New York Launches Renewable Energy Assessment program
Similar to California’s AB 811 program, New York has just launched it’s own version:
“The legislation will empower communities to launch Property Assessed Clean Energy (PACE) loan programs, allowing them to leverage federal funds and provide loans to commercial and residential property owners. Property owners could then opt into these programs, finance energy efficiency retrofits and renewable energy systems and reap an immediate savings on their energy costs. They will be able to repay their loans via an annual charge on their property tax bill.”
Steve Blank is the founder of e.Piphany - a 1999 IPO deal that allowed him to retire. His methodology is called “Customer Development” and involves iterating quickly based on customer feedback. The earlier variants of this method (or similar anyway) include Guy Kawasaki’s iterative development model and “fail fast, fail quickly” models.
I think what’s changed now (vs 1999, when we were doing NetFreight.com) is that the COST of failing is so much less. Back then, I think we were afraid to admit to our VC and other investors that we were wrong and needed to pivot and so we were actually afraid of customer feedback if it showed we were “wrong”. We probably spent close to $2M before we even had an “alpha” out the door!
Today, with the free services or at least low cost cloud services available on the web, you really can fail much more cheaply, afford to be wrong more often until you get it right, and investors are more expectant and tolerant that you will be wrong before you get it right.
Steve also has great guidelines on how you know you are right based only on smaller sample sizes and stresses that you can’t even think about scaling the business until you have a product/customer fit.
You also have to think about what kind of market you are in. Unless you are in an established market and are either trying to be the “best” or a cheaper or niche alternative, spending wildly to grow your sales typically won’t work, because there is no market there to spend it on (yet). This lesson was learned the hard way by many, many “pioneers” who ended up only with arrows in their back (think Palm, B2B markets, etc.)
The customer development model can be applied to more than just tech or web businesses as well. Right now in our renewable energy finance business, we are constantly trying to test different finance programs with different types of customers. Hopefully by the end of the process we will have products that fit each customer segment for each type of tariff and renewable technology. I also struggle with how to characterize say the “solar” market. Is it a new market that will still take time to develop or is it a segment of the overall established “energy” market where we will be “better” to some and “cheaper” to other. I don’t think many people in the industry think about it that way, hopefully we can gain an advantage if we can come to the right conclusions and execute on them.
Check out Steve’s latest lecture posted on his blog.
Solar Peripheral Opportunities - water conservation?
Beyond just panels or the generation piece of the equation, there are many opportunities in the space surrounding solar - from racking and installation solutions, to inverters, to cooling to storage.
Couple interesting articles lately discuss the massive amounts of water the utility scale guys are applying to pump in the Mojave desert here in California:
The utility scale solar thermal guys want to use wet cooling because it’s more efficient than dry cooling. Given the drought conditions here in CA (and the fact the desert is the best location for solar) along with dropping panel prices, it’s possible that the PV solutions may sooner or later give solar thermal a run for their money on these projects.
Also seems that somewhere some startup can figure out some creative process to create steam or cool these systems more economically (along with cleaning the mirrors/troughs) etc.
(Re)Think: Hawaii - vicarious thrills from afar
One of the great things about social media is how much you can learn from killer events, even when you can’t be there in person.
Great example is (Re)Think: Hawaii - by reading Dave McClure’s posts along with searching the hashtag #rethink (along with the slides on slideshare) you could really pick up a lot of the information about building a successful web business that was being shared at the conference.
Great example of the info available is Dave’s Startup Metrics for Pirates - AARRR (Acquisition, Activation, Retention, Referral, Revenue)
Can’t wait to see what they do with sustainability tomorrow.
Solar Power International 09 - The next “Internet”?
The show reminded me of the internet shows I used to attend, exhibit/speak at in the 1999 era (and a bit of the Search Engine Marketing show feel in the 2004-2006 era). Lots of optimism, rapidly increasing attendance (compared to last year, I think the show as about 3X as big both in attendees and exhibitors) and enthusiasm. Those are the good points.
On the other hand, I think there is equally as much naivete present in the audience now in green/solar as there was then in the “internet” space, especially among attendees looking at the commerical solar side. Most attendees have no idea how difficult it is to come up with good economics, sell the customer and finance a PPA or lease agreement. The sessions on exactly these issues were very superficial and there was very little practical advice offered on how to navigate the current market and its issues and successfully develop a solar power plant. Maybe the conference organizers consider this more of a general interest show and don’t want the speakers to dive that deep. Also I didn’t attend the workshop sessions on Monday, maybe they had a deeper dive in those meetings.
On the exhibit floor, the coolest thing were the small booth startups with new or “tweaked” technology. New microinverters, racking systems, monitoring, smart grid apps, panel/system cleaning systems, etc. This is one major difference between the green era and the internet era- there is real hardware being innovated here and real problems are being solved (the cost of producing solar power).
Andalay (not to be confused with Andole - the company that built ebay stores back in the day - which is kind of a funny parallel) did a great presentation in their booth on the benefits of their solar in a box system (with microinverters). Easier and faster to install, lower part count for simplified installation, better and more robust production (the microinverter effect), etc. I think ultimately there will be 1-3Kw systems available at Home Depot that a DYI’er can install, and the package will come with a “coupon” or something that can be used with a local electrician to make the interconnect at the meter.
Overall, it was a good show. Solar power may not be the best of the alternative energy choices from some perspectives, but it is certainly part of the solution, and the economics are getting better all the time. With continued innovation as well as support from the government (it was pointed out at the show that the total of alternative energy government support is still a fraction of that provided to the fossil fuels industry) there is a “bright” future for solar and it’s great to be part of a growing industry!
Startup Advice from Mark Twain
One of my favorite quotes about being an entrepreneur from Mark Twain:
“To succeed in life, you need two things: ignorance and confidence.”
Just substitute “starting a business” for “life”, and you have the essential ingredient for being an entrepreneur. The rest is just experience.
Who should own the solar asset?
Session here at Solar Power International 09.
SunPower has 450mw worldwide and 900 dealers.
Solar equipment companies starting to invest in installs.
New category of merchant plant which has no long term tariff, instead sells into grid on spot market. Also shared arrays that are owned in common and solar utilities. These are setup specifIcally to sell to an identified group of customers.
Duke Energy-presence in 5 states. Own renewables and also invest. Solar, wind, biomass. Also buy RECs. DG program is a roof lease program. Duke owns the arrays and power produced.
Power rates in North Carolina are $.04 commercial and $.08 residential. Coal is predominant.
Recurrent feels they are different because they do 2-20 mw distributed. Not sure about that, there’s quite a few that do exactly the same thing.
Hudson clean energy provides capital. Claim 500mw pipeline.
For RE they think DG should also include solar at the distribution point or substation. Following IPP business model. Essentially doing utility scale solar in a distributed fashion.
Believe in rooftop rental program with power sold on feed in tariff.
Remainder of Arno Harris’ presentation focused on advocating role for IPP’s (like RE). 500 MW between SCE and PGE for IPP.
1000 more in CPUC FIT proposal.
Opportunity for IPP’s has drastically improved in last year.
Expo Hall at Solar Power International 2009
System Financing Session-Solar Power International 09
Panel discussion. Ed Feo of Milberg thinks it’s crazy that there isn’t standardized docs for solar PPA’s. Also important to make sure all parties have same expectations as to costs and benefits, prior to commencement. What can be standardized or simplified? - power purchase agreement Feo thinks that a lot of customer education will be required to get customers to understand why it’s good for them. Part of the value proposition for customers is reduced costs. This panel could be much more valuable if they would talk about actual agreements and specific contract clauses. For example liability assignment, risk of loss, production agreements, easements or site licenses, etc. This is basically a bunch of semi useful general “concepts”.
