Green Giants – Episode 19

Aviv Shalgi | Solar Simplified (01:22)

So kind of my background, and the startups I was doing, or I was working on previously, were all around data analytics and machine learning. And how can I use kind of data to improve or solve a problem better, faster, cheaper, and a problem that I found interesting in different industries. And I was hopping between industries. So every one of my previous startups was in a complete different industry. Because I just find that more challenging and more fun to meet new people, learn how different industries work and stuff of that nature. And my last startup was a real estate revenue management software company that got acquired in late 2019 and I took a little bit of time off, spent time with my family, you know travel a little bit, think about what the next thing is gonna be. Then the lockdown started and I don’t have a background in the solar energy, or in the energy space in general. I would say I am an electrical engineer by trade but I’ve never practiced that before, so this whole world was very, very new to me and I wasn’t actually thinking about it, I think I genuinely say I stumbled into it.

So back in the early days of the lockdowns, there were a lot of startups that did kind of professional networking, just give your kind of topics of interest and different times of the day you’re available, different days of the week you’re available. And they would randomly match you with somebody in the same country or in the same city that’s interested in the same topics or similar topics and available at the same time. I’ve done probably about 500 or 600 of those in about six months.

I didn’t have a job. I didn’t join the acquiring company, we got acquired by a real estate firm, not a tech firm, and it just wasn’t something that was interesting to me. They were also located in a different geography and we weren’t planning on leaving Chicago, which is where I live currently. And so kind of the whole point for me was let’s pass the time and meet new people and, it’s lockdown, so you can’t really leave your house.

So I’ve done a lot of those. But six of those, if I remember correctly, were community solar developers and community solar IPPs. And they were all complaining about two major things. One, acquiring customers cost a crap ton of money, excuse my French, and you have to spend that money upfront before the asset exists. kind of usually you would spend it during construction so that by the time the project goes live, finished construction utility came over and actually connected it to the grid. You’re already fully subscribed. So it’s like you’re building a house as a rental property and you’re spending a bunch of money trying to fund renters before the house even exists. Kind of a little bit weird on the timing. It makes total sense to me now that I’m in the industry, but I also understand why people were complaining about that.

The second thing, which kind of up my light bulb, virtually speaking, was that they were all saying, we pay a whole bunch of money to different types of companies, but we never know, are they going to subscribe it on time? When they will subscribe it, like fully subscribe my project? What is my churn going to be? Churn replacement costs extra money in this industry. What is my collection rate going to be? Like are people actually going to pay or not? I have all of these like anomalies and questions and things that I don’t know how they will happen. And as another IPP told me yesterday on a call, they hope with their other aggregators that they will do good. That past performance is indicative of future performance. And so to me, I’m like, hang on a second. Like all six of you, and this was not at the same time, definitely like this is all random on those networking apps.

All of you guys are basically saying the same thing. You’re having trouble acquiring customers, which I’ve done in my previous companies. One of them was an online advertising company, which is public on NASDAQ. So I kind of have that background lined up. You’re not sure about retaining those customers. OK, done that too. And the last thing is about billing and collection, so making sure people understand what they signed up for and making sure they’re paying for it. Those are all things and that’s something I’ve done with the real estate revenue management company because we had to deal with collections and accounts receivables and making sure people pay on time, et cetera, et cetera. And I’m like, I’ve done each one of these in different types of companies. I could probably figure this out just bundling all of these into one.

Obviously I was kind of going on a limb because I have no understanding of that industry, but basically what I did was to go back, call all six again and say, hey, I think you told me X, Y, Z. Did you actually tell me that? And can we dive deeper on that for me to understand? Because I’ve heard this a couple of times from other folks in the industry and maybe there’s something to do here. And so.

They all said yes, and they were all very, very, very nice to take my call again, as somebody outside of the industry, just asking them a bunch of questions. And those were my first six clients. so we actually started, we decided to start the company with clientele that just weren’t served correctly or weren’t served as they wanted to get served. And so we just invented this on the fly with those six and then started expanding as we went along.

Wes Ashworth (06:58)

No, that’s incredible. That whole story and how that all came together is remarkable.

Aviv Shalgi | Solar Simplified (07:03)

And like, and like right before we started the podcast, we were talking about luck, so like, that’s sheer luck. You know, I could have not stumbled on those people and not knowing about this industry and be have a completely different career. So.

Wes Ashworth (07:07)

Right? But to your point, you don’t put yourself out there and you’re not in those conversations, then luck can happen. So you got to be in the right place. But yeah, that’s, that’s awesome. So thinking about that, you know, you’ve been through different startups successfully, you know, exited in different industries, and now you’re new to this whole solar space, community solar space and having success there. But I am curious, what are some of the biggest challenges you’ve faced as an entrepreneur in this industry and how have you overcome them and maybe how those were different than other industries you’ve started up in?

Aviv Shalgi | Solar Simplified (07:47)

Sure, I mean, don’t know if this is a challenge from the industry, but it was definitely challenging to start this company during the lockdowns. And nobody’s traveling, and the conferences were out, and this is, you know, for better and worse, a lot of folks in this industry are a little bit more old fashioned. They want to meet you face to face. They want to shake hands. They want to go out to dinner, which I love that by the way, like I love working with people in person and meeting the people I’m working with and not just having zoom calls all day, but call it the first 18 months, maybe a little bit more of the company’s existence. There were no conferences and nobody wanted to meet you in person because, excuse my exaggeration, but the zombie apocalypse is upon us. And it was very, very hard. So I think for me, it was challenging just on a personal level that I’m unable to meet people and everything’s on Zoom and everything’s on phone calls.

The moment that conferences came back, everybody showed up to the conference because people needed that feeling which I love and you know, we’re recording this a week before RE plus in Anaheim, which is like the biggest conference in you know, the country maybe North America. Everybody attended those conferences whether they were the small regional ones or the major RE plus ones, you know, because that was a feeling that was missing during a call in 2020, 2021, maybe even parts of 2022. So that was a little bit challenging when I started my previous companies, like I could just fly over the following week and meet some of my clients or meet potential prospects and hear their needs in person versus on a very fancy official Zoom call. So that was a little bit missing.

It’s also a completely different industry. So I had to learn the ins and outs and what is a developer and what is an IPP and how does the economics work, who makes what money and when, and stuff of that nature so we could tailor our solution to fit the people that need it. And also for me to be able to focus my attention on people who actually need my service and not spend a bunch of my time on people who are in the industry but they just don’t need it because it’s an EPC company or it’s an O&M company or you know.

It’s a developer that only gets like sells at super pre-NTP, call it just a site lease. Something like that. Like those people would just never talk to me. And so it took a little bit of time just to ramp up, get to know who are the players, who does what, who’s interested in who, et cetera. But that’s also why I jump industries because I like the challenge just personally.

It’s kind of like an enigma or like a puzzle that you have to solve, what fits where and who’s interested in what? And I mean, can’t even tell you like nowadays I spend a lot of my time not doing what I should be doing, you know, but just getting to know more people in this industry still asking them like, what do you need? And, literally somebody texted me this morning, like a lady I met two and a half years ago at a conference at breakfast, she was never relevant for me, I was never relevant for her, but she texted me “Hey, I just switched roles, I moved to another company. We’re getting into community solar. Can we talk and can you explain to us a little bit?”

I think about a bunch of different markets and so, to me, just putting myself out there trying to be helpful to people you know I kind of believe in karma I know it’s a little bit cliche but you know I believe what goes around comes around so I try to put myself out there and hopefully the universe well you know it’ll come back to me it’s one way shape or form

Wes Ashworth (11:32)

Yeah, indeed. And that’s what I love. I think what, to me, propels growth in an industry is when some of the brightest minds from other industries come into that industry as you’re doing. And I think you’re a great example of that, that you’ve seen some other things, you’ve seen some other industries, you see what works, you have this unique perspective sometimes too and how to think about it, which I love. And specific to community solar, it can be complex and misunderstood and some of those things that how they all come together.

And I love this solar simplified, right? It’s taking this complex thing, making it simple. So, can you give us a high-level overview of what solar simplified is doing differently in this space? Maybe then some of the other companies that already exist.

Aviv Shalgi | Solar Simplified (12:10)

Sure. So let me give you maybe a 30 second overview of what we do and then we can figure out the differentiators. So Solar Simplified is an aggregator, subscriber aggregator, subscriber organization in Community Solar. We do not develop projects, we don’t own projects, we don’t finance projects. We are in charge of acquiring the subscribers, managing the subscribers lifetime with a specific Community Solar project they’re assigned to, allocate them for the utility, manage how that allocation progresses with time build them and collect the money at the end of each one. So five different things.

There are a bunch of other aggregators out there. Most of them are awesome. Like, a lot of them are, you know, are genuinely friends, you know. I’m friends with Kieran from Arcadia, I’m friends with Jason from Power Market who was on an episode a couple of weeks ago, I believe, I know he’s awesome and folks over at Ampeon and Solstice and a bunch of other aggregators that are out there. But each of us are different and each of us tackles things differently. To me, again, coming from the outside, from outside of this industry, the thought was never, okay, let’s just build one more aggregator. Like we had to do things differently because we came in late.  I mean, we started the company in 2020. Most of the competition existed back then already, and so, to me, I kind of leaned in to again, the complaints people were sharing with me, especially developers who keep assets and IPPs who buy assets for the long term and I was trying to figure out, you guys are all complaining basically about structure, like the deal structure. It’s not necessarily about the essence. It’s about the risk sharing mechanisms not being there. It’s about the timing of payments not necessarily being aligned. It’s like a misalignment of incentives of some sort.

And so, to me, I was like, okay, if we’re trying to innovate, and again, we’re trying to simplify, well, we’re trying to simplify it for developers, and we’re also trying to simplify it for subscribers. But for developers, the thought was, well, you don’t want to pay upfront before the asset exists. Great. There’s no payment for customer acquisition. I’ll pay that out of pocket, and we’ll have to build that into some other payment, which became the management fee. You know, because people were used to paying upfront plus the management. I’m like, great, let’s get rid of the upfront, let’s just do management. And in some markets, we are cheaper than the market standard for management fee. In other markets, we are slightly more expensive, but we’re not 10x more expensive. So it’s not like even if you can think about this like a mortgage and I’m your bank, the end. You basically don’t pay the interest fees. You just lock in the management fee, you know, you just pay the same management you would anyway. Maybe it’s a little bit higher, maybe a little bit lower, but that’s all encompassing I know the reason for that is because a lot of my folks, like nobody came from this industry, but a lot of folks came from FinTech, from AdTech, like I was before, from real estate tech, et cetera.

And we were kind of honing in on our skills and our past experience, knowing that we can acquire customers probably for cheaper than the industry, which we do, retain them for a longer period of time, which we are, and collect more money from them, or better collect money from them, than the rest of the industry, which we are. And so if I am better just internally, if my costs are better than everybody else’s, well that means that I’m able to take some risks that other folks can’t, which is why we don’t charge for term replacement. Term replacement is also free. And we guarantee full collection, which nobody else does in this industry.

So I take the risk of my subscribers not paying, or heck, even in utility consolidated billing markets, which Jason mentioned the difference between different markets in his episode, by the way, you should all listen to that episode, it’s a great episode. But even in utility consolidated billing markets, there’s a lot of times when the utilities are not pulling off their weight and they’re not paying necessarily on time or in full to the asset owners that are out there. Well, I just figured I know how to do this. And again, I’m aggregating a lot of developers and a lot of projects. So my power of the utilities is going to be probably bigger than any average individual IPP. So I can take that risk on myself.

And you know it has paid off because we’ve have had like a lot of other folks in the industry utilities who were not paying on time But because I’m in charge of a lot of projects across a lot of different developers and IPPs, when I call up the utility, there’s a chance that they will listen more. and there’s also a chance that they will ignore me like they ignore everybody else in this industry. So that’s for better and worse, but I’m willing to take my risk or the risks of my performance, or lack thereof, on me and make the asset owners whole.

And that’s the big differentiator, I think, when it comes to this industry. On the subscriber side, there’s also simplifications. We try to automate everything possible. So I’ll give you just a simple example. Most of the other aggregators out there ask for people’s address when they sign up. Why do you do that? The utility has the address. When the subscriber gave you their account number, you can go to the utility and ask, well, what is the address? Well, most folks don’t do that because they don’t have the connectivity with the utility. So we built the connectivity with the utility through APIs and all sorts of different connectivity methods, each utility with their own tricks and sticks basically.

But we get the account number, we ping the utility and just ask, hey, is this account number real? Comparing the last name of the person signing up to the person that utility tells us has that, and by the way, if those match, can you please give me back the address? And I’ll just show it to the subscriber and say, is this your address? Can you just click confirm? This will save the person five to 10 seconds and call it 20, 30 keystrokes from entering that. It’s simpler, and if we can do that with a bunch of other things well now we’ve shortened the, you know, the five to ten minutes it takes to sign up to less than two minutes to sign up, so it’s a lot easier. We get a higher conversion rate less people dropping off which means we get more subscribers.

Wes Ashworth (19:01)

Yeah, I love that. That in itself is so simple, but it’s so profound. And we all know as consumers, we’re impatient and kind of like, if something’s a little too complicated or we start getting irritated or you have to fill out too much information, we bounce. And so even just those small changes. then like you said, you multiply that over all these other different areas and you’ve really got a much more simplified process and going in and making it easier. So I love that.

Aviv Shalgi | Solar Simplified (19:29)

I mean, I can give you the statistics just from the advertising space. Every field, you ask a user to fill in, not talking about docuSigns and stuff like that, just literally a text field. Your birthday, your name, your email, et cetera. Every field on average causes a 30% drop in the number of signups. That’s just across online advertising, any type of industry, any type of product.

So I’m asking you for your home address, your city, your zip code, your state, your utility, your phone number, your email. Like that’s a whole lot of information. If we can cut down on those. Yeah, that’s why I mean, I believe the average conversion rate, I think NREL published that a couple of months ago. The average conversion rate of people signing up to community solar just in general, think it’s about one out of 10 ,000. So just all of the aggregators together, and this is residential, I’m not talking commercial and stuff like that. Residential, one out of, call it a few thousands, let’s assume that NREL might’ve, you know, over, were over cautious in their data. One of a thousand people sees, hears about  community solar and decides to sign up. That’s insane. That’s crazy. My average statistics, one out of 20 at Solar Simplified. And it hasn’t, and we haven’t had so much time to actually A-B test everything we wanted to A-B test. Cause improving one out of 20 to one out of 10 is almost insignificant to me.

But it’s just crazy because people hear about Community Solar and they’re like, okay, this is a scam, I’m out. That’s why the number is so high and there’s so many steps that regulators ask for during the sign up flow and disclosure forms and consumer compliance and all sorts of things, which all of them have good intentions. I don’t think anybody’s trying to, you know, overdo this to prevent the community solar from existing. I’m speaking of like the regulators out there, you know, but sometimes some of the states overdo this and you know, I live in Chicago, so I’m an Illinoian and in Illinois until not too long ago, consumers signing up, myself included, had to sign a 17 page disclosure form. This is a state disclosure form, it’s not even your contract with the aggregate or with the project. That’s just like what the state requires. Who’s gonna read 17 pages to save five bucks a month or 10 bucks a month on their bill? It’s just insane. And so myself and a bunch of other aggregators like, pulled in went to talk to the Illinois power authority, which is the overarching regulator on the community solar program just said this is crazy. So we were able to cut it down to five if you ask me five is also way too much should be one page But five is a whole lot better than 17.

It’s a lot of those steps, you know and same goes for the fight many of us have myself included with the utilities to have consolidated billing, because it’s easier for subscribers to understand when they see, I got a hundred bucks and had to pay 90 bucks for it back. It’s two lines right next to each other, versus some states are dual billing, you get the hundred bucks on the utility bill. It’s gonna take the utility about a month to tell us that you got that 100 bucks, then we will send you 90 bucks. That’s another, call it a couple more days, let’s call it a week. So it took probably about six weeks, maybe longer to get your $90 charge on the $100 value that you received. So the $100 we paid off of your original utility bill and six weeks and maybe didn’t keep your utility bill back then, you have to start digging it up again.

Just very, very uncomfortable and over cumbersome. So trying to simplify as much as I can and if I can pull in a bunch of other industry people, whether it’s other aggregators out there or developers or IPPs or EPCs or whatnot. That’s my goal because a simple life for me means a simple life for everybody in this industry.

Wes Ashworth (23:52)

Right? Absolutely. And to get more into that, you mentioned, I know we talked about this before, some of the issues with regulators, like in markets like New York or in Illinois. Can you expand a bit more on those challenges and then how they impact community solar as a whole?

Aviv Shalgi | Solar Simplified (24:08)

Yeah, mean, every… The good thing and the bad thing about community solar is that it’s state regulated, it’s not federal regulated. So there’s no overarching regulation across the states. Every state, for better or worse, is trying to look at what the other states are doing, tries to improve on some of that, but also tries to kind of reinvent the wheel in some cases. Like, they all screwed up here and here and here and stuff, let’s just build on top of that. Let’s try something completely new and test that out which is fair listen if other folks did not figure it out it’s totally fine it’s completely legitimate to try to reinvent the wheel but it also could cause a lot of mess like if if you didn’t get it right it’s again 17 pages of disclosure forms where the intention was of the Illinois regulators, which I appreciate as an Illinoian, was to protect consumers and make sure consumers understand what they’re signing up for, et cetera. The crazy part is that community solar is a guaranteed savings product, so there’s always bad actors out there and especially in dual billing states, you could figure out how to screw the customer, the subscriber, by making up some numbers that are not real, and the regulators should enforce and should have oversight over all of the aggregators and make sure we’re all compliant, which most regulators do.

There are audits, there’s annual reports that we have to submit. There’s deeper reports we have to submit every couple of years, et cetera. So that happens. But to me, it’s just a little bit weird that if I compare our industry to call it the retailer, the rep industry, sell you energy instead of your utility company, and they can sell you whatever they want under the sun and because they’ve been around for 20 years, and they figured out the regulation, regulators feel comfortable with that. But that product in many cases, not all cases, in many cases costs more than what the utility would charge you, especially as a residential consumer.

Full disclosure, I got scammed when I moved to this country and I’m not gonna name the retailer that scammed me or tried to scam me, I picked it up fast enough for me to cancel and not get screwed, but a lot of folks don’t check their bills on a monthly basis and so to me, it’s a little bit weird of, why does the deregulated energy space have consolidated billing across all markets when their products could potentially cost more? It could cost less. So it depends who you’re talking to and what product you’re buying into. But community solar, which is a guaranteed savings product, is still a dual billing offering in 95% of the states. Crazy. And when we go and talk to regulators about doing consolidated billing, just like the retailers do, because many of the community solar markets are also deregulated energy markets. Not all of them, but many are. New York and Illinois and Massachusetts, et cetera, et cetera.

Everybody looks at us as if we are aliens, dropping from the skies, and they have no idea what we’re talking about. Like, you’ve been doing this for 20 years, why is it so damn hard to simplify this process? Yes, it’s going to be simple for us, it’s a little bit less risky for the asset owners, for the IPPs. It’s a whole lot less risky for consumers, and especially to low income consumers that think they’re going to get scammed. And so if everything is on the same bill, very clearly readable, we’re just gonna get more people to sign up for this. And in my personal opinion, I’ve been fairly vocal that I do not acquire, call it like, Fortune 500 subscribers, Fortune 500 anchors, to my community solar projects. I’m happy to service them and you know, obviously I would not lose a deal for, if that is mandatory by the financing parties, the lenders, tax equity, whatever. So I will do that if I’m forced to, you put my arm behind my back. But if the asset owner of the financing parties don’t care, I personally have an ethical issue with giving, you know, hundred dollar savings or a thousand dollar savings a month to a Fortune 500 company that to be honest, between all of us, could care less about this because this is not considered green. So they cannot because they don’t get the recs in most markets.

And so for SEC purposes, they cannot call this green energy. It’s community solar. It’s driven by green energy, but this is not making them green. That’s out of the question. So if it’s just savings, they’re not going to see it in their annual reports that they saved $10,000 that year on the electricity charges. But if you split that $10,000 to 100 households or 100 small businesses, they actually feel, you know, 100, 200, 300 bucks a year in savings, because they’re not making so much money, you know, and especially if you think about low income, you know, households and stuff like that, even more, you know. So, to me, I have very strong opinions, most of the people that know me in this industry know already, that we have to drive simplicity because without simplicity, this industry will remain very, very small.

And I think we’re making good headway. We’re making good headway. More consolidated billing markets, you know, are slowly more markets are transitioning to consolidated billing, or at least are talking about it, you know, more regulators are talking about, you know, putting an emphasis on small commercial mom and pop shops, residential, low income subscribers versus the super large commercial, so I believe we are headed in the right direction. Otherwise I would not be here.

But the simplifications of it, it’s like that’s a must. And I’ve simplified as much as I can for developers and for subscribers, but we were trying to pull in the regulators and the utilities and the other actors out there to help create a better, simpler, easier industry to work in.

Wes Ashworth (30:46)

Yeah, I love that. keep it simple. But yeah, like you said, you’re doing your part. Now you need the other parties involved to help do their part as well too. And thinking about that a little bit just in terms of the future, you mentioned obviously the trajectory is positive and the way that’s headed. How do you see community solar evolving over the next few years? And then what needs to change for it to scale effectively or more effectively?

Aviv Shalgi | Solar Simplified (30:49)

Yeah, I mean, listen, it’s even the past four or five years since I joined this industry, like the industry has grown a lot. When I joined, there were a couple of markets and they were all fairly limited. Now we’ve got, I want to say like, probably close to 15, 20 markets that legislated community solar in one way, shape or form. And when I call community solar, I speak about the discount product. So not the community solar of Florida that costs you extra money, not community solar of Kansas that costs you extra money, but what we see in New York and Massachusetts and Illinois and Oregon, Maryland and Delaware, et cetera, et cetera, where the subscriber, whoever they are, get a discount on their bill so if we generate a hundred dollars on their behalf they’ll have to only pay back 95, 90, 80, 50, something less than a hundred, you know, so opening more states and more markets I believe will be the growth of this industry like that will make us or break us. But even just growing within the states that we’re already active in will be huge.

You’ve got right now there are only two, I believe, there are only two uncapped markets where you can build as much as you want and there’s no cap from a regulatory perspective. Those are New York and Illinois. Most of the other markets are capped in one way, shape or form. You know, New Mexico just passed legislation a while, not too long ago. I don’t remember exactly how many megawatts but they call it like 100 megawatts a year. Or sorry, it’s 100 megawatts finite. People got awarded and we’re waiting for the next batch of awards and we don’t know if it’s going to be 50 megawatts or 100 megawatts or 500 megawatts. We don’t know when that’s coming. Those, that missing continuity definitely prevents developers from developing because at some point a developer, a new developer might say or an existing developer in a specific state might say, “Well, should I continue to develop another five megawatts here, another seven megawatts there, another two megawatts here, et cetera, when I don’t even know when those could go online?”

At least if you know, okay, it’s gonna be a two year waiting time. And then we’re getting it, then we’re off to the races. Okay, great, that’s fine. But if you don’t have the continuity, it’s really hard to build a business that way, and if I were a developer, I would be scared of that because you’re putting a lot of eggs in a very small number of baskets. Most developers are not the two guys in a truck, but call it the 10 guys in a couple of trucks.

It’s still fairly small companies, not everybody’s backed by huge private equity firms, etc. And yes, we have the very large developers as well, obviously, they’re well capitalized, but a lot of developers are small shops and they can’t take the risk. They’ll risk one or two or three or five projects per market, but they’re not going to put all of their eggs in a market that they just don’t know how the regulations are going to look like, how incentives are going to look like, even heck, maybe if there are no incentives, when am I going to be able to build this? So the ambiguity, I think, is going to be the biggest hurdle we’ve got.

 The flip side though, is that again, this is state regulated and every state has their own regulation, their own timelines and their own rules, which means that if you’re in multiple states like we are, the diversification kind of helps to smooth this out. A lot of our developers are not just in one state. They’re in two or three, you know, and I’m talking about the small folks, not even like the big guys were like in five or ten, you know, they’re in two or three cause they understand they have to diversify against the regulatory risk of things just, just even think stalling, you know, and I can give you like an extreme example.

When I joined, like when I was thinking of starting solar simplified, everybody were telling me Pennsylvania is right around the corner. It’s September 2024 as we’re recording this session. Pennsylvania has still not even voted on the bill that would allow community solar to get created, and then we’re obviously going to have to go through tariffs with the regulatory authority and you know, then run it by the utilities in Pennsylvania and actually like, even if they pass it today, we’re like two, three years out probably. And they haven’t passed today. And it’s been five years since people told me we’re almost there in PA. And there’s a bunch of other states as well. Like every state and every regulator has their own timelines. And again, for better and worse.

You know, we have to diversify all of us as an industry through multiple markets. So if one market stalls or more one market gets shut down for a while. Well, we have a bunch more markets to keep running on. But my hope is that, and I think as we mature as an industry, we have less of these, you know, start, stop, start, stop scenarios. And it’s just a start slow, speed up, and some folks will speed up faster and some folks will speed up slower. But there’s no halting of specific markets that’s happening. Because it drives everybody insane. Drives subscribers insane because subscribers might get stuck on a waitlist for two or three years.

Now I have a general rule that everybody that works with me knows that we don’t acquire subscribers before the project is getting into construction. Meaning it’s past all the regulatory hurdles and it’s past the interconnection you know studies with the utilities and we know the timelines so we can convey to subscribers if you sign up today you should see this in six months. Now I can’t get guarantees because I can’t control the utilities doing interconnection work, but most of the time we’re right, you know, and we can frame this correctly to subscribers. But I know there are folks out there, they will have to excuse me for, you know, for mentioning this, but there are folks that acquire subscribers, my competitors, who acquire them without projects being there.

And while that looks great for the developers and the IPPs, because you can just drop 10,000 subscribers on them in 24 hours in a click of a button, that is terrible customer service. And that increases churn cause people don’t even remember they signed up for this two years ago. Heck, they might not remember they signed up for this six months ago. And it definitely increases defaults and non-payment and collections issues. Cause if I don’t remember signing up for something, and 18, 24 months after I did sign up for this, I suddenly get a bill in my email or worse in my mail. I’m like, that’s shredded and goes to the garbage can. Like, I don’t know who you guys are and stop sending me these bills because I’m not paying, it’s just terrible customer service. And so, you know, for me, even again, because I take the risk of acquisition and term replacement, all of that on myself. I’m not in the business of losing money and so I don’t want to keep all these huge wait lists, and have that shirt, and have those collections issues because that means I’m losing money.

But, you know, it comes with the regulatory risk of the start stop and everything around that because people are running really fast and slowly for market stops. What do you do? So hopefully I believe we’re getting like we have a big consortium of companies, you know, especially with the large aggregators and a bunch of the large IPPs as well. We’ll try to drive all of the regulators to the same conclusion. Maybe the paths will be different, but to the same conclusion that we need to have a stable program, we need to know the game we’re playing. You can’t start playing basketball and change it halfway to baseball. Doesn’t work like the rules need to stay the same. Maybe the rules improve like, you can start playing basketball, you know in the Euro League which is very different from the NBA, the pace is different the times are different, you know stuff like that, but it’s still basketball. Like, people still understand that this is basketball that’s fine but you can’t change the rules of the game halfway or can’t just stop the game halfway wait for a year or two and just restart it again so I feel those are the biggest challenges, but we’re all working together on fixing them, which I think is a positive.

Wes Ashworth (40:05)

Yeah, which is always something I love to hear. I think as the industry, that’s something we do really, really well, is kind of working on these problems together and collectively where it does make sense. think that’s always amazing to hear.

Aviv Shalgi | Solar Simplified (40:16)

So many good people, I would say, in this industry, truly. I mean, and there’s always in every large industry, there’s bad apples. But I can tell you having switched industries, I think six times in my life, this is by far the industry where most people actually care about doing good. And I’m not talking about fighting climate change and the fact that it’s renewable. It’s literally just doing good, ethical, business and not screwing anybody over, not stabbing anybody in the back. Like, you know, if you have a gentleman’s agreement, gentleman’s handshake, then most of the time you hold that handshake. And so I really love and appreciate this industry, you know, just because it’s awesome people to work with. And again, I’ve been in industries where you don’t talk to your competition. Even if you stumble on them in conferences and stuff, don’t collaborate together because it’s me or you.

Versus in this industry listen to the number of policies, and I wrote together with you know folks from Arcadia folks from Power Market folks from and beyond You know like the top competitors you call it like top five competitors all writing policy together. And yes, each of us tries to pull it in a different direction, but we end up with something we all agree on That’s just insane that like that’s amazing in my opinion, and that’s why I love being here

Wes Ashworth (41:25)

I agree. I agree completely. And I would say that is something very unusual, but it’s one of the most beautiful things with our industry that I really love. And I think it will perpetuate the growth and scale and all those kinds of things as we work with our collective mind. But no, I agree with that. So as we get closer to time, I want to leave a little room just to have you go into, some of the biggest, guess, misconceptions or maybe just the one, like the biggest misconception in community solar. Can you speak to that or something that comes to mind and again, something that you would like to clarify or help just in terms of that knowledge standpoint?

Aviv Shalgi | Solar Simplified (42:20)

Sure, so let’s do two. We’ll do one of the subscriber side and one of the developer IPP side. Subscribers is easy for anybody who’s not from the industry listening to this podcast. We all know community solar sounds like a scam. You just sign here, here and here and we’ll pay a portion of your bill for you, whether it’s 5% discount, 10%, 20%, 50%, 90%, doesn’t matter. You know how much discount it is when you sign up, it’s truly not a scam. We’re utilizing the inefficiencies of utilities and of the grid in order to build something that is just more efficient and more cost effective. So we’re not really selling you a dollar for 90 cents, it didn’t cost us a dollar as an industry, it cost us 20 cents. And so for us to sell it at 80 or 90 or 50 or whatever other number is easy and we’re happy to do this, you know, so the discounts don’t mean that we lose money. Everybody makes money, nobody’s in the business of losing money, like I mentioned before, so it’s really not a scam. Talk to your regulators, talk to the regulatory authority or your senators or your governor, et cetera. If you’re in a state that has community solar, this is truly legit. People save money.

I have subscribers here in Illinois who are literally saving 500 to a thousand bucks a year. Now, obviously their bill needs to be very high for them to save those amounts of money, but it’s a whole lot of money. I believe our average savings on a residential subscriber for the last five years we’ve been in business was about a hundred and twenty hundred fifty bucks a year. That’s a whole lot of money. That’s you taking your kids to the movies with popcorn and drinks and paying for parking and everything, you know, a couple of times a year, you know, two or three times a year. Not bad. And it takes two minutes to sign up, whether you sign up for Solar Simplified or you sign up for somebody else.

Obviously you should check out Solar Simplified. You know, have to plug myself in for a second. So that’s one big misconception. It sounds like a scam and I think all of us need to work better to improve the trust. None of us, and I remember in Jason’s episode he mentioned that as well, we should not be spending, in marketing dollars, to acquire subscribers. This is truly a no-brainer and people should be knocking on our doors to sign up for this because it is a no brainer. The problem is as an industry, we’ve over complicated this and it sounds like a scam and it looks weird. And there’s a lot of disclosure firms, like I mentioned, and we just don’t explain it the right way as an industry, and so we’re missing that trust. Which causes customer acquisition to be to cost a lot to take a long time, churn, et cetera, so that’s a misconception on the subscriber side.

I think the other misconception on the developer IPP side, and I will obviously hone in on something that’s related to me, it feels to me, especially the last, call it year or two that a lot of the developers and IPPs have just gotten used to how things are being done. They’ve gotten used to customer acquisition costing hundreds of thousands to millions of dollars per project. They’ve gotten used to churn being 10 to 20 percent a year. And they have to pay more for churn replacement, by the way, they’ve gotten used to the fact that collections is an issue and that’s okay, you know.

I had a call from an IPP that we work with who shared with me projects that don’t work with us, they’re subscribed with another aggregator that they’ve had 20% bad debt. So 20% of revenue is not coming in. This is ongoing projects. It’s not a new project. It’s a stable project that’s been managed, I believe like three or four years now. A couple of projects in a specific state and it’s a big aggregator. And they’re okay, just got used to not getting 20% of the money, and that’s insane to me. You know, you should not, you and me and all of us here in this industry should not be okay with bad performance. Like even if the project’s still pencils and the lenders are still okay with it and tax equity is still okay with it, we should not be okay. We should strive to do better, you know?

And so, the misconception that I’m trying to get people to understand is you should not be okay with paying so much money for customer acquisition. You should not be okay with paying so much for term replacement. You should not be okay with bad debt and with collections issues. And if you want to learn more, know, reach out to me on Solar Simplified, but no, just like, again, generalizing, so not to plug myself in, you should talk to your aggregators and you should demand a better service. Because all of us can do this, and if somebody can’t do this, they should not be in business. But the reason they are in business is because it’s a new industry, and it’s okay to screw up, and we’re all learning together, and five years ago, this was a much tougher industry than it is today. But my personal recommendation, even if developers and aggregate and IPPs don’t come to talk to me, which saddens me. I hope to get to know everybody in this industry, regardless if they work with me or not. Because again, I think everybody’s awesome here. But even if you don’t come to work with me, at least ask for a better service. Try to make sure that the risk sharing mechanisms are in your contract.

The fact that some IPPs and some developers pay, get a bad service and they pay more to improve that service is just crazy. That doesn’t exist in any other industry on the planet. And this is practically a real estate industry, you know, we get the land, we get the zoning, we get the permitting, we build something, and then we kind of lease it out, so to speak. Like yes this is not residential lease, we’re kind of selling the energy so people can’t paint the walls and stuff of that nature, which I’ve seen a lot in my real estate company before, but it’s kind of like real estate, it’s very close to it. And so we should demand the things that the real estate folks figured out 50 years, 100 years ago. So those are really two big things I would hope to debunk with today’s episode.

Wes Ashworth (48:49)

Yeah, no, it’s so, so good. So well said and a great way to, I think, conclude and wrap this up. But, Aviv, thank you so much for coming on, sharing your journey, candidly sharing about the challenges you’ve encountered and the innovative work that you’re doing just to make community solar more accessible and simple. It’s really clear that your vision is helping pave the way for a simpler, more affordable renewable energy future, which is so important.

To all our listeners out there, always, we appreciate you tuning into this episode of Green Giants, Titans of Renewable Energy. If you found value in today’s discussion, be sure to subscribe, share it with your network, and stay tuned for more insights from the trailblazers driving the clean energy revolution. And by all means, go check out Solar Simplified and reach out to them today or tomorrow. But thank you so much, and we’ll see you next time.