Latest / The SME Stream / John Harman: Lightforce Solar owner reveals why the solar power business is hard in New Zealand

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John Harman: Lightforce Solar owner reveals why the solar power business is hard in New Zealand · The SME Stream

• 0:00
  Speaker 1: The owner of a solar panel business, has weighed in
• 0:02
  Speaker 1: on why he thinks Solar zero has failed.
• 0:05
  Speaker 2: So.
• 0:05
  Speaker 1: Solar zero was a solar panel subscription service that was
• 0:09
  Speaker 1: unexpectedly put into liquidation by its one hundred percent yearholder,
• 0:12
  Speaker 1: black Rock last week. John Harmon is the owner of
• 0:16
  Speaker 1: light Force Solar enders with us this evening.
• 0:18
  Speaker 2: Hi John, Good afternoon Jack.
• 0:21
  Speaker 1: Were you surprised by the Solar zero announcement?
• 0:25
  Speaker 2: I was absolutely stunned. Yes.
• 0:27
  Speaker 3: Why well, they had such a huge pool of money
• 0:32
  Speaker 3: behind them, and and you know, they had a pretty
• 0:37
  Speaker 3: awesome proposition that you could put solar panels on your
• 0:40
  Speaker 3: roof at no charge, So it was amazing.
• 0:43
  Speaker 2: I was astonished.
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  Speaker 1: Yeah, I mean it does from a consumer perspective, putting
• 0:47
  Speaker 1: solar panels on your roof and no charge does sound
• 0:50
  Speaker 1: pretty good. But I suppose from a business perspective that
• 0:52
  Speaker 1: there might come with a few more fish hooks. So
• 0:54
  Speaker 1: explain to us why did solar zero close down?
• 0:59
  Speaker 3: Well, I mean the thing is, we're at the end
• 1:01
  Speaker 3: of the supply chain from China. A lot of the
• 1:05
  Speaker 3: batteries and the technology that we installed five to ten
• 1:09
  Speaker 3: years ago are our pasts are used by data need replacing.
• 1:13
  Speaker 2: So that's the first thing.
• 1:16
  Speaker 3: And the second thing is that you know, the contract
• 1:21
  Speaker 3: was for twenty five years and most people buy and
• 1:25
  Speaker 3: sell their house within seven to ten years, and that
• 1:28
  Speaker 3: contract had to be transferred to the new owner, so
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  Speaker 3: that caused a problem. I mean, for instance, the final
• 1:36
  Speaker 3: thing is that the price of panels and the qualities
• 1:38
  Speaker 3: come down, so you can put twenty thousand dollars worth
• 1:42
  Speaker 3: of panels on your house and that adds thirty thousand
• 1:45
  Speaker 3: dollars worth of value to you when you sell it.
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  Speaker 3: So all of those factors I think played into the
• 1:50
  Speaker 3: demise of black Rock.
• 1:52
  Speaker 1: So explain that point to us. So you can put
• 1:54
  Speaker 1: twenty thousand dollars worth of panels on your roof and
• 1:57
  Speaker 1: that increases your house value by more. Explain that to us.
• 2:02
  Speaker 3: So that's that comes from Sydney, Australia. The fact that
• 2:06
  Speaker 3: you've got independent energy source and these panels last for
• 2:11
  Speaker 3: thirty years increases the value of your house.
• 2:14
  Speaker 2: So you increase the value of your house.
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  Speaker 3: You probably produce about twenty five to thirty percent of
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  Speaker 3: your power off the roof for the next thirty years.
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  Speaker 3: And if you move things around and sort of plugging
• 2:26
  Speaker 3: your EV during the sunny day, you get free juice
• 2:30
  Speaker 3: to run your car.
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  Speaker 2: So there's a lot of positives about.
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  Speaker 3: Being independent and owning your own, owning your own sort
• 2:36
  Speaker 3: of generation source.
• 2:38
  Speaker 1: Yeah, I mean absolutely. It's the capital cost that's often
• 2:41
  Speaker 1: the challenge for people, right. But I suppose if you're
• 2:43
  Speaker 1: putting panels at a capital cost of twenty grand on
• 2:46
  Speaker 1: your roof and you're going to be saving on power
• 2:49
  Speaker 1: to the tune of ten grand in the future, if
• 2:51
  Speaker 1: not more, then it does make sense. So how's your
• 2:53
  Speaker 1: business going, John, how's Lightfoce solar going at the moment?
• 2:57
  Speaker 2: Well, we can't keep up with demand.
• 3:00
  Speaker 3: I mean, the people are aware that power prices are
• 3:04
  Speaker 3: going up. They're aware now that they need resilience and independence.
• 3:09
  Speaker 3: So we've got a three month waiting list to do
• 3:11
  Speaker 3: an installation. We're in about seven places around New Zealand,
• 3:15
  Speaker 3: major centers, so we can't keep up with demand.
• 3:19
  Speaker 2: Yeah.
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  Speaker 3: I mean it's really reached the tipping point where the
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  Speaker 3: price of power, the price of panels, and the feeling
• 3:27
  Speaker 3: that Kevis want, which is to be independent of the
• 3:29
  Speaker 3: big boys, all of that's quite a moving feast and
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  Speaker 3: it's really the tipping point for us.
• 3:34
  Speaker 1: Yeah, So do you think that Solar Zero, because of
• 3:37
  Speaker 1: its kind of unique structure, was an outlier and that
• 3:42
  Speaker 1: other solar providers in New Zealand have more robust businesses
• 3:46
  Speaker 1: even in these trying economic times.
• 3:48
  Speaker 2: Yeah.
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  Speaker 3: Absolutely, you just have to right size your business. And
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  Speaker 3: we don't have a legacy of old customers requiring upgrades and.
• 3:56
  Speaker 2: Stuff like that.
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  Speaker 3: So you know, if we do any upgrades with people,
• 4:01
  Speaker 3: they say I start off with ten pounels, but now
• 4:03
  Speaker 3: I want another ten or they say I want ten
• 4:06
  Speaker 3: pounds in a battery because I trust that.
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  Speaker 2: It really works.
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  Speaker 3: So you know, that's a different model to least to own.
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  Speaker 3: And we're quite a small population in New Zealand, and
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  Speaker 3: you know people want to go with you know, they
• 4:22
  Speaker 3: often buy local and they want to buy locally owned.
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  Speaker 3: We're a New Zealand owned company that they almost all
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  Speaker 3: of my installation guys have been with me ten years.
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  Speaker 2: They're real experts. And it's not one size fits all.
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  Speaker 2: You know, each roof is different, each budget is different.
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  Speaker 3: So you have to you have to you have to
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  Speaker 3: make sure that you're meeting people's expectations and meeting the budget.
• 4:48
  Speaker 1: Yeah, yeah, I mean that makes total sense, you know,
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  Speaker 1: it's fascinating to look at what Australia has done on
• 4:52
  Speaker 1: the solar front. And obviously there are different climatic conditions
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  Speaker 1: in Australia, although I suppose a city like Melbourne would
• 4:59
  Speaker 1: be relatively comparable, relatively comparable to a city like Auckland.
• 5:04
  Speaker 1: But are there things that you think the government could
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  Speaker 1: do john that would make it easier with regulation that
• 5:10
  Speaker 1: would speed up the uptake of rooftop solar.
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  Speaker 3: Absolutely, any new house should have rooftop solar mandatory, so
• 5:19
  Speaker 3: that's new bills.
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  Speaker 2: We should have recognition that.
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  Speaker 3: If you put a battery on that you're creating resilience,
• 5:28
  Speaker 3: and you can use the battery to a charge from
• 5:31
  Speaker 3: the grid during cheap power prices and discharge to the
• 5:35
  Speaker 3: grid from high power prices, so you basically become a gentaile.
• 5:40
  Speaker 3: You generate power and you can sell power and those
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  Speaker 3: are the things that modern technology is allowing you to do.
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  Speaker 3: And that's an ever increasing wave. I mean in Australia,
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  Speaker 3: of the whole energy system, twenty two percent is rooftop solar,
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  Speaker 3: not solar farms. Rooftop solar use theland it's aboutzero point
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  Speaker 3: one percent. We've got a long way to go.
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  Speaker 2: Yeah.
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  Speaker 1: Yeah, that is amazing, isn't it that. I mean, again,
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  Speaker 1: very different kind of climatic environment, but that is quite remarkable. John,
• 6:11
  Speaker 1: How did you go from being a breast surgeon to
• 6:13
  Speaker 1: the owner of a solar panel company.
• 6:15
  Speaker 2: Well, I'm the accidental owner, Jack, so thanks for that.
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  Speaker 3: I really saw this as the future of New Zealand,
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  Speaker 3: and I'm an entrepreneur and I invested in the company
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  Speaker 3: and then it grew so big that I had to
• 6:29
  Speaker 3: buy the original founder out, as often happens, and grow
• 6:33
  Speaker 3: it in the direction that was most business like.
• 6:36
  Speaker 1: Right, Yeah, that's amazing. How different is your life then?
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  Speaker 1: You enjoying this?
• 6:42
  Speaker 2: Yeah? I do. I mean I see.
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  Speaker 3: I asked some of our installation guys when I first
• 6:47
  Speaker 3: invested in the company, I said, how's it going? And
• 6:50
  Speaker 3: they said, Johnny, I have a different view from my
• 6:53
  Speaker 3: office every morning, and I'm saving the planet.
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  Speaker 2: It's the best job in the world. And I have
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  Speaker 2: that sense.
• 7:00
  Speaker 3: Within our community that we're doing right by our community
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  Speaker 3: and we're doing right by global warming. So and it's
• 7:07
  Speaker 3: really plugged into the latest technologies that are fast moving.
• 7:11
  Speaker 2: So it's exciting.
• 7:12
  Speaker 1: Yeah. So for people who've been considering going solar for
• 7:15
  Speaker 1: some time. Do you reckon there are going to be
• 7:18
  Speaker 1: big reductions in the cost of solar panels in the
• 7:20
  Speaker 1: years to come. I mean, it keeps getting cheaper and
• 7:22
  Speaker 1: cheaper and cheaper, but for how much long is that
• 7:24
  Speaker 1: going to continue?
• 7:26
  Speaker 3: Well, no, we're starting to see panel prices at their
• 7:30
  Speaker 3: cheapest and they're putting in slight price increases, so they're
• 7:34
  Speaker 3: at the highest quality and cheapest price now that they're
• 7:39
  Speaker 3: only going to go up slightly in price. And you know,
• 7:43
  Speaker 3: I think that the panels are incredibly high tech and
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  Speaker 3: last thirty years, so they're not going to get much better.
• 7:51
  Speaker 1: Yeah, hey, thanks for your time, We really appreciate it.
• 7:53
  Speaker 1: That is John Harmon. He is the owner of Lightforce Solar.