rebates are almost all gone and they were scheduled not to be gone until 2016 also, but it’s been so popular in California that the rebates have disappeared almost. They started out at $4.50 a watt and now they are down to .20 a watt now. So we are really at a small percentage – its almost ridiculous the size of the rebates compared to what it used to be.
I think the challenge that we face and the challenge that anybody in the solar business faces is to keep costs low enough so people can buy the solar and justify rather than just being green and employing locally and going sustainable. They are not only doing the good thing, but they are doing the right thing economically. And if we can get to the point where the tax credits are on the verge of going away, there will be a huge rush of many people that will want to buy solar before its gone and then the market will collapse. In my opinion, we need to reduce the support slowly and incrementally and predictably as has the state of California with the rebates. When the Federal Government reduces its support on December 31, 2015, this industry will be in for a big, big shake down.
Who are your target markets and how has that changed over the years?
We have done commercial, and industrial and residential applications, but because this is a business that has been ephemeral and there have been booms and busts, we have mostly concentrated on the small business and residential market place.
Do the jobs get bigger the longer you are in business?
We have done large projects. In fact in Long Beach we did the smallest system and the largest system. The largest system up to that point in history was the California community pool and the smallest system was done for my daughter’s science fair project. But we haven’t gone for the big bang; we aren’t a big union shop. This is a family owned company and we believe that we can really provide better service by keeping the operations close at hand.
You have run a successful business for almost 40 years. What advice can you give to young entrepreneurs today who dream of a career in solar energy?
There are so many different levels, it is a business like anything else; there is engineering, there is marketing, there is product development, customer relations. And if anybody would want to get into solar back when I did, I had to spend two weeks in the library to read every book there was and then there was nobody to give me advice. But the advice really is, just as any other business, if you can find a school that has a program that teaches you, you can become an installer. If you want to go to a business school it’s the same business environment we all lived in and so you can get a job with a solar company if you have a business degree. If you want to become a marketing person, there’s nothing more unusual about marketing solar or selling solar than any other product that’s out there. Again, we have the internet is a huge resource and it’s not just a matter of tapping somebody on the shoulder and saying can you help me. You can help yourself. If you know how to Google, you can get there pretty quickly.
What makes your company different from all other solar energy installation companies?
My favorite topic. We have the experience, we have the knowhow and we are dedicated. We want to make sure what we do works because we’ve discovered our best resource for future customers are the ones we are working with today.
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To watch a video of this transcript, please visit http://youtu.be/kQIBPlaFE14
About AMECO Solar
Since 1974, AMECO Solar has been dedicated to the concept that solar energy is the solution to our energy future. Solar energy is unlimited, non-polluting and free. We are committed to providing cost-effective and reliable solar systems and strive to offer the best components available. We believe that using solar energy is simply the best investment available to homeowners or businesses today, since the alternative to solar is just a never-ending monthly expense. Extensive Solar information can be found on our website: www.amecosolar.com .