Latest / Clean Power Hour / How Community Solar is Spreading Across the US with Aviv Shalgi, Solar Simplified | EP203

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How Community Solar is Spreading Across the US with Aviv Shalgi, Solar Simplified | EP203 · Clean Power Hour

• 0:50
  Aviv Shalgi: It sounds too good to be true. That is real. You know? You just sign up here, here and here and initials there. And you're going to save again 510 20% on your bill pack.
• 1:05
  Aviv Shalgi: You know, the majority of our customers at solar some fight in Illinois, are saving 50%
• 1:11
  intro: Are you speeding the energy transition? Here at the Clean Power Hour, our hosts, Tim Montague and John Weaver bring you the best in solar batteries and clean technologies every week want to go deeper into decarbonisation? We do too.
• 1:25
  intro: 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.
• 1:31
  intro: Together, we can speed the energy transition.
• 1:39
  Tim Montague: Today on the Clean Power, our growing community solar, I'm Tim Montague, your host check out all of our content at cleanpowerhour.com.
• 1:45
  Tim Montague: Please give us a rating and a review. And check out our YouTube channel. We have a wonderful YouTube channel, you can contact me at cleanpowerhour.com or find me on LinkedIn. You know, as you energy professionals are well aware community solar is a growing and important niche within the energy transition.
• 2:07
  Tim Montague: And today we have an expert on that topic. His name is Aviv, Shalgi, he is the CEO and co founder of solar simplified, welcome to the show.
• 2:16
  Aviv Shalgi: Thanks a lot, Tim.
• 2:16
  Aviv Shalgi: Great to be here.
• 2:18
  Tim Montague: I love that name, solar simplified. We all want the energy transition to be simpler and easier. And we truly have all the technology we need to make the clean energy transition. It's just a matter of deploying it and getting it out there into the market. But you will have a unique business because you're a b2c business to consumer. But you're also a b2b, because you get asset owners to utilize your platform, which is a subscription management platform. And we're going to hear about that. But Aviv tell our listeners a little bit about yourself. You're a serial entrepreneur, how did you become an entrepreneur? And how did you find your way into the energy transition?
• 2:59
  Aviv Shalgi: Great question. So I've actually become an entrepreneur, I changed careers five times, trying to figure out what I want to be when I grow up. And to be honest, I kind of stumbled into entrepreneurship.
• 3:13
  Aviv Shalgi: A friend of a friend of mine was starting a new company, I was looking for somebody to join him at the time. And our mutual friend was the one that made the introduction, we kind of liked each other, it's kind of like a business dating of sorts. like each other, like the ideas that both of us wanted to kind of were interested in, at the time, this is almost 15 years ago by now, and just started our first company. And since then I fell in love with the ability to help solve interesting business problems that I see in the world. And
• 3:51
  Tim Montague: what was that?
• 3:51
  Tim Montague: What was the industry you were in originally?
• 3:55
  Aviv Shalgi: So the first my first two companies were in advertising, but it was technologies for advertisers. So most of my, most of our customers were kind of the big advertisers of the world, Disney and Netflix and Spotify and Hulu, and Facebook and Twitter, etc, etc, etc. Because we're talking again, 15 years ago, there wasn't a lot of technology, but how you run advertising online. Right, you know, and so that was kind of my, my first, you know, dipping the toe into the entrepreneurial world. And, you know, I just figured that reading something from nothing is something that I'm passionate about, especially if it's a problem that I see people are struggling with. And that kind of, you know, just appealed, maybe, to my, how I was born, how I was raised by my parents, you know, it just felt like, like a challenge.
• 4:51
  Tim Montague: And what was your educational background?
• 4:55
  Aviv Shalgi: So I studied electrical engineering in the college, even though I didn't really practice that, at least not when, you know, in our industry right now, this type of electrical engineering, I was a hardware designer, I design chips for Intel, again about you know, 15 years ago or so. So never had to deal with, you know, solar and power lines and transmission and all sorts of this, you know, this type stuff.
• 5:24
  Aviv Shalgi: But I did take a few classes in college about this stuff. Kind of a good segue. Yeah, electrical
• 5:30
  Tim Montague: engineering is a great background for the solar industry. And I can see how software for advertising is applicable to subscription management. So what was the ideation though behind solar simplified? When did when did you start the company and why?
• 5:50
  Aviv Shalgi: Yeah, So we started the company in June of 2020. So we're almost almost our fourth, fourth anniversary. And the To be honest, the the original idea wasn't anything related to the solar industry, the original thinking or like the hypothesis, we were trying to figure out, if we can find something interesting was everybody around us are being furloughed, because of the lock downs of COVID?
• 6:14
  Aviv Shalgi: Everybody thinks that the world's gonna end is there a way for us to help people save money. That was like, that was the starting point. And, you know, through a lot of kind of ideas brainstorming on the wall.
• 6:32
  Aviv Shalgi: And one of the things that that we stumbled on was the idea of community solar, you know, you subscribe, virtually, to the solar power plan to solar power plants real, but you don't connect physically to it, you have to live, let's say kind of close to it, right, depending on the state that you live in, and the regulation, the specific regulation, but, you know, up to a few 100 miles, let's say, yep, but as a subscriber, you sign up, you get to save 510 20% on your monthly utility bill. And we thought, that's a great idea, you know, we're able to help people save money, all of us, you know, are, you know, obviously, for the energy transition, and cleaner energy and creating local jobs and stuff of that nature. So we're like, Okay, this is, you know, this is kind of the Holy Grail, we can get a lot of things that, you know, we aspire to do to the world, or to help the world with, you know, all at once. And so, we're like, Okay, this is like, this is an interesting industry. I think the, the actual story of how we got to start solar simplified, was, was interesting, because, you know, even when you think about ideas, in my personal entrepreneurial philosophies, you should not start companies, just because of an idea, what you should do is go talk to your customers. Well, we actually found the customers before or the customers found us before we actually started the company. So back, I live in Chicago, and Chicago was under heavy lockdowns in the beginning of 2020. And there were all of these startups that were doing professional networking, ie zoom calls with other professionals around the country, I did a few hundreds of those because I was bored. Chicago was locked down, I sold my previous company in the end of 2019. And I really didn't have a lot to do. And so I probably had four or 500 of those calls, just two or three a day, for a few months. Very fast, I got to meet a few developers, and a couple of asset owners in this industry.
• 8:52
  Aviv Shalgi: And they were all complaining about the same things. They were complaining about the fact that they have to put in a lot of money, before the acid even exists into acquiring customers.
• 9:02
  Aviv Shalgi: So they're, they're paying money to acquire customers for something that's not there yet.
• 9:04
  Aviv Shalgi: And for many developers, you know, they're kind of cash constrained, they don't have a lot of money sitting on the sidelines just waiting for things to happen. So that's meant that if they have to put in whatever anywhere from$100,000 to a million dollars per project, upfront, that's money that they can't put into a new project that they might be able to develop. You know, same goes for asset owners. You know, it means that they have to prioritize some projects over others, they can't execute and build as fast as they would like to. The second thing, they were complaining about this, even when they do pay some of my competitors and I have great competitors, I love most of them, but some of them, or at least those that existed back in 2020. You pay them the upfront fees. But there's a misalignment of incentives here because you pay them for the services they're providing, not for the results that they are providing.
• 11:01
  Aviv Shalgi: And so it's kind of like almost like an outsourcing arm of sorts, you're just hiring a bunch of people, but you're not giving them a W two, and you don't have to give them you know, donate money for their 401 K and all sorts of stuff like that. And to me, that's a little strange. Most industries in the world have figured out that you want to pay for performance. You want to pay your partner because of the results. They're getting you not just for being there.
• 11:24
  Aviv Shalgi: And so for me, that was like a little bit strange.
• 11:31
  Tim Montague: Let me make sure I understand. You're referring to the subscriber who is being offered a promise of savings but the savings are not realized until They actually get the contract rolling is that now
• 11:46
  Aviv Shalgi: referring to I'm talking about the subscriber managers that existed back at the time, okay? They were kind of like an ala carte menu at a restaurant, a developer, an asset owner, was at least back then coming to them and saying, I want ABC, I don't want XYZ.
• 12:03
  Aviv Shalgi: And for every little thing, you pay extra. You I want you guys to answer customer calls, that's gonna cost you extra, I want you to send them a bill that cost you extra, and wanted to replace people that, you know, churn people that, you know, you've acquired subscribers, some of those subscribers have left, I wanted to re acquire new customers, okay, that's gonna cost you extra. Again, everything was costing extra.
• 12:31
  Aviv Shalgi: And even when you acquire customers, let's say that's the simplest example, you acquire, the customer is the subscriber manager, and let's say 200 customers 10 of them are not paying, well, the losses of the lack of payments is on the developer, it's on the asset owner, it's not on you as a subscriber manager, at least it wasn't back then. To me, that's insane. You trust me to do a job, excuse my French, I screwed up. But you're gonna eat the losses, and I'm still gonna get paid. That's a huge misalignment of incentives here that I'm gonna pay no matter how I do my job, or how good I do my job.
• 13:15
  Aviv Shalgi: And you the person who contracted me, the developer, the asset owner, the lender, you're taking all of that risk, that I'm not going to do my job well, or maybe I'm not going to do my job. Well, you know. And so to me, these two things sounded just insane. There's an imbalance of power here. You know, developers, as owners are paying all this money, a lot of it is upfront. And there's still no guarantees of performance, and they're taking all of the risk. And so we said, well, let's let's flip this on its head. You know, we're interested in the industry because of the savings to subscribers. We're interested in this because there's an imbalance of power and misalignment of incentives.
• 14:03
  Aviv Shalgi: We think we can solve this because at the end of the day, subscriber acquisition companies, subscriber management companies, we're marketing and billing companies. No, we're not really solar companies. We're marketing and billing in the solar industry, right, we're helping the energy transition, but we're not causing, let's say, the energy transition. And marketing and billing are things I've done in previous companies as well. And so I figured, well, why don't we do the same things we've done in the past, just replicate it to a different industry?
• 14:37
  Tim Montague: So you, you realized that there was an opportunity to improve the experience for the asset owner?
• 14:45
  Tim Montague: Primarily,
• 14:47
  Aviv Shalgi: correct? Yeah. I mean, it's, I wouldn't say primarily, it's the asset owner on one side, the subscriber on the other side was simplified both of these. I mean, I'll give you I'll give you an, you know, an anecdote on the subscriber side. With most of our competitors, even today, for subscriber wants to sign up in different states are different, but I'm going to generalize a little bit, it'll take them somewhere between, let's say, 1015 minutes, at the fastest to, you know, maybe a few days, at the longest, if they want to sign up. With us, it takes anywhere between two to five minutes. So you know, just that timeframe of having to wait a few days, which happens a lot here in Illinois, we're, you know, where I live, unfortunately, with many folks, it takes days to sign up days, that's insane. In 2024, you know, when that's it takes only a few minutes. So that's a lot of the simplification. You know, on the subscriber side, on the developer acid owners side, this much of the simplification is the fact that we take our risk on ourselves, and we shield the developers, we shield asset owners from our mistakes. Now, if the sun wasn't shining, I can't tell you that. You know, it's that's beyond my control.
• 16:11
  Aviv Shalgi: But if we didn't acquire subscribers fast enough, if too many subscribers have churned, if subscribers are just not paying, heck, if the utilities are not spending and consulted and billing states, we're still going to make the asset owner hold the developer hold the lender hold whoever contracted us. They're going to be made whole. And we're going to be, let's call it losing money unless we do our job. And we fix things. And so It
• 16:43
  Tim Montague: does sound too good to be true in the pre show we were talking about. Your Customers often think it sounds too good to be true.
• 16:54
  Aviv Shalgi: So it does, but it's only because they got used to, you know, and I'm not disrespecting anybody. Listen, I'm very good friends with folks at Arcadia at power mark and vampy on, et cetera, et cetera.
• 17:02
  Aviv Shalgi: We have a lot of great companies, a lot of great people in this industry, which I really love, you know, I want to wake up and like talking to people, you know, not just my customers, but also my competitors. And we all work together a lot on policy, and driving the industry forward and stuff of that nature. But it's just a different concept. I mean, paying for services is something that usually happens at the very infant industries. Because nobody's willing to risk anything, nobody knows what's gonna happen. That's what happens with every new industry that comes up. But I mean, Community Solar has been around for what, 710 12 years at some states even, you know, it's not that new anymore, but kind of figured out some statistics, you know, we know what the average churn in the industry is, for, you know, for mass market customers, we also kind of figured out what the churn for low income customers is what it is for commercial customers, what's their statistics and people paying and people not paying. And I'm I didn't mention this before, but all of my businesses, even though they're in different industries, the theme, the underlying theme, between all of them is data analytics, and machine learning.
• 18:18
  Aviv Shalgi: That's kind of my background, what I bring to the table. And, you know, 2020, for the last 12 months have all been about AI.
• 18:29
  Aviv Shalgi: You know, most of AI is not really AI, but it's a really nice buzzword. But there's a lot of data out there, that, you know, for example, solar simplifies using in order to improve these statistics. So we'll be in the clear, we won't be at risk by taking these, you know, but but by taking these commitments are these guarantees to our developer partners, asset owner partners, and saying, we're going to shield you from these losses? Because we don't have these losses? Because we're using data a lot smarter from the get go, who we target, what's the targeting, what's the messaging? What do we tell them?
• 19:10
  Aviv Shalgi: How we onboard subscribers, etc, etc. And so we're happy to take those risks. But to your point, it sounds too good to be true, simply because the rest of the industry hasn't offered these things yet. Okay. But they will.
• 19:21
  Aviv Shalgi: It'll take another two years, five years, 10 years, but every industry that gets to maturity gets to these balances of power, the imbalance of power right now, yeah, it's just an anomaly.
• 19:34
  Aviv Shalgi: Yeah,
• 19:37
  Tim Montague: let's work our way through the stack. Here. You have consumers, you have utilities, and then you have asset owners. And it all has to work together. The money has to flow seamlessly, ultimately, for us to have a good community solar industry. And not all states have good community solar, it is very regional. We happen you and I happen to live in Illinois, which has a quite a robust community solar program.
• 20:05
  Tim Montague: But if you if you just Google that problem, show me a map of the good community solar states, you'll see that there's about 10, places where there's robust community solar, and then there's a bunch of other states where there's kind of one off, and nascent markets, markets, like New Mexico, which has a pilot program and, you know, eventually, that'll go bigger.
• 20:30
  Tim Montague: But New Mexico is also quite a small state a million, maybe a million and a half people. So there's not a lot of runway there necessarily. There's more runway, probably in utility solar in a place like New Mexico. But consumers, your your, you have to solve a problem here, which is churn, finding those consumers that are going to pay their bill consistently, and not create a lot of headaches for you, right?
• 20:58
  Tim Montague: Because chasing chasing payments is going to be friction and expensive. And since you're offering a guarantee, it could also be costly. But let's talk a little bit about when you're approaching consumers. How do you how do you select what consumers to approach? And then what is their experience? I'm very curious. I mean, I have my own experience as a consumer. I occasionally get inserts in my Amerind bill from you know, from companies like next amp. And then and then and then I get I get text messages from friends and colleagues. Hey, Tim, I got this notice about community solar. Is this real? So good.
• 21:42
  Tim Montague: sewers are are skeptical. If they should be it sounds, it sounds funky, right. Like and And on some level, I could see how people are a little reticent to have to power bills most states don't have on bill yet.
• 21:56
  Tim Montague: So you are taking on a an additional bill that you have to deal with, so to speak. But tell us a little bit about your perspective.
• 22:10
  Aviv Shalgi: Yeah, I mean, those are, those are definitely great points. Tim. It sounds too good to be true. That is real. You know, you just sign up here, here and here and initials there. And you're going to save again, 510 20% on your bill.
• 22:27
  Aviv Shalgi: Heck, you know, the majority of our customers at solar, some fight in Illinois, are saving 50%. Really, you know, from the Illinois solar for all program.
• 22:36
  Aviv Shalgi: Over there, the minimum discount is 50%. Right? Because that's how the state designed that program. So
• 22:47
  Tim Montague: real quick, your you you mentioned solar for all that is a low income, low and middle income program. So it's a carve out. It's it's it's a it's a sizable program. But it is a very niche market, correct, continue? Correct.
• 23:01
  Aviv Shalgi: It's also a more risky market to your point, it's harder to acquire those customers hard to retain them.
• 23:07
  Aviv Shalgi: Because they move more often they change their phone number more often. And it's obviously harder to collect payments from people who don't just don't have a lot of money. But to go back to your earlier point, you're definitely right that there's a bunch of markets, probably a handful, you know, you're generous by saying 10, you know, from the 10. Some of them are very small markets to your earlier point. You know, so So and many of these markets unfortunately fluctuate, you know, some years are awesome years, the other years are not as great because the incentives ran out or be thinking, the policy or the regulation, or stuff of that nature. But but on the subscriber side, it's definitely confusing. You just sign here, here, here, and you can save some money on your bill, especially in deregulated markets. Now, I'm not an expert on deregulated markets on, you know, read what we call here in Illinois Aires, but I know in some states called ESCOs, or reps. I know the retail energy providers who, you know, just sell you a different supply portion on your bill. And unfortunately, a lot of people have gotten scammed by by some of these companies. Now, that's an industry that's been around for decades. So people had gotten a bad taste, I think, from some of these folks. And now here we are this new industry community solar comm again, basically saying the same stuff just fine. Hear him here, we can help you save some money.
• 24:38
  Aviv Shalgi: Yes, the technology in the background is different than this thing. And that thing is different. But the pitch sounds almost the same. So it's definitely tricky. Again, we can't give out the entire secret sauce. But we run a lot of data analytics on what's called people's behavior online, and trying to figure out what they're interested in, when are they interested in it? You know, kind of almost like, I like to say that my two advertising companies were basically profiling companies, kind of like if you watch CSI or profiler back in the day, trying to figure out people's behavior.
• 25:16
  Aviv Shalgi: I don't care about people's demographics, to be honest. You know, unless we're targeting something specifically socio economic, like LMIA dedicated programs and stuff of that nature. If it's a mass market program, in my opinion, everybody can and should sign up. So I don't care about that I care more about who's going to be interested in this, who should I show my ads to online, we, by the way, don't do door to door sales. And I joke about this a lot with folks that we work with, I don't want anybody knocking on my door. So we're not knocking on anybody else's door. By the way, I don't want anybody cold calling me. So we don't cold call anybody. You know. And those are kind of the two main methods of acquiring customers in this industry. I just don't like them. I don't want them to happen to me. So I'm not going to do them to anybody else.
• 26:04
  Tim Montague: So how do you acquire new customers?
• 26:07
  Aviv Shalgi: So a lot of online marketing. We do do retargeting through direct mail. So some people need to hold a piece of paper, sometimes. But most of what we do is online.
• 26:18
  Tim Montague: Where would I see your advertisements?
• 26:21
  Aviv Shalgi: You wouldn't see it on Facebook and Instagram, I can tell you that. It'll be in places where your mindset is more of a money mindset. You're thinking of your finances. It wouldn't be on Tiktok or Instagram or Facebook or stuff like that places where you clean your head. You know you don't you don't you most of the time, at least you are not super serious. And so we're trying to find those places where people have a mindset of energy of savings of, you know, where is that? Where
• 26:56
  Tim Montague: is that? I'm just curious. That
• 26:58
  Aviv Shalgi: that's, that's some of the secret sauce. There are websites, you know, I'll give you some some examples of websites, or apps, we're not advertising and but that would kind of be in this, you know, in this room, okay, I can put stuff in Wall Street Journal, for example, you know, there are ads on the wallstreetjournal.com, or, you know, whatever, Forbes or stuff of that nature. Do you see ads on the side at the bottom between screens and all sorts of stuff like that, I could put ads there, I'm not, but I could put ads there. You know, next, let's call it two articles that talk about saving money, you know, or that talk about reducing your costs or how tough it is to live in, in today's world. Because, you know, inflation and everything.
• 27:41
  Aviv Shalgi: And when you're reading those articles, you wouldn't be in a mindset, that if I showed you something related to savings, you might be a little bit more inclined to click it or to read about it. versus, you know, you're watching cat videos on YouTube, your mindset, even though you're the same person, just your mindset is different.
• 28:02
  Aviv Shalgi: Sure, at that point, and so we're trying to figure out and it changes all the time. It's not like we have one website that we're always using. But, you know, that's kind of one approach, we're taking the other approach that we've been taking.
• 28:17
  Aviv Shalgi: And it's, that's one other thing that I've been, you know, doing back in my, in my advertising days, is influencer marketing.
• 28:24
  Aviv Shalgi: But don't think of your Kim Kardashian of the world. Think of your local loud neighbor.
• 28:27
  Aviv Shalgi: Some places have neighborhood HR ways or neighborhood boards, you know, where there's a loud person that you trust, could be a pastor Could your rabbi could be, maybe a local politician, could be a business owner, just everybody, you know, some, some places have those. We have it here in the neighborhood, I live in Chicago. You know, just like the gathering coffee shop, everybody goes to off the weekend, you know, and they go and chit chat and schmooze and network, you know, when, when the small, you know, small community we have here in my setup neighborhood. So, it's gonna be a lot of different people. Every community has what's called, like, the local leaders, the people that, you know, people listen to people talk, sure, hear advice from. In many places, we partner with those people, it's hard to figure out who those people are.
• 29:17
  Aviv Shalgi: But again, that's kind of where data analytics comes from.
• 29:23
  Tim Montague: So then you're getting, you're getting word of mouth.
• 29:28
  Aviv Shalgi: It's what it's local word of mouth, from somebody you trust, well, suddenly that too good to be true paradigm goes away. Because it sounds too good to be true.
• 29:37
  Aviv Shalgi: But a person you trust who lives right next door, told you that they've looked into it. And it seems real, like they're not going to vouch for it in anything. And we don't pay people to do this, by the way.
• 29:47
  Aviv Shalgi: So it's like, I'm not bribing anybody local, to say, Go say something, you know, but we approach these people, sometimes we donate money on their behalf to a charity they want, but they don't get paid by us. I don't have to say it. But you know, I'm happy to put in the time to explain to a local person who's a trustworthy leader in their community, happy to spend an hour or two or three explaining to them what community solar is in their state, maybe connecting them toward the regulator to vouch that this is a real program. And this is a real thing where they live. And suddenly they're like, Okay, I'll sign up, I'll check it out.
• 30:31
  Aviv Shalgi: And because they are leaders in their community, they're very, their word of mouth is much stronger than, say, the average Joe. And so that's kind of another way that we're able to build that trust. And when people see community solar, when they've actually experienced it, and they've seen the savings, sure is very, very low. Because once you see the savings, whether it's dual billing or consolidated billing, assuming it's not $1 a month, like something that is substantial, you know, $8 a month, $10 a month, $20 a month, etc, something that adds to, let's say, $100 and above a year well, that's substantial to many people, you know, saving 100 bucks a year, or 200 bucks a year. Well, that's another you know, another movie or two you can take your kids to with popcorn and drinks and everything, right? It's not too bad. Now nobody's gonna get rich from saving a little bit of money and community solar. So
• 31:35
  Tim Montague: we have some ground to cover here but but other other aspects of working with consumers that you want to To speak to and then let's talk about the utilities and how well they're playing ball or not.
• 31:48
  Aviv Shalgi: I think the most important thing that leads to to work putting emphasis on internally at solar simplified is, what do we say to acquire the customers? So what's the messaging on these ads, the landing pages, they get to what are they seeing? What are they reading, in order to build that trust. Because if we're not building the trust that too good to be true, is going to be the best excuse, why not to sign up.
• 32:15
  Aviv Shalgi: But more importantly, it's the onboarding experience. So once they've signed up, what happens?
• 32:19
  Aviv Shalgi: Who talks to them? What emails?
• 32:23
  Aviv Shalgi: Are they getting? or text messages or anything of that nature? Can they talk to a real person? You know, everybody at solar simplified works for me, everybody's a W two, we don't have call centers or 1099, or anything of that nature. Why?
• 32:40
  Aviv Shalgi: Because I really care about the experience the subscribers going through. And we all pick up the phones. You know, I pick up the phone a couple times a day, if people are calling and you know, my team is busy, I'll answer customer calls. You know, I'll answer customer emails, because, you know, that's a part of the job.
• 33:00
  Tim Montague: Well, it keeps you in touch with the experience, too.
• 33:03
  Aviv Shalgi: Of course, I think the onboarding experience is something that many in this industry are still struggling with are still trying to figure it out. Not to say that I think we've figured it out yet. But I think many, many folks unfortunately, I'm saying this, by the way, as a subscriber not of my own company, because we're right now not not serving any active projects in comed. In Chicago, most of our core products are still getting estimate under construction. So I've signed up with some of my competitors. And I'm not going to name names, obviously, but but the onboarding is tough sometimes. I'm from this industry, and it's tough for me.
• 33:46
  Aviv Shalgi: So it's an average Joe, what would they think about our industry? If you know everything is tough. I'll stop there, probably and the subscriber gets switched to talk about as developers and anything else you want to talk.
• 34:00
  Tim Montague: Yeah, 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 gigawatts 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, 250 to 75 is designed to work with solar plants ranging from two megawatts to two gigawatts. The to 50 to 75.
• 34:31
  Tim Montague: pairs well, with CPS, America's exceptional data communication controls and energy storage solutions. Go to chintpowersystems.com. To find out more. Yeah, well, we're gonna talk about asset owners, but I also want to talk about the utilities because the utilities, you know, the fundamental here is that you as a consumer, subscribe to a program. Okay. And then you're you're paying the bulk of your energy bill to the community solar provider, right. And then Amarin are comed here in Illinois is crediting you for that purchase that you've made with the community solar company. And how well is that working? And do consumers feel like it is an OK experience.
• 35:22
  Aviv Shalgi: So unfortunately, the variance here is very, very wide. Some utilities are amazing around the country. The credits show up, they show up correctly, they show up on time. By the way, when you think of dual billing, at least with us, I can speak to our competition, the subscriber gets the credits first, then we build them back for how much money they've received minus the discount. And so for the subscriber, at least, on our end, it's it's a very simple scenario, because the see the credits before we actually charge them money. I think with some utilities, though, it's been a struggle, you know, some utilities around the country.
• 36:09
  Aviv Shalgi: You know, a good case scenario of bad performing utilities would be just that credits show up late, you know, one month you got zero the next month, you got double. Right. You know, that would be a good case scenario.
• 36:29
  Aviv Shalgi: Worst case scenario. How happens with some utilities, you know, less than a handful of that I've seen so far but it does happen.
• 36:38
  Aviv Shalgi: It is increasing as community solar expands and there's just more projects and more stuff.
• 36:41
  Aviv Shalgi: grabbers to service, you know, where creditors go missing? And that's the worst experience.
• 36:49
  Aviv Shalgi: Because if I'm being told by the utility, yeah, that Tim received$100 in his bill. But Tim hasn't received $100. And it's failed.
• 36:59
  Aviv Shalgi: Yeah. Well, that now was an issue. And luckily, you know, I can say, for us, and there's a few other competitors out there, that kind of come from the tech side. And not necessarily from the, from the marketing side, we're connected, you know, in various different ways to the utilities that were able to see the bill, kind of confirm that it's there. But I can't say that it's 100%. Bulletproof, we don't have all of the utilities, and it's not, you know, it's not nothing is perfect. And so, there have been times, luckily, very few, there have been times where, you know, we thought a subscriber received credits, and they didn't, I think, you know, luckily, we've fixed those issues. And they've not happened probably in the last two or three years by now, that happened kind of 2020 2021. But I've had, I've been on a lot of policy calls, with regulators with other industry leaders that are trying to drive policy forward, where I'm still hearing about some utilities that are struggling or credits go missing, and you got a credit and credit got pulled from you from the subscriber. And, you know, nobody knew about it. So you got the credit, then they canceled your bill, they rebuild you or something had happened, they charged you back. And you know, we have to get either the utilities to play ball. And for the utilities to like us as an industry. Or we have to get the regulator's which is the fourth entity you haven't mentioned previously, the regulators to force the utilities to work together with us. Now, I prefer the first approach. So some utilities are awesome. They understand why community solar is important. You know, just generally speaking, you know, also for them, you know, if they give out a good experience for communities or to their, to the people in their utility territory, you know, it puts out a good name for them, too. And if they're going to struggle, that puts up a bad name for them. And so I prefer the, you know, the carrot, not the stick.
• 39:05
  Aviv Shalgi: Sure.
• 39:09
  Tim Montague: Okay. Yeah, we could talk for a long time about utilities, but let's move on to asset owners. What is the asset owners experience? And why are asset owners engaging with solar simplified work or transitioning to solar simplified in your experience?
• 39:33
  Aviv Shalgi: So I think it goes back to what we talked about in the beginning with the challenges of working with some of my competitors, you know, you pay a lot of money up front, you keep paying more money for the acquisition, you keep paying more money for management for churn replacement for billing services, for this and for that, and you're still carrying the entire risk. We've sold or simplified, our offering is very, very simple. There is no upfront acquisition, we pay for that in house. There's no churn replacement costs, we eat those costs ourselves, you pay a management fee. And inside that management fee, you get the acquisition, the term replacement, and a full collection guarantee. So if we had a customer, and they didn't pay their bill, we eat that loss. The asset owner, the developer, the lender, the tax equity, however, you know, all of these partner parties together, let's call it are being shielded. Because we screwed up, we acquired the wrong customer, we acquired a customer who's not paying, that's a part of our fault. It was our job to acquire customers who are staying on the project, and who are paying their bills.
• 40:45
  Aviv Shalgi: And so the offering is fairly simple. We shield them from our mess ups from our screw ups. And I've had many folks who come over to us, you know, a because they're interested, it's kind of one side for the industry. But be, we're gonna get a lot of folks to transition even existing projects over. Because their subscriber management company or the aggregator they're working with is nuts, not pulling their weight. Churn is too high, and show replacement cost a lot of money.
• 41:21
  Aviv Shalgi: Bad debt is very high. People are not paying or people are paying very late. Heck, even utilities are not paying it many times. I mean, we've seen this in New York since 2021. Where some of the utilities, it's, you know, it was the Holy Grail of utility consolidated dealing with net credit in which only New York right now offers. So big utility takes the credit risk if the subscribers not paying. And yet, the utilities were not paying developers. I mean, I know of at least three developers, developers slash small asset owners, let's call it who went under, literally declared bankruptcy in New York state. Because they did not get the money for months and bonds so much on behalf of lenders, and they have tax equity and deaf debt, and they have things that they need to pay this money to use this
• 42:15
  Tim Montague: expression yet, bill consolidation, right, which means that the consumers then just receiving their regular utility Bell, say, from Amaran, or comed, here in Illinois, and then they're paying the bill, and then, but a portion of that bill needs to go to the asset owner. Correct? Yeah. And so
• 42:38
  Aviv Shalgi: so the way that utility consolidated billing works, is that instead of you getting a credit for $100, or a negative, let's say $100, for simplicity sake, you know, maybe your bill was 200 bucks this month, and your community solar provider has given you $100 worth of credits. So what you're going to have to do is pay the utility 100 bucks, right? 200 minus 100. Well, consolidated billing, you'll see let's say it's a 10% discount project, you'll see minus 100 plus 90, and that 90 minus some small utility fee. Let's say it's $1, for example, so $89 will come to the asset owner, or to us on behalf of the asset owner. Yeah.
• 43:24
  Aviv Shalgi: You know, that's inconsolable again, non consolidated billing and dual billing, you're gonna get your $100. And I'm going to have to send you a separate bill for 90. You know, that's the difference between dual billing, consolidated billing. Now in New York, there's a third option called net crediting. Net crediting. Unlike consolidated billing, consolidated billing is just about putting the plus 90 back on your bill. It doesn't mean anything in terms of payments. Okay, let's say you haven't paid the utilities here when Amarin are in comed. You know, you live in Amman. So we'll take Amarin as an example.
• 44:03
  Aviv Shalgi: If you sign up to community solar project tomorrow morning, get enamored, and you haven't paid your utility bill. That month. The community solar asset owner is not getting paid. The utility gets paid first. So if you paid your bill, partly, you know, partially, you only paid half of it or something like that. Community Solar is the last entity that gets paid in comment in Amarillo, and call Matt and in many states, by the way, New York is the only state where you have net crediting, where the utilities take that risk of payment, and the asset owners are shielded from it. It was supposed to be the holy grail of this industry. I'll tell you what were two and a half years, almost three years into methacrylic utility console in a building in New York, that holy grail, you know what, there's still utilities that are not paying for six, nine, even 12 months of credits. So the project exists. Yeah, subscribers are waiting for their credits, the asador is waiting for their payments. Wow, everybody's waiting for the utilities. It's just insane. It doesn't happen with all of your utilities. I don't want to generalize. But that's happened with more than one. And that's just insane. So we shield our developers and our asset owners from this. We take that risk on us. And we go and fight the utilities to get paid.
• 45:33
  Tim Montague: Wow, you're a brave man. That's sounds like a nightmare. It's
• 45:41
  Aviv Shalgi: fighting with utilities is a nightmare. Yeah, that is true. But it's a it doesn't happen, you know, at least for us that we're in multiple states with multiple utilities and multiple regulators. There's a safety net in diversification. If I was only working in one utility in one state, and had a lot of projects, that would have been a huge risk for me, if that utility is not paying or something happens, they screw up the credits or just something bad happens. I would have been probably out of business. But we're in I know, a dozen utilities across multiple states. Yeah, maybe more than a dozen. It's fine. You know,
• 46:27
  Tim Montague: how many states are you working in?
• 46:31
  Aviv Shalgi: So live projects right now not talking about anything under construction, stuff like that. We're in four states were in New York and Illinois, New Jersey and Maine.
• 46:39
  Aviv Shalgi: Okay. But we have you know, late stage development from some of our partners or projects under construction that are signed with us in, you know, in California in the old program that's unfortunately getting deprecated more projects here in Illinois, Maryland and Delaware,
• 46:59
  Tim Montague: or is about to go to eighth or something like that Chusen.
• 47:02
  Aviv Shalgi: Man, Massachusetts, it's probably for operating maybe by the end of this year, early 2025 should become, you know, 10 to 10 to 12. States, something of that nature. But that kind of depends also on construction timelines, its supply chain issues, and many things that I can't control. You know, how fast people are built?
• 47:18
  Aviv Shalgi: I don't know
• 47:21
  Tim Montague: what, in our last few minutes here, we have to wrap up of you. But what do you say to companies thinking about becoming community solar developers or asset owners? What is your big picture take on the industry in the United States?
• 47:41
  Aviv Shalgi: I think it's a great industry. I think it's an industry that's going to grow.
• 47:44
  Aviv Shalgi: Gonna double, triple quadruple, you know, in a very short timeframe, I mean, I'm foreseeing let's say, in the next 10 years, you know, at least a teknicks. Nationwide, if not more, I mean, even just from the existing states. So the existing programs not talking about the pilots programs in this theater in that sense, but just the existing states are talking about double, tripling, you know, the size of community solar that's out there, right now, if we get more states coming in, which we are getting, we're probably going to see, you know, I'm assuming a five to 10x, at least in the next five to 10 years, if not more than nice thing about this industry.
• 48:32
  Aviv Shalgi: It's state regulated. One states, you know, we talked about diversification a few minutes ago, one state doesn't go the right way. Kind of like what we've seen in California just last week, that unfortunately, did not pass the community solar program that many advocates were rooting for.
• 48:48
  Aviv Shalgi: But there's a lot of other states that are talking about this. And so if one state, you know, takes a little bit longer Moeller state is going to pick up the slack. And I think it's going to be a huge industry.
• 49:07
  Aviv Shalgi: That, but you do need to have thick skin. It's a tough industry to work in. There's a lot of NIMBYs out there. If you're a developer, people who don't want this in their backyard, you know, to be built, they don't want to look at it.
• 49:22
  Aviv Shalgi: There's, you know, there's utilities, sometimes it's just don't want this in their backyard. Yep, there's different regulators you're going to have to work with. So you need to have a little bit of a thick skin, I think the other thing that people need to be at least aware of, I wouldn't say concerned about but aware of the many, many regulators are pushing more of these programs into the low and moderate income brackets. You know, Illinois, has two separate programs, there's the mass markets program called the adjustable block. And there's the low income called the solar for all. But in some of the other states, it's not that clear cut sure, you know, where exactly the winds blowing.
• 50:07
  Aviv Shalgi: And some states are even saying, well, there's not going to be a mass market anymore. Or we're going to force you to do 20% 40% 50%, low wind, the rest of it, you can do whatever you want.
• 50:22
  Tim Montague: And what prevents the utility from just becoming the solar simplified.
• 50:31
  Aviv Shalgi: First of all, in some states, they are trying New York is a state where the utilities are trying to push back against the opt in community solar program, just say, just gonna take it and spread all the credits across, you know, all of our subscribers, maybe all of our low income subscribers, for example. You know, and the question is a do they want to deal with that? Many utilities just don't want to deal with this at all. You know, they don't want to deal with the credits they deal with. They give the credits to subscribers, because they have to, because the regulators told them to, but they don't want to deal with this. They want to be in charge of the transmission lines, and the meters and stuff of that nature. They want to get paid for that. They don't want to get paid for, or at least they don't want to handle all the customer complaints and the customer questions and stuff of that nature. But yes, some utilities want to do this. I would push back as I have been very vocal in many of these policy talks, in some states that where this has come up, where it's kind of the opt in versus opt out. The the idea the premise of community solar 1015 years ago, 1012 years ago, sorry. was when we want to democratize solar, democratize renewable energy want to let people vote with their, you know, with their feet, let's call it with their wallet and the opt out that some of the utilities are offering while that is, you know, that might make things a little bit simpler. It also takes away the entire voice of the subscribers, the consumers that end up signing up for these things. And it's also going to like, nobody's going to notice this, if you're getting, you know, a two cent discount on your bill.
• 52:21
  Aviv Shalgi: It's, you know, nobody's gonna pay attention to it as a consumer, I wouldn't pay attention to it. And I get today even in comed, there's multiple line items on my bill that say, negative two cents here, negative five cents there. Okay?
• 52:35
  Aviv Shalgi: Somebody figured out something.
• 52:35
  Aviv Shalgi: All right. Well,
• 52:38
  Tim Montague: that's all we have time for I'm sorry. I really appreciate this conversation though of Eve, it adds a lot of color to what's going on with community solar. And there, it's two sides, there's challenges and opportunities. And clearly there is a big opportunity. So thank you, check out all of our content at cleanpowerhour.com.
• 52:55
  Tim Montague: Tell a friend about the show.
• 52:58
  Tim Montague: That's the best way that you can help the show grow, and reach out to me on LinkedIn. I love connecting with my listeners of Eve How can our listeners connect with you?
• 53:10
  Aviv Shalgi: So solarsimplified.com, if you want to talk to me directly Aviv@solarsimplified.com. On my LinkedIn, I'm always available to talk to anybody in the industry. I'm happy to talk policy. And you know, and how things are changing and markets and different things of that nature. And My door is always open email or website or LinkedIn are probably the best.
• 53:31
  Aviv Shalgi: Thank you for having me, Tim.
• 53:36
  Tim Montague: Thank you, Aviv Shalgi with Solar Simplified.
• 53:40
  Tim Montague: I'm Tim Montague, let's grow solar and storage. Take care.
• 53:44
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• 53:59
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