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The ITC Is Ending. Here Is How Solar Adapts #334 · Clean Power Hour

• 0:50
  Costa Nicolau: Resist the urge for the race to the bottom.
• 0:53
  Costa Nicolau: Cheap does not end up being cheap at the end. There was this famous joke of a barber that had been in a barber shop for four decades, and a new barber shop opens across the street and says, $5 haircuts. And all of his business start going, starts going to the other barber shop with the $5 haircuts. So this, this smart guy who has had his business for generations puts up a new sign in front of his store saying, We fixed $5 haircuts.
• 1:17
  Costa Nicolau: Okay, cheap ends up being expensive in the end. So the first piece of advice for installers is your business is under threat. You resist the urge to go cheap, because it's gonna cost you money and it could take you down. Look for quality, look for partnership.
• 1:29
  Costa Nicolau: Okay, a little more upfront might mean a lot less on the back end, but it's a really hard decision as a business owner to make, resist the urge to go cheap. That's the first piece of advice. Are you
• 1:41
  intro: 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.
• 1:51
  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.
• 2:07
  Tim Montague: The Clean Power Hour is brought to you by CPS America, maker of North America's number one three phase string inverter with over 10 gigawatts shipped in the US. The CPS product lineup includes string inverters ranging from 25 kW to 350 kW, their flagship inverter, the CPS 350 KW is designed to work with solar plants ranging from two megawatts to two gigawatts. CPS is the world's most bankable inverter brand, and is America's number one choice for solar plants now offering solutions for commercial utility ESS and balance of system requirements go to Chintpowersystems.com or call 855-584-7168, to find out more. Hey guys, are you a residential solar installer doing light commercial but wanting to scale into large C&I solar? I'm Tim Montague. I've developed over 150 megawatts of commercial solar, and I've solved the problem that you're having you don't know what tools and technologies you need in order to successfully close 100 KW to megawatt scale projects.
• 3:20
  Tim Montague: I've developed a commercial solar accelerator to help installers exactly like you just go to cleanpowerhour.com click on strategy and book a call today. It's totally free with no obligation. Thanks for being a listener. I really appreciate you listening to the pod, and I'm Tim Montague, let's grow solar and storage. Go to clean power hour and click strategy today. Thanks so much. All right, we're here at re plus day two, re plus northeast in Boston, one of my favorite trade shows. I'm with one of the OGS of the OGS of the industry, Costa nicholau With panel claw.
• 4:02
  Tim Montague: Welcome back to the show. It's great to be here. Thank you, Tim. I love talking to you. I mean that with all my heart. I love talking to you because you are one of these guys who is really deep and really committed to this industry, not only DG, right, but you support Sei, a you've been a board member for many years, and you have a wonderful product, claw. FR, if you don't know about claw? Fr, my clients are resi and light commercial installers breaking into large C&I, and they don't know about claw fr, but it is the number one rooftop racking in flat roof solar. So you need to check it out. They're based here in Boston, but we were talking Costa about what's going on in our industry, and it's a no, it's a little gnarly. The storm is coming, and it's not that the industry is going to go away. It's the solar coaster, right? We're having a mini boom here in 2026 because of the phase out of the ITC. Is there life after the ITC goes away for rooftop solar?
• 5:03
  Costa Nicolau: Well, categorically and unequivocally, yes. But before I go there, thank you too. By the way, you talk about OGS, you've been in this sector for a long time, and what you do is critically important, getting the word out, telling the stories that matters, that matters a lot. So thank you very much. We really, really appreciate it. So now let me answer your question, is there a storm? You know, it's kind of hard to sit here and say that there isn't one. But if you look at industries, if you look at segments, automotive, pharmaceuticals, financial services. This is the kind of storm that leads to the real growth. So I look at this as a tremendous opportunity, right?
• 5:38
  Costa Nicolau: If a market is truly going to mature, if a segment is truly going to mature, you have to have a couple of very large players that can actually drive out cost in. Get to scale, dominate the market and create value for end users. Right in solar we've had hundreds, 1000s of companies in the segment making incremental progress year over year. And while that's very nice and that's very good and we can all make a living at it, that's not the sign of a mature company. Way too many players not doing enough, or not getting far enough, fast enough. What's happening today is the ITC is going away. Now we have certainty that it's going away.
• 6:21
  Costa Nicolau: You're going to Safe Harbor. And once the safe harbor stuff is done, it's gone, right? And if you think it's going to come back, well, that's a that's a bet you have to make yourself.
• 6:29
  Costa Nicolau: I'm not going to make it right.
• 6:29
  Costa Nicolau: So what happens after that?
• 6:33
  Costa Nicolau: Well, you lost your 30% but you don't have to pay the lawyers and tax advisors anymore, the prevailing wage thing, the DOM con thing, the fioch thing, all that goes away. Okay, prevailing wage might not go away, but in some states, it will, right, state dependent. And so when you really look at it, are we really losing 30% or are we losing maybe 15% 10% 20% okay, we've got four years to make that up, right? What else are we seeing electricity prices going up?
• 7:01
  Costa Nicolau: That's likely to continue. And we haven't seen them go up at this pace ever. So you say storm, I say opportunity. You say hard times? Yes, for the companies that aren't ready and aren't prepared, you bet they're not going to be around for long enough, but the ones that are, the ones that understand and get it, I think they're actually going to thrive, and that's exactly what panel claw is doing.
• 7:23
  Tim Montague: Yeah, there are two mega forces, and to your point, crisis is opportunity. I love that Chinese proverb.
• 7:32
  Tim Montague: Crisis is opportunity. There's a lot of opportunity. We are going to get leaner and we are going to get meaner, and we will, we will be better emerging from this. There is a fair amount of fat still in the solar industry.
• 7:45
  Tim Montague: There is opportunity to bring down the cost, the soft costs, especially, but both soft and hard, we are the major industry in energy now, right? Wind and solar and batteries account for 90 plus percent of new energy on the grid in America. And you can talk all you want about nuclear, fine, right? But it takes 10 or 15 years to prop up a nuke. And I live in a state where we have 40% grid power from nuclear. I know that industry quite well. I grew up fighting a nuclear waste dump in New Mexico at my kitchen table. You bet it got built, and it's had a lot of problems. It's a military waste site called called whip. But anyway, the forces at work are beautiful, okay, the cost of solar is coming down and the cost of energy is going up, and together, that is like a that is like anti gravity, in a way, right? It is lifting us up. And so what I need to know is, what is your advice for owners of solar companies? These are EPCs, these are service providers.
• 9:00
  Tim Montague: These are asset owners and developers like those are my people. You bet. What is your advice to prepare for the post?
• 9:10
  Tim Montague: For the post ITC world today, because I think there is a lot of wishful thinking that it's going to come back. We could get, we could get some good, better policies on, say, community solar, National Community Solar legislation, or something like that. But in the meanwhile, here we are in the trenches of rooftop solar, which is a niche, it is a growing niche. Okay, commercial industrial solar is growing.
• 9:38
  Tim Montague: Yes, it is, and I think it will continue to grow because of key places like New York and Massachusetts and Illinois and California.
• 9:51
  Costa Nicolau: So you want advice for your customers? Yes, and your customers are installers, developers, APCs, and sometimes companies in the residential sector that are looking to transition. I Well, there are a couple of pieces of advice. The first one is, build a good business and run a good business. That's not rocket science, right? Surround yourself with good partners. And what I mean by that is identify what you need to do to replace that 30% and then get after it.
• 10:14
  Costa Nicolau: You don't have to do it all yourself. I will tell you how panel clause handling it and install this. Hand handling it.
• 10:20
  Costa Nicolau: We're innovating our way out of this. And the beauty of it is it's been in our DNA for 18 years. The install member member companies are known for innovation. We're not just doing innovation because the ITC is gone and it's going away, or 20 5d disappeared. We've been doing this since we were founded.
• 10:34
  Costa Nicolau: Innovation is foundational to driving out cost. You launch a product that's better than the last you do that long enough you get to meaningful cost reduction, and we've seen that so panel claw, business model innovation, product innovation, services innovation, software innovation. Check, check, check, check, check, yeah, okay, and that will help
• 10:54
  Tim Montague: give it put some flesh on those bones for your own company. What have you done?
• 10:57
  Tim Montague: Because you truly have walked that talk, and most people have no clue, honestly, Costa, what we're talking about. But tell that story.
• 11:08
  Costa Nicolau: All right, I will tell you something very simple.
• 11:09
  Costa Nicolau: I can tell you the 18 year story, but I don't think we have enough time, so let's do the short version. Okay, we had a piece of policy that created a 30% ITC, with potential for 4050, 60% that was there for 10 years, and it was an awesome runway, okay? And it was going to build manufacturing in the United States and deal with supply side and demand side incentives. It was wonderful and beautiful, okay, and that did spurn a lot of manufacturing in the United States. What did panel claw do? We jumped all over that, and for us, it was really easy to do it, because our manufacturing was already here. So one thing that panel claw did right out of the gate in 2022 was we doubled our domestic manufacturing capacity.
• 11:50
  Costa Nicolau: And then after that, we increased it again. So right now, today, and it's been true for the next for the past five years, panel claw has enough manufacturing capacity in the United States of America to support the entire flat roof market by ourselves without inventory just in time. So that's really meaningful and important. Why is that meaningful and important?
• 12:12
  Costa Nicolau: Because past legislation and current legislation, the safe harboring customers want to take advantage of domestic content, the 10% domestic manufacturing bonus credit. Well, our stuff has always been domestic, and we qualify for full stack the rail, the structural fastener and production on the racking side of the elective Safe Harbor table for domestic content, right? So that's a check, check, check. Now we're also in the January 1, 2026 to July 3. 2026 if you're looking to build today from scratch, without Safe Harbor, past Safe Harbor, or if you're looking to Safe Harbor today through the end, we have Fiat compliance, and we're the only racking company and flat roof. There isn't another one that has 100% full field compliance, which I will sign on a self attestation that we have under penalty of perjury. Nobody else has it. So how do you help your partners? Well, you you solve their problems. What problems do they have? They need the 10% domestic manufacturing bonus credit without massive price increases while supply chain has already been here, and I can give it to them, proven at scale, reliable at good cost.
• 13:17
  Costa Nicolau: And then the second, which is brand new for January, 1 through July, 3, Fiat compliance. I can tell you today, it's all over my booth. 100% Fiat compliance.
• 13:23
  Costa Nicolau: We're your easy button. We give you 19 points towards the 40% you need for Fiat on the racking side, yep, so I hope that helps.
• 13:34
  Tim Montague: That was bold of you to double down on American manufacturing. It. You know, in a lot of people I talked to will say America forgot how to be a manufacturer. But I disagree, and you're proving it. And there are many, many other companies that are proving it. But back to innovation, because you have also you sell hardware, okay, this stuff, yeah, the stuff that holds solar panels,
• 14:04
  Unknown: pretty awesome stuff. I love it. It is awesome. It's a wonderful, simple thing.
• 14:08
  Tim Montague: I am a geek for rooftop racking. I don't know why there's something wrong with me, but I love rooftop racking.
• 14:13
  Unknown: I love you, Tim, that's awesome. That is fantastic.
• 14:18
  Tim Montague: But you're also a software company. You're a logistics. Logistics are a big deal because when stuff shows up in the wrong order on the wrong day, in the wrong package, whatever, or missing parts and pieces, it's a nightmare for the installer. Yeah, and listen up, manufacturers. If you don't have your ducks in a row on logistics, you've got to sharpen your game. Because my son is a commercial solar project manager, and he brings these horror stories to me every day.
• 14:47
  Tim Montague: The logistics are not smooth.
• 14:47
  Tim Montague: They need to be and you are solving for that. What are you doing?
• 14:53
  Costa Nicolau: Oh, my man, we did not plan for this interview, and I did not know what questions were coming, but you're hitting on it. Thank you.
• 14:57
  Costa Nicolau: All right, so let me answer that very good question that points right to our strength. Okay, so you know, one of the things that Amazon did when they came to the market that Jeff Bezos really nailed, was making it really easy for their customer. I can go on my phone today, I can look for socks for my nine for my 11 year old son. I can find a pair of socks, click on a button, buy them, and then once I buy them, I can see the little truck coming towards My House to deliver the socks for my son. I know exactly when they're going to show up, right? Very cool.
• 15:28
  Costa Nicolau: Makes it really easy to do business logistics, right?
• 15:32
  Unknown: All right. It keeps coming back, you bet.
• 15:35
  Costa Nicolau: And everybody copied them now, right?
• 15:37
  Costa Nicolau: Everybody does that. You can see your shipment arriving on consumer goods to your house, everything from a pair of socks to big buys a couch for your house, right? Okay, well, penne claw looked at him like, we're not rocket scientists. We're not. Brilliant. We're good at many things, but that's a pretty smart thing to do. Why has no one done that in solar Well, I don't know. We did it. So we have this thing called claw logic. When you place an order with us, you can see your order in the system within minutes, and you can see all the line items. You can see the pallet sizes. You can see the pallet weights. You can see the palette counts. You can see when the order is going to ship. You can see when it ships, and you can follow the truck moving across the string the screen, delivering to your site.
• 16:19
  Costa Nicolau: Nobody's done any flat roof yet, but you know what, if you're an EPC and you have 30 guys up on a roof waiting to build a system, waiting for the racking to show up, and you're making phone calls or sending emails to a company, saying, is the truck coming? Oh, hold on, let me transfer it to somebody else, or let me ask somebody, and it takes 2345, hours or worse, 1234, days. Well, that crew's sitting up there, twiddling their thumbs, costing you money.
• 16:45
  Costa Nicolau: That's real money. That's profit, right? You talk about making up that 30% and all these soft costs that people talk about, no, they're not soft, they're very real, and they're solvable. You can solve for them. Well, panel cloud is solved for that with claw logic.
• 16:55
  Costa Nicolau: We've had it for three years.
• 16:58
  Costa Nicolau: Nobody's copied us yet, which is astounding to me. I wish all my competitors were doing this. We launched it in Europe. Panel cloud Europe is launching a claw logic equivalent in Europe now.
• 17:10
  Costa Nicolau: So we're doing it across continents, and it's solving a problem for customers. It's very real. We're Amazon claw logic.
• 17:17
  Costa Nicolau: Think of it as easy button.
• 17:17
  Costa Nicolau: Follow your project logistics.
• 17:21
  Costa Nicolau: So let's not just the bent metal, right?
• 17:23
  Tim Montague: Yeah, the Clean Power Hour is brought to you by CPS America, maker of North America's number one three phase string inverter with over 10 gigawatts shipped in the US. The CPS product lineup includes string inverters ranging from 25 kW to 350 kW. Their flagship inverter, the CPS 350 KW is designed to work with solar plants ranging from two megawatts to two gigawatts. CPS is the world's most bankable inverter brand and is America's number one choice for solar plants now offering solutions for commercial utility. ESS and balance of system requirements go to Chint Power Systems com or call 855-584-7168, to find out more. Okay, so I love that.
• 18:17
  Tim Montague: Let's talk about solar installers. Because you and I know a lot of installers and companies come in. I think three flavors to be gross, good, bad, ugly, okay, we need more good companies in the solar industry, I help companies get better. I want to work with good companies, and I help them get even better. But when you look at our industry, what are three things that solar installers, commercial solar installers, can and should do to improve their efficiency as construction companies.
• 18:53
  Costa Nicolau: It's a it's a phenomenal question. The first thing that I would advise is resist the urge for the race to the bottom. Cheap does not end up being cheap at the end. There was this famous joke of a barber that had been in a barber shop for four decades, and a new barber shop opens across the street and says, $5 haircuts.
• 19:11
  Costa Nicolau: And all of his business start going, starts going to the other barbershop with the $5 haircuts.
• 19:18
  Costa Nicolau: So this, this smart guy who has had his business for generations, puts up a new sign in front of his store saying, We fixed $5 haircuts. Okay, cheap ends up being expensive in the end. So the first piece of advice for installers is your business is under threat. You resist the urge to go cheap, because it's going to cost you money and it could take you down. Look for quality, look for partnership. Okay, a little more upfront might mean a lot less on the back end, but it's a really hard decision as a business owner to make resist the urge to go cheap. That's the first piece of advice. Second piece of advice is extreme collaboration.
• 19:49
  Costa Nicolau: We need extreme collaboration. A racking company with an engineering firm, with a developer, with an EPC, with a building department, with an insurance company. They can't operate in silos anymore. You have to have extreme cooperation to really drive out the cost. So look for that at 10 o'clock.
• 20:07
  Costa Nicolau: We've been doing it for 18 years. Come work with us, and we'll deliver exactly that extreme collaboration with you and your partners to really make sure that those inefficiencies are avoided. Those two pieces of advice, I think, are pretty good ones. If you've been busy building your business and growing and you haven't had to look at those because we've had a 3040, 50, 60% ITC, that train is coming to an end. You're going to need to go back to those business fundamentals.
• 20:34
  Costa Nicolau: Absolutely.
• 20:37
  Tim Montague: I love this. I love you. Think I totally agree that partnerships are are key, and collaboration, okay, I am all about going long on find those people and companies. That you resonate with, you share, you have a shared mission, you enjoy each other, and you want to grow together, right? And it's not easy, like things are going to come up, right? In any relationship, in any authentic relationship, there's going to be tension, work through it, be patient, be committed, right?
• 21:11
  Tim Montague: That is the key to long term partnerships. Work through the pain and the friction. If there is, there will be eventually, somehow. And I love that. Also, the race to the bottom is horrible, and price matters.
• 21:23
  Tim Montague: Okay, the race
• 21:26
  Costa Nicolau: to the bottom actually has, has you end up at the bottom sometimes, and that's not you have
• 21:31
  Tim Montague: to think about this is a long term asset we're building, right? This is part of the built environment. It's a it's a semi permanent piece of your building, and you want it to last. You don't want it to fail in any regard, right? It won't. It won't serve the asset owner. If the project fails in some way, whether that's panels flying off, or it's stopping to produce electricity or whatever, right? And so fewer points of failure. Good. I also would recommend that, if you're an installer, you really tighten up your tech stack and get very intentional. We have some wonderful standardized one absolutely have to standardize, absolutely make your tech stack less bespoke. Do not build your own technology. Please. Really, even though you there will be cycles of that. You'll see, I don't think that those will continue. Should be in the business of building technology.
• 22:22
  Tim Montague: They should be in the business of finding really good technology and deploying that and helping the technology companies make even better technology.
• 22:35
  Costa Nicolau: Well, Tim, that's a good point. There is a third piece of advice, and you, you sort of just touched on it.
• 22:39
  Costa Nicolau: Here's a third piece of advice.
• 22:39
  Costa Nicolau: When you come meet, come in to meet with a racking company or module company, or an inverter company or E boss company or a battery company, you always ask the basic stuff. Talk about your reliability, talk about your price, talk about your price, talk about your logistics. Talk about, you know, what? If you're an installer right now and you're looking for long term success, you should ask another question, which is, what is your innovation roadmap? What does that look like? And I promise you, any good company on our end should be able to answer that question, and if they can't, if they can't answer that question, you should think about whether that's the right long term partner for you, because again, I don't think we're going to cry our way out of this. Okay, I think one of the ways we get out of this is we innovate the heck out of this. So extreme partnership, extreme collaboration, do not race to the bottom. That's going to cost you in the end, and make sure that you partner with companies that truly deliberately, intentionally innovate in ways that solve problems for you in the future. Those are your right partners. And if you get enough companies doing that together, those are the winners. That's the third 1/3 of the companies in this trade show that are still going to be around in 2028 Yes, well said I intend to mean one of those. So hey, thank you so much. Really appreciate great storytelling, great interviews.
• 23:57
  Costa Nicolau: Please keep doing what you're doing. It's critically important to our sector.
• 24:00
  Tim Montague: Well, with friends like your pleasure, I can do this. So thank you. I really appreciate your support. And check out all of our content at Clean Power Hour Comm, tell a friend about the show. That's the best thing you can do to help grow and get more people aware of this content, because more people need to know about claw. FR and pan o claw. Thank you so much. COSTA Nicolaou, how can our listeners find you?
• 24:20
  Costa Nicolau: Well, on LinkedIn. Costa Nicolaou, panelclaw.com, is always a good way to reach us, and if you go to our website and reach out to sales. We'll get back to you within minutes.
• 24:35
  Unknown: Let's grow solar. Let's do it. Thank you.
• 24:38
  Tim Montague: The Clean Power Hour is brought to you by CPS America, maker of North America's number one three phase string inverter with over 10 gigawatts shipped in the US. The CPS product lineup includes string inverters ranging from 25 kW to 350 kW, their flagship inverter, the CPS. 350 KW is designed to work with solar plants ranging from two megawatts to two gigawatts. CPS is the world's most bankable inverter brand, and is America's number one choice for solar plants now offering solutions for commercial utility ESS and balance of system requirements go to Chintpowersystems.com or call 855-584-7168, to find out more.