The solar industry has grown by leaps and bounds over the past ten years. Here at Borrego Solar, we have nine company leaders who have been with us for at least 10 years—our Ten Year Club. They’ve built their careers around growing Borrego and the solar industry at large. Needless to say, they are a wealth of knowledge and we wanted to tap into that by asking them three questions about developments in the industry, challenges to continued growth and what improvements they’re currently focused on making.
Borrego’s Solar Veterans Club:
Aaron Hall, President, 15 years
Mike Hall, CEO, 14 years
Brendan Neagle, COO, 10 years
Chris Anderson, SVP, 14 years
Ryan Burrowbridge, VP of Engineering, 13 years
Brian Von Moos, VP of Utility Project Development, 12 years
Emily Tam, Director of IT and Infrastructure, 10 years
Bradley Hibberd, Director of Solar Technology, 13 years
Loren O’Hara, Field Operations Manager-Northern California, 13 years
Below are responses from a handful of club members. We hope you find their insight helpful and their careers inspiring. We certainly do.
What is one of the most important developments in the past 10 years that has helped to accelerate the adoption of solar?
The gist? Improving internal processes and virtual net metering.
Ryan Burrowbridge: Value Stream Mapping has been one of the most important tools for me in the past few years. Being able to view and discuss the strategic level direction of projects with the leadership and teams on the frontline has proved invaluable for us to get to the real problems we need to solve.
Aaron Hall: Virtual net metering in Massachusetts and New York has really allowed the industry to efficiently deploy solar by enabling us to optimize independently for off-takers (buyer of solar energy) and host customers (owners of land physically hosting the solar plants). Separately, the growth in financing sources, which provides customers with the ability to buy solar energy without any up-front investment, has been pivotal to opening up the addressable market and allowing more people to participate in solar.
Brendan Neagle: The real ability to increase adoption is that we’ve been able to scale. We’ve learned a lot, improved efficiency, and continued to reduce costs with each project. The amount of qualified contractors and advanced products has also contributed to being able to scale. The improvements don’t typically happen in big shifts either, they’re incremental. Bit by bit.
Chris Anderson: Design standardization. One of the most important process improvements we’ve implemented is our robust design standards to improve efficiencies and quality. By outlining Borrego Solar’s design standards, used in conjunction with our preferred design applications, our engineers can more quickly develop designs, change initial sets and review various iterations, while controlling and maintaining our high standard for quality. The two external tools that have been key in this improvement in design are HelioScope, which we use to get generic production model and design, and Helios 3D, which we use with CAD to get a prelim design set. We’ve also set up standards specifically around using these tools.
Standardizing our designs and the tools we use has also been beneficial for our outside partners. When it comes to our investment community, they know how we arrive to our modeled production and designs. The transparent and consistent process gives them confidence in their projected returns. In addition, when we need to use third party engineering partners we can control for quality in designs and ensure that there isn’t a disparity to the designs our in-house engineers produce. This allows us to scale when demand swells.
Mike Hall: The decrease in the price of solar equipment and installation has been the biggest driver by far. When I started in this industry even commercial scale solar projects sold for $8.00/Watt. The state had to provide cash subsidies of $4.50/Watt to make projects pencil. Today we can install large scale projects at close to $2.00/Watt with no state subsidies. It’s really amazing how far we’ve come.
What do you think is the biggest challenge to sustained solar growth in the near term?
The consensus? Net metering rulings and working with utilities.
Ryan: The biggest challenge I see is navigating the regulatory environment in each market separately while trying to scale the business responsibly. With so many moving parts across the country, we are constantly trying to stay ahead of the changing policy and the project level risk associated with that uncertainty.
Aaron: Net metering tariffs from the utilities. While we are hopeful that competitive sources of electricity will ultimately be responsible for their associated external costs through public policy, i.e. carbon tax, it is important that the value of solar energy isn’t also reduced through tariffs that perhaps undervalue electricity provided by solar plants. For example, a utility can attempt to make it so that all energy produced in the middle of the day generates a credit at a very low value and energy consumed at night is very expensive and not allow any exception for solar. The good news is that, ultimately, storage can allow solar producers to control for when they are exporting power and the worse a utility tariff gets in this respect, the more people will move to solutions like storage.
Chris: Utility’s approach to net metering. Utilities are struggling with how to value solar energy and view net metering as a subsidy that causes cost shifting. There are many conversations happening across the country, but most utilities are working to determine a rate they believe accurately values solar, with the belief that the DER rate is too high and there is unreasonable cost shifting with the popular net metering model. Since each state’s Public Utility Commission determines the different rate and model (various terms, cap, grandfathering, etc.), we have differing state programs, further complicating market adoption and maturation.
In general solar doesn’t rely on the transmission grid – it relies on the distribution function of the grid. Therefore, the price of solar should factor in that distribution costs, but also the value we are creating to the grid and society. When the cost of power is highest (hot sunny day) we are supplying power at the highest rate to the grid.
Mike: The biggest challenge is finding ways to work with the utilities. Recently the relationship between the utilities and the solar industry has been largely adversarial, manifesting itself in time consuming unproductive battles at the public utility commissions. We actually have a lot of common ground with the utilities, and if the two can find ways to work on those issues we both thrive. For example converting traditionally fossil fuel powered applications to electricity is likely good for the utilities, the solar industry and the environment. It’s potently more impactful to both sides than what happens with net metering. If we could work together on issues like that I think we’d find that we are actually aligned on most issues.
What types of improvements are you currently making in your role at Borrego that you believe will increase efficiency and/or adoption of solar?
The common theme? Empower others in the company to lead and reduce costs.
Ryan: In my role I’m working to develop managers so that they can have the most effective impact on work within their departments. In such a young and dynamic industry, it’s critical that the leadership team has a clear understanding of how to help their teams navigate the ever changing project landscape.
Aaron: We are working to better understand performance of our systems by automating and improving the process by which we monitor and analyze them and compare actual production to weather adjusted modeled production. In particular, in the commercial and industrial space (vs. utility) there is still not a consensus and full understanding of how some of the variables impact production of certain projects. Generally, we are accurate but one or two percentage points of discrepancy in production can be important—understanding how variables like soiling may impact production differently based upon a myriad of factors is our goal.
Brendan: One of the big improvements that I’m focused on is empowering other employees to take initiative to lead and implement their own improvements. That’s part of scale, employees have the experience now to really make solid improvements. In addition, I have been focused on reducing cost, so we can provide customers with a lower cost product that delivers better production and returns.
Chris: One of the big slices of Borrego Solar’s business that I’m focused on is reducing our labor costs, specifically the labor associated with the electrical scope of the project. Electrical labor is the second highest cost we face, behind modules, although sometimes they flip depending on the complexity of the scope and project. This doesn’t mean squeezing our subcontractors or simply demanding lower pricing. Rather I’m working with them to better understand where the hours are in the construction and in adopting new design standards, means and methods and products that will result in more cost efficient designs. The work here starts with defining a common cost code structure under which portions of the scope of tracked and with moving from a $/watt metric to both $/module and hours/module. Working with the subcontractors to help them understand their historical performance through the lens of these two metrics will allow us to more accurately test new ideas and pin point how to value engineer and remove hours out of the jobs from the onset. Said differently, we are working to get tomorrow’s price for tomorrow’s design, not yesterday’s price. Bringing down costs ensures we’re able to compete with conventional power.
Mike: I’m very focused on continuing to reduce the cost of solar energy for our customers. As a developer and EPC that primarily comes through reductions in installation costs. We’ve come a long way, but we can still go so much further. I’m also excited about adding additional energy services to our offering over time. In particular offerings like energy storage that can help make renewables better match the load profile of the grid.
It’s clear from the last question we asked our solar veterans that there is still a lot of work to be done to ensure solar is competitive with conventional energy choices and that everyone has access to it. Just as we need those that have brought solar to where it is today, we need fresh ideas, energy and more diverse voices. With that, as Brendan, signs off every email with: Go solar!