Latest / Best of Business / 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 · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk Z'B. Follow this
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• 0:17
  Speaker 2: The owner of a solar panel business is weighed in
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  Speaker 2: on why he thinks Solar zero has failed. So Solo
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  Speaker 2: zero was a solar panel subscription service that was unexpectedly
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  Speaker 2: put into liquidation by its one hundred percent yearholder, Black
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  Speaker 2: Rock last week. John Harmon is the owner of light
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  Speaker 2: Force Solar anders with us this evening.
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  Speaker 3: Hi, John, Good afternoon Jack.
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  Speaker 2: Were you surprised by the Solar zero announcement?
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  Speaker 3: I was absolutely stunned. Yes.
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  Speaker 4: Why Well, they had such a huge pool of money
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  Speaker 4: behind them, and you know, they had a pretty awesome
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  Speaker 4: proposition that you could put solar panels on your roof.
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  Speaker 3: At no charge, So it was amazing. I was astonished.
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  Speaker 2: Yeah, I mean it does from a consumer perspective, putting
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  Speaker 2: solar panels on your roof and no charge does sound
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  Speaker 2: pretty good. But I suppose from a business perspective that
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  Speaker 2: there might come with a few more fishhooks. So explain
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  Speaker 2: to us why did Solder zero close down?
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  Speaker 4: Well, I mean the thing is, we're at the end
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  Speaker 4: of the supply chain from China, A lot of the
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  Speaker 4: batteries and the technology that we installed five to ten
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  Speaker 4: years ago are our pasts. They are used by data
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  Speaker 4: need replacing. So that's the first thing. And the second
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  Speaker 4: thing is that you know the contract was for twenty
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  Speaker 4: five years and most people buy and sell their house
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  Speaker 4: within seven to ten years, and that contract had to
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  Speaker 4: be transferred to the new owner, so that that caused
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  Speaker 4: a problem. I mean, for instance, the final thing is
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  Speaker 4: that the price of panels and the qualities come down,
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  Speaker 4: so you can put twenty thousand dollars worth of panels
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  Speaker 4: on your house and that adds thirty thousand dollars worth
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  Speaker 4: of value to you when you sell it.
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  Speaker 3: So all of those.
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  Speaker 4: Factors I think played into the demise of black Rock.
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  Speaker 2: So explain that point to us. So you can put
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  Speaker 2: twenty thousand dollars worth of panels on your roof and
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  Speaker 2: that increases your house value by more. Explain that to us.
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  Speaker 3: So that's that comes from Sydney, Australia.
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  Speaker 4: The fact that you've got independent energy source and these
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  Speaker 4: panels last for thirty years increases the value of your house.
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  Speaker 3: So you increase the value of your house.
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  Speaker 4: You probably produce about twenty five to thirty percent of
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  Speaker 4: your power off the roof for the next thirty years.
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  Speaker 4: And if you move things around and sort of plug
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  Speaker 4: in your EV during the sunny day, you get free
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  Speaker 4: juice to run your car. So there's a lot of
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  Speaker 4: positives about being independent and owning your own owning your
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  Speaker 4: own sort of generation source.
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  Speaker 2: Yeah, I mean absolutely, it's the capital cost that's often
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  Speaker 2: the challenge for people, right. But I suppose if you're
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  Speaker 2: putting panels at a capital cost of twenty grand on
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  Speaker 2: your roof and you're going to be saving on power
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  Speaker 2: to the tune of ten grand in the future, more
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  Speaker 2: than it does make sense. So how's your business going, John,
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  Speaker 2: how's light fource Solo going at the moment?
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  Speaker 3: Well, we can't keep up with demand.
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  Speaker 4: I mean, the people are aware that power prices are
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  Speaker 4: going up. They're aware now that they need resilience and independence.
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  Speaker 4: So we've got a three month waiting list to do
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  Speaker 4: an installation. We're in about seven places around New Zealand,
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  Speaker 4: major centers, so we can't keep up with Demandah. Yeah,
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  Speaker 4: I mean it's really reached the tipping point where the
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  Speaker 4: price of power, the price of panels, and the feeling
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  Speaker 4: that Kevis want, which is to be independent of the
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  Speaker 4: big boys. All of that's quite a moving feast and
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  Speaker 4: it's really the tipping point for us.
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  Speaker 3: Yeah.
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  Speaker 2: So do you think that Solar Zero, because of its
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  Speaker 2: kind of unique structure, was an outlier and that other
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  Speaker 2: solar providers in New Zealand have more robust businesses even
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  Speaker 2: in these trying economic times.
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  Speaker 3: Yeah.
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  Speaker 4: Absolutely. You just have to right size your business. And
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  Speaker 4: we don't have a legacy of old customers requiring upgrades.
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  Speaker 3: And stuff like that.
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  Speaker 4: So you know, if we do any upgrades with people,
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  Speaker 4: they say I start off with ten panels, but now
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  Speaker 4: I want another ten or they say I want ten
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  Speaker 4: pounds in a battery because I trust that it really works.
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  Speaker 4: So you know, that's a different model to least to own.
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  Speaker 4: And we're quite a small population in New Zealand.
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  Speaker 1: And.
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  Speaker 4: You know people want to go with you know, they
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  Speaker 4: often buy local and they want to buy locally owned.
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  Speaker 4: We're a New Zealand owned company that they almost all
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  Speaker 4: of my installation guys have been with me ten years.
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  Speaker 4: They're real experts. And it's not one size fits all.
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  Speaker 4: You know, each roof is different, each budget is different,
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  Speaker 4: so you have to you have to you have to
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  Speaker 4: make sure that you're meeting people's expectations and meeting the budget.
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  Speaker 2: Yeah, yeah, I mean that makes total sense. You know,
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  Speaker 2: it's fascinating to look at what Australia is done on
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  Speaker 2: the solar front. And obviously there are different climatic conditions
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  Speaker 2: in Australia or though I suppose a city like Melbourne
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  Speaker 2: would be relatively comparable, relatively comparable to a city like Auckland.
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  Speaker 2: But are there things that you think the government could
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  Speaker 2: do John that would make it easier with regulation, that
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  Speaker 2: would speed up the uptake of roofshop solar.
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  Speaker 4: Absolutely, any new house should have rooftop solar mandatory, so
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  Speaker 4: that's new bills.
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  Speaker 3: We should have recognition that.
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  Speaker 4: If you put a battery on that you're creating resilience
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  Speaker 4: and you can use the battery to aid charge from
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  Speaker 4: the grid during cheap power prices and discharge to the
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  Speaker 4: grid from high power prices. So you basically become a gentile.
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  Speaker 4: You generate power and you can sell power and those
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  Speaker 4: are the things that modern technology is allowing you to do.
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  Speaker 3: And that's an ever increasing wave.
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  Speaker 4: I mean, in Australia, of the whole energy system, twenty
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  Speaker 4: two percent is rooftop solar, not solar farms, rooftop solar
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  Speaker 4: in New Zealand, it's aboutzero point one percent.
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  Speaker 3: We've got a long way to go.
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  Speaker 4: Yeah.
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  Speaker 2: Yeah, that is amazing, isn't it that. I mean, again,
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  Speaker 2: very different kind of climatic environment, but that is quite remarkable. John,
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  Speaker 2: How did you go from being a breast surgeon to
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  Speaker 2: the owner of a solar panel company.
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  Speaker 3: Well, I'm the accidental owner, Jack, So thanks for that.
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  Speaker 4: I really saw this as the future of New Zealand,
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  Speaker 4: and I'm an entrepreneur, and I invested in the company
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  Speaker 4: and then it grew so big that I had to
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  Speaker 4: buy the original founder out, as often happens, and grow
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  Speaker 4: it in the direction that was most business like.
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  Speaker 2: Right, Yeah, that's amazing. How different is your life then?
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  Speaker 2: You enjoying this?
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  Speaker 3: Yeah? I do. I mean I see.
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  Speaker 4: I asked some of our installation guys when I first
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  Speaker 4: invested in the company, I said, how's it going? And
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  Speaker 4: they said, Johnny, I have a different view from my
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  Speaker 4: office every morning, and I'm saving the planet.
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  Speaker 3: It's the best job in the world. And I have that.
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  Speaker 4: Sense within our community that we're doing right by our community,
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  Speaker 4: and we're doing right by global warming. So and it's
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  Speaker 4: really plugged into the latest technologies that are fast moving,
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  Speaker 4: so it's exciting. Yeah.
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  Speaker 2: So for people who've been considering going solar for some time,
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  Speaker 2: do you reckon there are going to be big reductions
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  Speaker 2: in the cost of solar panels in the years to come?
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  Speaker 2: I mean it keeps getting cheaper and cheaper and cheaper.
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  Speaker 2: But for how much long is that going to continue?
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  Speaker 3: Well?
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  Speaker 4: No, we're starting to see panel prices at the cheapest
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  Speaker 4: and they're putting in slight price increases, so they're at
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  Speaker 4: the highest quality and cheapest price now that they're.
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  Speaker 3: Only going to go up slightly in price.
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  Speaker 4: And you know, I think that the panels are incredibly
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  Speaker 4: high tech and last thirty years, so they're not going
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  Speaker 4: to get much better.
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  Speaker 2: Yeah, thanks for your time, We really appreciate it. That
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  Speaker 2: is John Harmon. He is the owner of Lightforce Soular.
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