Latest / Clean Power Hour / Multi-Tenant Solar Solutions with John Witchel of King Energy | EP250

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Multi-Tenant Solar Solutions with John Witchel of King Energy | EP250 · Clean Power Hour

• 0:50
  John Witchel: If you call this up and said, Hey, I'm an EPC developer, and I have a REIT that has a bunch of multi tenant buildings, and they are excited to to build, but they don't know how we're a great partner to do that. And we can do that on a white label basis. We can do that in partnership. We can do that in any configuration that you want to work with.
• 1:14
  intro: Are you speeding the energy transition here at the Clean Power Hour, our host, Tim Montague, bring you the best in solar, batteries and clean technologies every week. Want to go deeper into decarbonization.
• 1:24
  intro: We do too. We're here to help you understand and command the commercial, residential and utility, solar, wind and storage industries. So let's get to it together. We can speed the energy transition
• 1:41
  Tim Montague: today on the Clean Power Hour, multi tenant, commercial solar. This is a hot topic. 90% of the real estate, the commercial real estate in North America is third party occupied. Okay, so listen up, solar professionals, this is going to be a zinger for you.
• 1:58
  Tim Montague: You can now unlock so much real estate with King energy. My guest today is John witchell. He is the CEO and founder of a company called King energy that is tackling this space in 12 markets. So if you work in one of the better solar markets for DG solar, and you know the this is the usual suspects, California, Colorado, Illinois, Minnesota, New Jersey, New York, Massachusetts and so forth, then you are keen to learn about this. And of course, that territory will grow as markets come online, but welcome to the show. John witchell, so happy to have you
• 2:35
  John Witchel: here. Thank you very much. It's great to be here this. This
• 2:39
  Tim Montague: is a topic that is so near and dear to my heart, because when I was a DG solar developer. Now I just look over the shoulder of DG projects with my clients who are EPCs, but when I was developing projects, you know, I ran into a lot of multi multi family or multi tenant, third party owned real estate projects, you know, warehouses, for example, or malls, and generally speaking, I walked slowly away, even though it was a juicy big roof, many times with the big load, it was just very complicated because of what You call the split incentive. And so I think we're gonna get a little background on you, but very first I want to explain. I want you to explain.
• 3:19
  Tim Montague: What is the split incentive?
• 3:19
  Tim Montague: What is the problem with third party occupied real estate? Oh, that's
• 3:26
  John Witchel: a great question, Tim. And I think a lot of people may have heard of the expression split incentive problem, but it's an interesting problem that exists in multi tenant properties, and in particular multi tenant commercial properties, and the split incentive is goes like this, in a multi tenant building, the where each tenant is individually metered, the landlord has no incentive to build solar on the building. And so he doesn't and correct. The tenants have no incentive to build solar on a building they don't own. So neither party builds on multi tenant buildings. And if you sort of sit back and you think, Oh, well, I live in an apartment, why would I spend money in a you know, on my apartment building owner, and my apartment building owner says, Hey, I'm like, I don't really care about this guy's energy bill, so I'm not building so, so nobody does.
• 4:22
  John Witchel: Interestingly, everybody's known what the solution to the split incentive problem is, and that's third party ownership, right?
• 4:31
  John Witchel: But when you look closely at what it takes to do third party ownership effectively and its scale, it turns out that it is is a very complicated problem to solve, and that's that's what King energy set out to do,
• 4:45
  Tim Montague: frankly, the only time I ran into solar that worked on like warehouses, where very seldom is the tenant the the building owner, but there are some tenants that have deep relationships, like clothing companies, where they have so many warehouses around the country and they just have a very tight relationship with their facility owners. And then the facility owner would go, Oh, sure, you could put a solar array on my building and then offset your load. I will let you do that. And then the building owner doesn't own the solar, the tenant owns the solar, and they're making an upgrade because they're making a long term commitment to be in bed together in the same facility.
• 5:23
  Tim Montague: But those are very rare cases, so having a platform like King energy is vital. So why don't you just give us that what exactly is King energy? And when did you start doing this? Sure,
• 5:40
  John Witchel: I think, like a lot of solar developers, I was out in the world looking around and, you know, you drive by a, you know, a large shopping mall, or, um. You know, you'll drive by a large shopping mall and you'll see the roof partially filled with solar, and that's exactly what you're identifying.
• 6:00
  John Witchel: You're saying, hey, REI has roof rights. They have 15 years remaining on their on their lease. They went ahead and installed solar for their own benefit. But what about the pizza parlor? What about the yoga studio? What about the salad shop that's immediately adjacent to REI? All of those companies are excluded from from being able to participate in solar because they don't have roof rights or or the ability to negotiate for those roof rights.
• 6:27
  John Witchel: So they don't, they're, they're literally excluded from some of the benefits of renewable energy. I was flying into LAX and I was looking out the window, and as and as, as you as many people do you see the approach when you come into the LA basin, and I looked out, and you see all these great, big, flat, beautiful, white roofs, and you're like, how, how in the world is this part of the country not completely covered in solar? There's tons of sunshine. It's a relatively progressive part of the country.
• 7:01
  John Witchel: This should be a done deal. And if you look closely, what you're really looking at is exactly what you identified, which is, they're all multi tenant buildings, and energy
• 7:11
  Tim Montague: is expensive, my goodness. I mean, that's why solar happened in California.
• 7:14
  Tim Montague: First, it is progressive. And there, there was an off grid like marijuana industry that was a very early adopter of batteries and solar, but, but for the most part, where electricity is expensive, you're highly incentivized to install solar or wind and now batteries, and it's so interesting that California is, is that market is in turmoil because of net metering 3.0 but we won't dwell too much on that. I mean, I don't know is there does, does nem 3.0 affect your business?
• 7:47
  John Witchel: It does nem 3.0 essentially limited? Are, you know, the economics on a multi tenant building. There's still a pretty terrific opportunity for for new buildings, new construction. And there are corner cases where, where it works. Those corner cases are substantial, but you really, you have to stay on the big picture, right? It's California's was the early adopter. They'll continue to be opportunity in in solar, in California. But when you look at Maryland and jersey and Massachusetts and Colorado and Illinois and all the rest of the the states that are really, you know, really, really following, you know, following in the California footsteps, it's an enormous opportunity
• 8:30
  Tim Montague: and but so your basic business model is to install solar on on, say, a mall, and then you're selling a solar PPA to that facility owner. Is that right? That's
• 8:46
  John Witchel: right. So it's really simple. We we call up a property owner, or REIT or a large somebody who owns, you know, hundreds of buildings, and say, hey, you know, we want to rent the roof. And they say, oh, yeah, we've heard that before.
• 9:00
  John Witchel: And the answer is like, no, we want to rent the roof. We're going to install own and operate the solar and battery systems and and we're going to pay you a flat rental fee period, no complexity. It's a five page lease agreement. It looks like every other lease agreement.
• 9:13
  John Witchel: It's a straight noi to you. So, so what we do with that energy is, is not really your concern.
• 9:23
  John Witchel: Then the landlord says, Well, that's exactly what I was looking for. I just really, I'm in the I'm in the rental business, and they say, Okay, well, just tell me, how are you going to make money? And the answer is, well, we're going to sell this energy to our to your tenants, we're going to sell it to you, and we're going to sell it to your tenants, and we're going to sell it to you at 10% below what you would have paid and what your tenants would have paid if they had pulled it off the grid. So no matter what, your energy is always going to be cheaper, period, and your your tenants energy is always going to be cheaper, and that's a that's a pretty terrific value proposition for the landlords who don't have to lay out any capital, and they enjoy the benefits of reduced cost of energy, and they're able to pass some of that value to their to their to their tenants. And it's a terrific value to the tenants who are completely excluded from being able to participate in solar when you when you don't have roof rights, like I said, when you're in the yoga studio or the salad shop or the pizzeria or the, you know, the tutoring the tutoring studio, right?
• 10:22
  Tim Montague: And then the tenant has the option to opt in or opt out. Is that right?
• 10:28
  John Witchel: They do, and so we do not. We do not require that the landlord modify their lease agreements. Right? Which is, which is a lot of unnecessary pressure. That's like asking the landlord, hey, I want you to modify your lease agreement and require that everybody buy a cup of coffee when they come into the lobby at my coffee shop.
• 10:43
  John Witchel: It's just a from the landlord's point of view. It's a strange ask. They just want to rent their route. They just want.
• 10:49
  John Witchel: Rent their property. And so part of the advantage of saying, hey, it's just 10% discount, is it's it's free market, it's capitalism. People, people will always,
• 11:01
  Tim Montague: everybody wants to save money. Universal view,
• 11:04
  John Witchel: there is, and the simple truth of the matter is, is, you know, they're pulling a significant portion of their energy off the grid. They'll continue to do so, so they don't have reliability issues. There's no concern. We deliver the energy to the tenants. They save money. That's it. There's not there's no complexity here,
• 11:25
  Tim Montague: yep. So let's talk a little bit about how you got into this space. What was your aha moment? And what did you do before King energy?
• 11:35
  John Witchel: Sure. So I've been doing software most of my life.
• 11:39
  John Witchel: I was the co founder and chief technology officer for a company called prosper back in the early 2000s which was an early FinTech company, and I really learned how to write software at scale for financing systems. How to write software to allow people to lend money, collect money, invoice, move money, and and I went and did some other things, but I really got into renewables in 2014 when a company mine was acquired by solar city, and my group went on to to build what became the FinTech platform for SolarCity, and the software that we designed and wrote manages all the loan lease and PPAs of Solar City, and I stayed on that company did about three years there, left with the Tesla acquisition, and that software is still running and will continue to run for another 20 years. And and did some other stuff, but really missed the solar industry. I just, I love the industry. I love being on the right side of history. I love participating, you know, being a helper and being a solution and to climate change.
• 12:39
  John Witchel: And thought, well, how can I use my software skills to to continue to help? And so when I started looking around for opportunities, I was surprised that nobody had really tackled the split incentive problem head on. And I said, Well, that's actually a problem I understand very well. I understand how to solve that kind of a problem.
• 13:00
  John Witchel: Because, again, if you look closely at the split incentive problem, it's actually not a hardware problem, per se. It's really a billing and crediting problem. How do you allocate energy and charge for that energy and collect money from that energy when you have hundreds or maybe 1000s or 10s of 1000s of of off takers of all different shapes and sizes and different load profiles? Turns out that's something I was very uniquely suited to solve because you can solve that with software. Yeah,
• 13:35
  Tim Montague: and this is kind of a geeky question, but my solar installer listeners will appreciate this. So you know you've got today, let's say that tenants are all being sub metered, so you've got these huge meter banks, and tomorrow?
• 13:53
  Tim Montague: Does that infrastructure have to change substantially?
• 13:56
  John Witchel: No, we don't. We don't come in and provide new hardware or unique hardware.
• 14:00
  John Witchel: There are, there are a few people out there who are trying to tackle the split incentive problem at that level. We think that that is challenging and it's difficult to scale. And you know, if you're going to install a unique piece of hardware that's not widely deployed, you need to count on servicing, and you need to count on that property, but on that device being serviceable for 20 plus years, we think it's an easier solution to come in for a software solution and just divvy up the energy, essentially at the at the at the bill level, rather than down at the the electron level. Yeah.
• 14:37
  Tim Montague: But when you're designing that solar facility, you have to know what the total load of the facility is. Do you need to get the granular tenant meter info on the front end?
• 14:50
  John Witchel: You do. And that's that's part of our job. We do that top to bottom, beginning middle and end. So you go to the landlord. They don't know anything about their own meters.
• 14:58
  John Witchel: They don't want to know anything about their own meters. So you have that huge meter bank.
• 15:01
  John Witchel: There's an engineer somewhere in the building that does know, but the building owner doesn't know or care, right? And so we so we come in, we take care of all of that, and and our systems look very much like a community solar system that's built on the roof.
• 15:16
  John Witchel: If you know, we have all this, the same things that everybody else would have. We have weather meters and inverters and and John's all the usual stuff. You know, a solar developer like yourself would walk on any one of our systems. Look around and go, yeah, that just looks like a pretty plain vanilla.
• 15:32
  Tim Montague: So let's, let's take a step further in here. So from before to after, I'm the yoga studio in the mall now gets a king energy solar facility on the roof, and I sign up for that 10% discount. Am I still getting? Up the traditional power bill, or am I getting a power bill now from from the landlord?
• 15:57
  John Witchel: No, you're not getting a power bill from the landlord, because we worked very hard to not put any burden onto the landlord that that that any other tenant would have. So the so the landlord is not an active participant in the in the monthly billing the yoga studio, but you're identifying an important problem is that the yoga studio doesn't want two bills. They don't want, no, they don't they don't want a headache being energy and a bill from from the utility for two reasons, because paying bills is annoying. Nobody wants to do it, and they certainly don't pay a second one. Don't pay a second one. But more importantly, it's very difficult to see the value of solar when you used to get one bill from the utility, and now you're getting two bills, one of which is lower, and the AG, the combined value of the two bills is net lower, like that, even even saying that out loud, conceptually, you're like, Okay, I kind of get it. But God, you know what? I don't want to do it. I don't, you know. So instead, what we do, and a big part of our software, is what we call one bill, right? We do? We combine the utility bill and our bill onto one bill, and very clearly show the savings. And so you'll see two lines on our bill. One bill, one line says the utility is owed $100 the other one line says, you know, King energy is owed $100 King energy's Bill 10% discount. So we're only going to charge you 90 for our bills. Your total bill is $190 you pay us, and then we remit the $100 to the utility. The value above and beyond the simplicity of it is, if you take, you know, last year's bill, and hold it up to this year's bill, the only thing two things will have changed.
• 17:46
  John Witchel: Number one, the logo on the upper left will now say King energy. And the number on the lower right, which is the total amount owed, will be lower. That is something any small business owner can wrap their head around. They look at it, they see it. They say, Oh, I see the value of what I'm doing here.
• 18:02
  John Witchel: This is a good thing. If you have a sophisticated energy buyer, and they want to see all the dirty details we can deliver that. They just check a box on our on our website, and they see the complete granular breakdown, including all of the detailed, non bypassable charges, taxes.
• 18:22
  John Witchel: Did you have a late fee? Did you you know, are you on, on a payment plan? Every permutation that that is out there in the world, we have solved for it, and this is really at the heart of the of the software that we've built. Because in FinTech, the happy path is the easy path.
• 18:39
  John Witchel: Any third year CS student can write a piece of software to generate an invoice. That's not hard to do. What's hard to do is to manage the hundreds of permutations of that bill when it's not the happy path. So the customer calls and they complain, and they say, Hey, I don't know why you didn't get you know, you didn't get my payment. You say, Oh, okay, well, we'll give you credit back if you send the money this week.
• 19:08
  John Witchel: And then it turns out the check bounces, and then you have to put the money back on, and then you have to charge the late fee, and then you have to charge the interest. And then they call you back and they say, I'm still unhappy this okay, we'll waive the interest, we'll we'll waive the late fee, but we'll put the interest on because and we're going to do a three month workout, and then they do one month of the workout, and then they miss the next two months of the workout. And it goes on and on and on, and you multiply that by a couple 100,000 customers, and there's only one way to solve that, and that's with enterprise software. And there's very few people, and there's very few companies that know how to do that at scale, and we're one of them.
• 19:46
  Tim Montague: The Clean Power Hour is brought to you by CPS America, the maker of North America's number one three phase string inverter with over six gig Watts shipped in the US. The CPS America product lineup includes three phase string inverters ranging from 25 to 275 kW their flagship inverter, the CPS 252 75 is designed to work with solar plants ranging from two megawatts to two gigawatts.
• 20:08
  Tim Montague: The 252 75 pairs well, with CPS America's exceptional data communication controls and energy storage solutions, go to chintpowersystems.com to find out more. Well, I happen to have had three community solar companies on the show this year, two of which are working in Illinois, one of which has stayed on the sidelines, but one of the complaints that I hear is that billing is still wonky, and customers do end up having confusion or double billing, and it's a headache. So how much friction is? There. Now I'm just talking about Illinois, and Illinois is, you know, middle of the road in terms of maturity of its of its, you know, virtual net metering market for community solar. There are more mature markets like Colorado, like Massachusetts, like New York, like New Jersey. But how much friction is there in this, in this just transactional financial system of getting King energy onto the bill and making sure that everything is running smoothly and there's no confusion for the tenant or the the bill payer.
• 22:17
  John Witchel: The short answer is, you know, there's none, or there's very little. But in software, there's an old saying is that simple is hard to make it really simple for for a small business owner, is incredibly challenging. In the back office, we have to deal with an enormous amount of complexity. You know, every solar developer has taken a look at it, at an official tariff, you know, PUC approved tariff rate schedule, and it'll make your eyes water there.
• 22:49
  John Witchel: They're enormously complicated documents by design. And then you have to convert that, that, that Tariff Schedule, into software code, and recognize that it's going to change, and it may change later this year, right? It may change in in 18 months. They may, they may.
• 23:09
  John Witchel: They're constantly moving tariffs around. They're moving non bypassable charges around.
• 23:13
  John Witchel: What's taxable, what's not taxable, what's being credited.
• 23:16
  John Witchel: You always have these stub months. You have end of year credits. There's a tremendous amount of complexity. Nobody cares about that complexity.
• 23:28
  John Witchel: They just want to know that they're paying less for their energy bill. And if you introduce any complexity to the end user, the answer is no, they just cancel. It's really that simple. They're not interested in having an experience with energy. So all of the issues that you're identifying, that's our water to carry, that's our burden to solve, yeah, and we work hard to do it. And we have a world class team of software developers and a terrific team of customer service reps and managers, and we do all sorts of sophisticated ser you know, we provide a tremendous amount of sophisticated service. We provide quarterly business reports. We make regular contact with our with all of the off takers, so that we're not just waiting for them to call us when there's a problem, right? They feel like they're being taken care of. So when they do have a question, there's a friendly face, and there's a, there's, there's a, there's a pre existing relationship, you know, there's an old, you know, one of the things that we live by is like, don't, don't try to build a bridge and simultaneously cross it, right? Build the bridge. Build the relationship.
• 24:37
  John Witchel: Build the connection, build the trust. So when something does happen and there is a question, and they call you and there, there's a conversation. There's not just outrage and and that's a huge part of of of what we've built. And it's not just, you know, a guy like you or me taking the call, right? You have to be able to do it at scale, where you're dealing with hundreds of 1000s of customers.
• 25:00
  John Witchel: Yeah,
• 25:03
  Tim Montague: I'm curious. You know, one of the things that is a bit of a puzzle in the solar industry is why the commercial, industrial or CNI space is languishing as much as it is. I get this question a lot. The residential solar industry is larger in the United States than the commercial solar industry, even though there's, I think, more commercial rooftops you know that are available for putting solar on. The square footage of commercial is tremendous. But what are your thoughts about how we can transcend this phenomenon, and what are the barriers that you perceive? So what are the opportunities and what are the challenges that you're overcoming? Sure,
• 25:51
  John Witchel: so, you know, if you look at the first generation of solar developers who went out to commercial CNI properties, you know, they basically went with a really simple pitch. They said, Hey, you should buy my product and services, and you'll save money over time. And so what they were really doing is they're saying, Hey, you should write me the first thing that you should do is write me a check, right? That that's fine.
• 26:17
  John Witchel: That's not a that's there's nothing wrong with that approach, right? But that puts the property owner, you know, in the mode of well, if I had a couple million dollars to spend, is it better to spend it on solar, or should I just buy another property? Should I spend it on solar? Or should I redo the lobby? Right? Should I spend it on solar? Or should I do another HVAC so now let's. And you went from you're competing with a lot of other opportunities that that the commercial property owner has in front of them to use with their capital. We come at it with a very different approach. We say, Hey, we're going to give you money. And they say, Oh, well, I'm in the business of getting money. I would love to hear more about what you have to say. And then those first, you know, and then that, that second wave of of solar developers sort of understood that, and they said, Hey, we want to rent the roof too. And then they said, Oh, okay. I mean, I'm curious about what you had to say. And then they, they came in, and they said, you know, this is what we're going to do. We're going to rent through Oh, but we need you to backstop the credit, or we need you to guarantee the PPA, or we need you, you know, to put this stuff on Bill and load it into your your your your your monthly rent invoice and the all the landlords were like, what, none of my other tenants asked me to do that. Why are you asking me to do that the third generation, which is how I think of King energy, came in and said, Yeah, we those first two generations. Never should have asked you those questions in the first place. You're in the business of renting roofs. We're in the business of renting roofs. Let's just do that.
• 27:58
  Tim Montague: And do you completely avoid the owner occupied segment of the industry. We
• 28:04
  John Witchel: will do that. We do owner occupied, and the landlords will for the same reasons that all the tenants buy our software, excuse me, buy our energy for their common areas, but no more than their common areas, and no more than they consume.
• 28:20
  Tim Montague: And and that's, let's say you have a factory that's owner occupied, and could use, you know, a 500 KW rooftop array, you will, you will install that and sell them a PPA.
• 28:31
  John Witchel: We are capable of doing that. We we aren't that.
• 28:34
  John Witchel: We aren't that competitive in doing that. Okay, right? It's,
• 28:38
  Tim Montague: it's really the, it's really the multi tenant real estate industry that you are burrowing yourself into and let's talk about that, because you clearly are developing relationships with large real estate asset owners. Talk a little bit about that. And what type of a service agreement are you working out with them that that allows you to tackle 12 different markets in the United States?
• 29:02
  John Witchel: Yeah. So, so, you know, our our goal is to service, be able to service, you know, small and medium sized property owners who maybe own five or 10 properties, and maybe, like you point out, there may be in multiple markets, but really our bread and butter and the thing that we do very well is is service larger REITs and larger property owners. King energy is built to be a long term partner from the ground up, we've raised a lot of money.
• 29:30
  John Witchel: We've raised over $36 million of venture capital. We've raised hundreds of millions of dollars of of construction and and project capital, and we've raised it from some of the best names in the business, arc, turn Blackstone, active impact, next frontier capital. These are, these are large, well known investors and and we work with large REITs, and we work with large national tenants. And when we do that, new landlords and new REITs and new property owners, see who we're working with, see our level of capitalization, see that we're sophisticated, nuanced partners that were set up to be here for the long term. Very attractive, very attractive partnership for them. And that's a fundamentally different pitch than an EPC who comes in and says, I'm a terrific builder. Let me build the system for you. I'm not necessarily set up to do much more than some light O M and I'm very good at it, but I'm not the kind of partner that works well with a REIT who's trying to figure out a solution for hundreds of properties.
• 30:56
  Tim Montague: So let's talk about that too. Like, how do you tackle the construction side of this? Do you work with a few very large EPCs. Or are you subbing this to many different EPCs?
• 31:10
  John Witchel: We we sub our work out to EPCs. You have that exactly right. We tend to work with regional EPC developers. We found that people who are in market every day in the regions are the are consistently producing the highest quality work product and so so we will work with we currently have eight EPC partners that we work with. All of them are regional.
• 31:37
  John Witchel: We don't work with any of the large national footprints, because the truth is, most of the. National guys are just subbing to the regional guys anyway, so and taking the markup, and there's value there, like one neck to choke and all that, but I don't want to be dismissive of that. But when you're just trying to get quality work built, the regional guys are where the actions at cool.
• 31:59
  Tim Montague: I love that. What else should I be asking about, and what else are energy professionals curious about?
• 32:05
  Tim Montague: Curious about. This is a, this is a lovely innovation. I I'm, I'm just thrilled and tickled to know about King energy. But what else should our listeners know?
• 32:15
  Tim Montague: You know,
• 32:18
  John Witchel: the main, the main thing that I think is is sort of high value to your listeners, to people in the business, is that we do work with the EPC developers and and there's a lot of EPC developers who have built a very nice, healthy businesses, often with pretty decently sized REITs, and they will generally tackle owner occupied or people who are single, single tenant occupied buildings. First, the the economics and the long term servicing is a little simpler.
• 32:48
  John Witchel: The financing is often a little simpler. It's actually a lot simpler to do it that way, but, but you can work with King energy, too. If you call this up and said, Hey, I'm an EPC developer and I have a REIT that has a bunch of multi tenant buildings, and they are excited to to build, but they don't know how we're a great partner to do that. And we can do that on a white label basis. We can do that in partnership. We can do that in in any configuration that you want to work with, because again, our goal, we're built to be a long term partner.
• 33:24
  John Witchel: We're built to take care of tenants over 20 and 25 years. If the EPC developer wants the O and M business, they should have the O and M business, right? If they need their dev fees, they should take their dev fees. But if they want to leave their their their property, partners in good hands with somebody who knows all of the ins and outs of multi tenant buildings and how to manage that over over multiple decades. King energy is a terrific partner.
• 33:57
  Tim Montague: So if I'm a regional, uh, EPC and I have multi tenant projects that I've kind of put on the shelf. They could be multi family, they could be malls, they could be warehouses. And I want to try to pull those off the shelf. I'm saying to those, and I have dialog with the facility owner.
• 34:16
  Tim Montague: I'm saying, Look, I have a partner who will rent your roof.
• 34:22
  Tim Montague: Hire me to install a solar array on your roof, and then we're going to give your tenants a discount on energy, and they're going to buy clean power. So you're you're creating a green facility out of your existing facility with no money down, virtually no risk other than you now have a solar array on your roof. Am I getting that right?
• 34:42
  Tim Montague: You
• 34:46
  John Witchel: have it exactly right. And that's a better way to do business than trying to piece it together with oh, well, I found this software that that sounds like they kind of do what King energy does and, oh, and I think my financing partner might be willing to finance this, but they kind of want you to backstop it like the like you've done in the other buildings. Oh, and I'm not really sure how to approach the tenants, but, but I guess, you know, the tenants like, like, it's just a mess, right? It's just, there's just a lot of moving parts, if, if you're really just in the business of building solar, and so it's tough to sort of cobble it together, so people don't, or you can just call King energy, and we'll take on all of that stuff, all of it. And we are not in the business of competing with our EPC partners. What
• 35:32
  Tim Montague: is the what is the minimum project size? So
• 35:36
  John Witchel: our minimum project size will come all the way down to 100 kilowatts, if it's part of a portfolio, much below that, that sort of the juice isn't worth the squeeze, right? Or sweet spot is up in sort of north of a half Meg, true. Um, that's what I would
• 35:49
  Tim Montague: expect. Yeah. And I don't know if you'll be able to answer this question, John, but I have to ask so, because I know my EPC clients are are curious about this. And listeners, in a state like Illinois, we have high value renewable energy credits for facility owners. We have renewable energy credits for community solar. We have renewable energy credits for LMI, a separate carve out, right? And then there's the ITC, et cetera, et cetera. But what program, if you're going to a mall in suburban Chicago and installing a one megawatt rooftop array on a big mall.
• 36:28
  Tim Montague: What program are you tapping into for incentives in Illinois?
• 36:32
  Tim Montague: Do you know? I don't. Okay, I'm not. That's that's cool. No worries. I mean, it would either be like Illinois shines that regular rec program. Or it would be community solar within Illinois shines. It's one of those two options. And I'm just curious if,
• 36:49
  John Witchel: yeah, I don't know, off the top of my head, we deal in 10, you know, we, we're in multiple states. Each of those states has multiple, oh,
• 36:57
  Tim Montague: they certainly do.
• 36:57
  Tim Montague: You're, you're a brave man.
• 37:03
  John Witchel: That was the first thing when we were designing King energy. And I was going around and sort of making sure that I had all my my T's, my eyes, you know, dot and cross.
• 37:11
  John Witchel: And people were like, well, you really want to take this on you.
• 37:14
  John Witchel: You know, this is a real complicated business. I'm like, I'm counting on it being complicated. I'm our King energy is good with complexity. And all the things that you just identified, the ITC, who gets the rec credits? How do you allocate the rec credits? Some tenants want rec credits. Some don't care about the rec credits. How do I price it? How do I model it? How do I finance it? How do I do my cash reserves? What's my you know, what's my debt financing? What's my insurance like, that's all our water to carry. We don't push any of those questions under our EPC partners. We don't push any of it onto our tenants.
• 37:47
  John Witchel: We don't push any of it onto our property partners. That's our problem to solve, and that's our value.
• 37:56
  Tim Montague: Well, with that, I'm Tim Montague, check out all of our content at cleanpowerhour.com. Please give us a rating and a review on Apple and Spotify whichever platform you're using. Reach out to me on LinkedIn. I love hearing from my listeners, and you can also connect with me on at cleanpowerhour.com John witchell, how can our listeners find you or your colleagues?
• 38:19
  John Witchel: Oh, that's awesome. Thank you. You can find us at www.kingenergy.com,
• 38:25
  Tim Montague: and with that, I'm Tim Montague, let's grow solar and storage. Thank you so much, John.
• 38:29
  John Witchel: Thank you. Bye.