Scott: 0:03

If they're not experts, how do you know you're getting a fair shake out of this, solar asset? Well, you kind of have to, since, you know we put up all the capital to build the dang thing, If it doesn't produce, you're not buying it from us. So, worst case scenario, the system isn't producing and you're just buying from the utility per usual. Now you're obviously gonna be mad, but imagine how mad my investors are because they're not recouping the capital they invested. And so we all win together when the system is most optimal.

Tom Raftery: 0:29

Good morning, good afternoon, or good evening, wherever you are in the world. Welcome to episode 248 of the Climate Confident Podcast, the place where business leaders come to understand not just where the energy transition is, but where it's actually heading. I am your host, Tom Raftery, and in today's episode, we get right to the heart of a transformation that's quietly reshaping commercial energy markets. Most of the time we talk endlessly about megawatts and emissions, but far less about business model design. Who owns the assets? Who carries the risk? Who guarantees uptime, and how that changes the incentives for customers, developers, and utilities alike. My guest this week, Scott Therien has lived that evolution from every angle. He began in the days when commercial solar meant construction contracts and one-off installs, and now he oversees long-term power purchase agreements where developers own the systems, carry the financial risk, and only win when the customer wins. It's a fundamental shift on how clean energy is financed, operated, and delivered. This episode isn't just about solar panels. It's about long duration partnerships, storage as an optimization engine, regulatory friction, the death of CapEx driven thinking, and what actually separates successful projects from expensive disappointments. Scott, welcome to the podcast. Would you like to introduce yourself?

Scott: 2:03

Sure. Well, first off, thanks for having me, Tom. It's a pleasure to speak with you here on the Climate Confident Podcast. My name's Scott Therian. I'm the Director of Strategic partnerships at REC Solar. I lived on the central coast of California where I raised four kids. Been up and down California most of my life. Got a couple of engineering degrees. Did a little bit of internship with NASA and a local utility Pacific Gas and Electric before joining the solar industry in 2010 and have been at it since then.

Tom Raftery: 2:33

Okay, very good. And REC Solar, tell us a little bit, about that.

Scott: 2:39

Sure. REC Solar that's where I started my, my career in 2010. We've been around since the nineties. It was founded back in 1997 by two Cal Poly graduates. That's the local university we call it Cal Poly. It's where a lot of our employees have come from over the years, but they started that back in the nineties. They've got a interesting story that kind of mimics I think what a lot of the solar industry has been through over the years. You know, humble beginnings here, just kind of a local company. By the time I joined it in 2010, was over a thousand employees.

Tom Raftery: 3:13

And where does, well, two questions I guess. First, where does the name REC Solar come from? And second, what were two guys doing in the nineties setting up a solar power business? No one had heard of solar power back then.

Scott: 3:28

Sure. REC Solar, it originally stood for Renewable Energy concepts. Although I think we've been just called REC Solar since boy, at least the turn of the millennium. it was a Fred Sissen and Judy Staley were the founders just hoping to dream and an idea of doing some renewable energy. Built this little company and when it has humble beginnings, I mean very humble beginnings. Just a couple of passionate people just figuring out how to make this thing work. It evolved during the early years, and I know they both became staples in the solar industry. Judy Staley, at least she's had her fingers in a number of successful solar companies over the years and, yeah, happy to, been able to join and be a part of it.

Tom Raftery: 4:07

Great. And what, what do you think now, coming full circle back to today is the biggest challenge you're seeing for organisations trying to transition to clean energy?

Scott: 4:20

Sure. And I should say we've, we've adapted a lot over that time. When we were back in 2010 when I joined the org, we were really an EPC contractor and which is engineering procurement construction. Basically mean we do design build we build directly for clients. So we were direct to consumers building solar systems that they would own themselves. Although we had a operations maintenance team that did a lot of the o and m for them. And as we evolved over that time, right?'cause the commercial arm was shortly after we spun off Duke energy the large utility out of the East coast of the United States took interest controlling interest in REC Solar. And I think that was around 2014 or so, and eventually fully acquired REC in 2017. So we began this transition to what we call an IPP, an independent power producer. So where we're owning and operating our own solar assets and selling to our clients through power purchase agreements. And that was quite an interesting transition and presented a number of challenges along the way. It is a more common business model now. So you've seen this huge transition to IPPs and becoming more and more efficient at being a third party operator which is where REC is today, and excited to do our part in that.

Tom Raftery: 5:34

Sure, sure. So that transition means you've gone from selling solar equipment to now giving solar equipment and consuming the energy from it, selling the energy to the people under the roof where it's on or similar, or the fields that it's around, or that kind of thing. It must mean you're very asset heavy at this point, that that has to have been a huge challenge on just even from an accounting perspective no?

Scott: 6:04

Oh, a hundred percent. And, and you nailed it right on the head, just the, the accounting just sort of the key performance indicators and the metrics that govern the business shift completely as you know, you go from being a basically a construction company specialising in solar, but you're a construction company at heart. You've got crews, you've got equipment running projects and shifting into this asset ownership, it changes everything, both the, the stakeholders and what they wanna see out of the business and how that drives decisions. I mean, I think one of the biggest shifts is just the, the nature of the contract. As a contractor, you're signing a project, you're gonna build something for someone to own. You're getting paid as you go, and when you're done, you're done . Now we're signing power purchase agreements, or PPAs that are 20, 25, sometimes 30 years. So the contractual risks and obligations that come with that are a long haul for us, and it just takes a different lens. I, I don't know that one's better or worse than the other, but just takes a different business orientation to make that work.

Tom Raftery: 7:08

So I'm guessing, and correct me if I'm wrong here, but I'm guessing the reason for the switch is to make it easier for companies to go solar because you're getting rid of the CAPEX cost for them. Now it becomes an OPEX for them, and you assume ownership of the assets.

Scott: 7:29

Yeah, that's the base case. So in that model of the power purchase agreement, I'll kind of give it a high level overview for some of your audience that's not as familiar in the solar industry, but you, you kind of alluded to it, where we have an agreement that basically says, rather than you pay us to build you the system that you own you give us sort of lease rights to your roof or the field outback. And we're gonna build a system, meaning we pay for it out of our own pocket to build this system, get it operational, and then as it produces energy, we'll sell it to you and bill you. We basically become your, your second utility. Except that we're, we're easier to deal with and we're cheaper. That's the idea. So, in that model, the, I think the key benefit for the offtaker, the energy user is that they don't put any money up front. And that's the base case of why I think PPAs have become so prevalent. They are the preferred procurement mechanism, and that's sort of what drove a lot of the shift in the industry to kind of, at least on the commercial side, to really focus around this PPA model or this third party ownership model. But there's a number of reasons clients prefer it. The, the base case is, Hey, we got, we don't have a million, 2 million, $3 million lying around to invest in a solar asset. Let's talk to the folks who do, but it also is just a simplicity of ease, right? Whether you're a manufacturer or a school district or a hospital, you've got your core business to run. And as soon as you install this large solar asset. I mean, maybe you've got a facility manager, maybe he's been running a central plant and folks in that sort of arena that have a more complex facility with lots of infrastructure, it might make sense for them to own it. But if that's not core to what you do, if you're a school district or a warehouse, what do you know about running energy assets? And do you really wanna staff up and bring on new people to become experts and run that maintenance of the system and, and, and learn how to operate that? So it becomes this sort of easy button, well, we'll have you do it. Come build the system. You front all the money, but it also puts us on the hook, right? So you wind up with this really aligned interest where they defer to us as the experts and well, how do I, you know, if they're not experts, how do you know you're getting a fair shake out of this, this solar asset? Well, you kind of have to, since, put up all the capital to build the dang thing, if it doesn't produce, you're not buying it from us. So, worst case scenario, the system isn't producing and you're just buying from the utility per usual. Now you're obviously gonna be mad, but imagine how mad my investors are because they're not recouping the, the capital they invested. And so we all win together when the system is most optimal. And so what we, I've seen in the past for systems built 10, 20 years ago clients bought it. It was a one-time procurement for them. Then the opex of actually doing the maintenance that's required. falls to the wayside as you get wrapped up in other competing businesses and just becomes this other deferred maintenance. Now haven't done the manufacturer's required maintenance, so now your warranty might be no longer valid. And the system's just not performing. Their systems out there that are performing at 60, 70% of what they were expected to do, and, so for us, that's core to what we do. We have an asset management team and o and m team. All those costs are on us. We insure the system too. So if there's a force majeure event, lightning strikes the system we're the ones out there and fixing it as quickly as we can so we get up and operational again. So it just kinda offloads all that risk from the client, puts it on us. But then we're also able to do it far more efficiently as opposed to a random business that's got one system and has to figure out that o and m, we have a fleet of assets. And we can deploy technicians to optimise that. So we have some cost saving benefits and things like that to it. So, that's, that's a few of the reasons that PPAs have become so prevalent.

Tom Raftery: 11:10

Okay. And your systems, are they just solar or is there a storage component as well?

Scott: 11:16

We are REC Solar but don't misconstrue that to mean solar only. I think anyone in the solar industry right now has to get comfortable with storage. Particularly if you operate in California, which is where we're based. We operate nationally, but we've got a bit of an anchor in California as that's where we're born and raised. And storage has become an integral part of it. So we're seeing more and more adoption of storage to pair with the solar. We do a little bit of you know, storage only plays. We've actually, in our operational fleet, we have small fleet of fuel cells that would continue to operate. It's not core to our business but certainly the solar plus storage solution is becoming more and more popular.

Tom Raftery: 11:54

And why are your clients going for this option? I mean, if I were to roll up to them and offer to put a diesel generator in their backyard instead of solar or a gas turbine plant offering them electricity from that rather than the utility, why would they choose REC Solar versus my solution?

Scott: 13:29

Sure. and usually when folks tell me they want a grid resiliency solution, that's one of my first questions. Why not a backup generator? Right. We've been doing that forever. And I think when we look at resiliency, there's sort of a different lens to put on it, but the case for storage is, it's a cost saving mechanism. So I mean, the, the base case for Solar plus storage is, it's a purely cost savings benefit, meaning we're reducing your utility bills. So, if you are in a state that would allow you to, and in a lot of states like California, you can't just run a generator, run your house instead of buying it a utility, it's probably not gonna be more cost effective anyway. But solar plus storage is quite cost effective. The primary purpose of the storage is to optimise the solar benefits 'cause solar's pumping out energy all day long. When the sun is high, you wanna use your energy all day long and through the night. Well you don't really match your energy usage with the pattern of the sun, much to my dismay. Storage has a very cost effective way to smooth that out, shift that solar energy into the hours when you're using for energy. So the base case there is really just to reduce your energy bills and it's just a clever way when we can mix technologies to build an optimised solution around reducing your energy costs at the end of the day. That's, what we're after.

Tom Raftery: 14:40

And obviously having changed from being a contractor to now a full owner, operator, and developer, does that change the kind of relationship that you build with clients?

Scott: 14:53

Absolutely. I think. It changes the lens by which they look at us too, right? We're not a contractor that's just gonna come and build this thing, and then we're gone. We're there. We're getting married for 25 years. It changes the relationship. It changes the conversation and how we look at things. It certainly changes how to step through a contract. You're used to, you know, you build a building, there's a utility, and there you go. They give you your energy. We come along and say, well, you have choice, right about that energy. Energy is not an arena where folks are used to having choice. I think it's a good thing that they have choices now and think they would generally agree, but they're not used to thinking about how to procure energy. And so it is definitely a little bit of a mind bending exercise to think about getting in this long term, 25 year agreement for the purchase of energy off a system that lives in your backyard.

Tom Raftery: 15:42

And it's a subscription service for them, so they're subscribing like a Netflix account. They're subscribing to REC Solar for their energy for that 25, or 20 or 30 or whatever year period it is. So it becomes far less about being transactional and far more about being relationship building, right?

Scott: 16:04

Yeah, that's, that's exactly Right. And I should clarify, I've kind of been speaking from the lens of behind the meter or you know, onsite solar where we build it at your facility and put it behind the meter. There are mechanisms you know, through community solar that is rising rapidly throughout the US and particularly in certain markets where you can sort of be a subscriber to a system that lives somewhere else in your community or you know, it's been very big down in Texas where there's these large utility farms, utility scale solar farms that you can be a subscriber to and kind of buy the electrons off that system that lives somewhere else. Most of what we do is direct on your site, behind the meter where it lives there, you actually directly use the energy not put it out onto the grid and buy it later. In any of those cases though, it is, it's a 25 year contractual relationship where you're subscribing to buy your energy from REC Solar. And so it is a long term partnership basically.

Tom Raftery: 16:59

Yeah, and obviously there's still a grid connection there in most cases, so that if something does go wrong with the system, you can still pull in energy from the local utility.

Scott: 17:09

Yeah, that's right. In fact, in almost all cases we're gonna be putting some energy back onto the grid. So you've got, a utility meter that's historically only spun in one direction. As energy comes in and you use it, you pay 'em for everything you use. So now we put a generating asset behind that meter. And so when you're using energy and the sun's shining, you're taking that energy directly off the solar farm in your backyard rather than pulling it off the grid. And thereby you reduce a lot of what you're using from the grid, but then when the solar's producing more than you need, it's effectively spinning your utility meter backwards and putting that energy out onto the grid. And then later at night, when solar's not producing, you pull it back off the grid. Effectively in that case, we're using the grid, like a, battery bank where we can store energy we can overproduce, and that way we can produce a hundred percent of your needs from the solar, but not on demand when you need it, right? Because of the intermittancy of renewables. We put it out onto the grid, you buy it back later. And all the local policy dictates the rules by which you buy that energy back and those policies are ever evolving. And they vary by every state and utility. So it becomes a game of learning learning all the various rules and all the various markets you wanna operate, which can be complicated. But as those rules evolve you see states get very saturated. Hawaii's the perfect case. California's really getting there too, and the utilities start to, struggle with being your battery and managing all that in and out of the energy. And so you may not get a one for one credit, right? So when we put energy out onto the grid, midday, when we're overproducing, when you pull that back at night, you know, you might get 90 cents on the dollar, maybe it's 80 cents on the dollar, and this becomes that optimisation game that we're trying to do with you, of figuring out what's the right way to size the system. And the right, time to produce, the right amount to produce so that we're optimising your utility savings, not just the cost of our energy, but the, net benefit to you by means of which it's offsetting your utility costs. So this is when storage comes into play, when those rules become unfavorable and the grid is not a cost effective battery because maybe you get 30 cents on the dollar for everything you export when you reimport it, or maybe they just straight disallow it. And we do have some markets where utility just will not allow you to export depending on where you are on the grid. So in those cases, that's when storage can come into play and do that optimisation for you, be that battery bank for you, and shift that energy around so that from the utilities perspective, you're not creating problems on their grid and you're still optimising the benefits to the end user.

Tom Raftery: 19:47

Are there any particular industries that you're dealing with more than others, or is it pretty much across the board? And as a follow up to that, have you any successful customer stories you can talk to about, you know, people who have rolled out one of these systems and the amount they've saved or anything like that?

Scott: 20:07

Sure, we've seen a lot of successful stories. We've also seen a lot of things go wrong. We've operated really across all sectors of the industry. I think the only thing REC Solar's never touched is the big utility scale, you know, one, 200 megawatt utility farms, it's never been core to our business. We're really distributed generation, commercial sized. So coming up early on we were, you know, selling to small businesses, local to the company. We eventually grew that till we had a whole federal arm. We did a lot of, Veteran Affairs Hospitals. We did about 30 of those across almost as many states and some other federal projects as well. We had some of the Fortune 100 early on. Early on I think we were working with Costco and ikea. They were early adopters of solar and we did 30, 40 projects each for them, all over the states. And they were a large part, both the federal and these inter national clients were the ones that really expanded us across the US, took us to states we never thought we'd do solar in. But our core is commercial and industrial clients. And then a lot of municipalities, we've done a lot of schools, universities, and I should say when we were an EPC coming up early, we did a lot of the agriculture sector in California. That was a lot of growth for us early on. The Central Valley of California has a huge agricultural industry and very sophisticated buyers, very smart buyers. And I think that's what made us so good at getting repeat clients.'cause in that industry, you don't get another project unless you made the last client very happy. Word of mouth is huge in that industry, and they were, good folks to work with. But as we stand today, we're mostly national clients and we're mostly doing like, C&I, a little bit of community solar, doing some of the smaller utility stuff. So we've been having some utility off-takers, still working with the enterprise clients. I will say we've shied away from the Fortune 100. There was a time when REC had our own, we called the enterprise sales and their sole mandate was to go after the Fortune 100's. Being an IPP and, you know, these 25 year contracts, the credit worthiness of our counterparty is very important, right? We need to know they're gonna be around to pay us back for 25 years, Fortune hundred's, got great credit. And they also have a lot of energy usage. So they, they make a great client in a lot of ways. However, what we've seen from some of them the way they procure when you're used to buying widgets and you're a low cost leader as a business, you're very used to getting a very competitive rate for everything you buy. And that can turn to kind of a procurement department that grinds down their vendors to get the lowest possible price. When you're optimising solar, lowest price doesn't, translate to best value. And the best value conversation is very complicated, because because as we were talking about, the, the mechanisms by which you save, it becomes this optimisation game of offsetting your utility bills. And what are the local policy rules? What's the interconnection rules? How do you use your energy? How is your energy usage gonna evolve with time? So, how do I design my system to best optimise it? Look at the rate tariff you're on. Sometimes with your utility, sometimes you can switch your rate tariff. So it, it becomes this, this whole rate analysis game becomes very complicated, and doing that optimisation takes a lot of back and forth. I need to ask you a lot of questions. I need a lot of data from you on how you're gonna evolve your business and all that. And so it can sometimes be difficult to, do that in the confines of the procurement mechanisms some folks want to use. And so, what we see commonly in, the US markets is this request for proposals, this RFP process. Running this competitive solicitation. And that's great. I mean, you're gonna get me to try a little harder. I know I'm in a highly competitive environment. Maybe I take a little bit lower returns, but my lower returns don't necessarily translate to the best savings for you right in that optimisation game. And so whatever that initial procurement solicitation shakes out as a sort of how are you gonna find a partner to work with in this? What I've seen work best is, really when you work with people you trust and you can build a relationship and it takes, might take a year or two to develop some of these projects. They have a long development cycle and you've got a lot to uncover along that way. You've gotta submit your interconnection applications with utility, their review cycles can be months. You gotta do an investigation if you're put something in the ground, right? You gotta do the geotechnical studies, you gotta do a lot of design work. You gotta talk to local permitting jurisdictions. And the nature of what your building's gonna evolve with all this feedback and pushback. Organisations tend to have a lot of stakeholders. And I'm giving you kind of a roundabout answer to tell you what I see what I've seen successful procurement methods here. But most of the success stories, they have an advocate in the organisation that is dedicated to driving this, that understands what the other stakeholders in their organisation want. Okay. You tell me you want cost savings, so how much cost savings is enough to make sense to do a project? Okay. You tell me you want resiliency. Okay, well, how much do you want resiliency versus how much do you want cost savings? All right. You tell me, you your roof's coming up for replacement in 10 years and you don't have the money to do it before you put the solar in, and you may have an expansion in that open land you own outback. Well, how likely are to do that expansion, right? With this whole back and forth? I've seen so many times where, we think, okay, this is what we're shooting at. This is our aim, these are our goals. We start building a system, we start designing it. We step through all these processes. And then some other stakeholder in the organisation that I didn't know existed says, well, hold on a second. That's not what I need. We, we need this. We've, we've got this other you know, big initiative planned in the next five years. You can't put that there. You can't do this. So, a lot of it just comes from, 1) having a good partnership where you've got open dialogue with your, provider, you've, you've gotta be able to walk through the optimisation game with them. And, you've gotta understand what your stakeholders are. Define your goals upfront. I mean, those are always my first questions. It's like, what are you trying to do? Why do you want to do solar? You, that's sustainability initiative. You just trying to save money. How much is one worth versus the other? Right? Really suss that out and then we can start figuring out how to optimise the solution that achieves those goals. It's a complicated procurement for sure particularly for organisations that have never done it before. Yeah, and I think one thing I've seen, I'll say a little more about the public sector. When I first shifted, I started off as an engineer. I you know, I did that for about seven years and then jumped into the sales side of the business. And I primarily carved open our public sector direct to K 12 schools, universities. We did I think over four years, we did about a hundred megawatts in that sector alone. And I had a rule of thumb there where when they issued an RFP, if it came directly from the municipality, the school or the university, I wouldn't respond. We would just rule it out immediately. We're not responding to this RFP. If they had a consultant that they brought on board, now I'm in. And there was a handful of consultants we knew throughout the industry that were particularly good. And what we knew then was that they had an in-depth conversation with someone they trusted and they got it mature enough to figure out what do we really want? We're actually ready to do this. And we found that on those RFPs we get on the other side of it, it's still highly competitive. But we knew we had a path forward. A lot of that legwork had already been done. And so if you can't get with a end provider that you trust right off the bat, find a, a consultant. And our industry is filled with very good consultants that'll really help you figure out a lot of what you need to before you can gauge those providers in a meaningful way. That's particularly in the public sector, I think that works really well. If you're a, Fortune 100 and you've got a couple billion coming in a year, maybe you hire your own energy manager, get a dedicated person that, that will understand this maybe came from the solar industry as a seller and wants to work on the buyer side. I think having that expertise upfront, is critically important. It's what I've seen work.

Tom Raftery: 28:08

And you said you'd seen both successes and failures. What separates the two?

Scott: 28:14

I mean, I think there's a lot of different things that can drive you one way or another. The successes, I think what, what separates them is knowing what you want so that you can look at it afterwards and see, did we achieve what we set out to achieve? I think with the failures, it's a little bit of shooting at a moving target and just trying to get the lowest possible price and hopefully that system actually works at the end of the day. It's hard to kind of report back on did we achieve what we were after if the, the goal was simply to throw a bunch of solar panels on the roof. Okay. You did that. But what were your goals? Your goals to achieve a meaningful reduction in your carbon? A meaningful reduction in your utility bills? You know what? Whatever those internal corporate goals are, or organisational goals, you should be able to look back and measure and say, did we do what we wanted to do? Because otherwise, you, you, you can't say you had success if you, if you don't know how to measure it.

Tom Raftery: 29:09

One criticism I've heard of solar is the fact that it takes up a lot of land and obviously if you are doing it for businesses, you can do it on their roof. So not taking up land or as you mentioned, you could do it in kind of fields or areas of patches of land they own around. Have you come across any clients who are doing it? For example, to cover their car park.

Scott: 29:35

We have a ton. I mentioned the veteran affairs hospitals we did. Those were a hundred percent carports. Most of the K 12 schools and universities we've done were carports or, shade canopies. What we've seen there actually is not just in the parking lot, which parking lots are a great use. It's expensive, right? You've got a lot of steel going on to, to put 'em up. But in certain climates, it's providing some ancillary benefits that are non-trivial. I mean, in, in Arizona we see them building shade canopies over their parking just for shade. So if you've already got that as a sunk cost, throw some solar on there, get some energy out of it. but it's, otherwise dead space. Provide some shade for the cars. You can produce a lot of energy. And then in the K 12 and university space, what they do too is sometimes by an athletic field where they play they'll put up a shade canopy or even in play areas where the kids play in the sand, it gets hot, they'll build it over that and you can put it a little bit higher and build a shade canopy. And got this wonderful picture of the system I built for a K 12 school. That's like a primary and middle school trip. And there's these shade canopies we put all along the soccer where the, the parents all sit under, so they're all sitting in the shade while they watch their kids play. So there's creative ways to work. I think within the landscape, you're, you're working with, using dead space is always great, right? Your roof, your parking lot. We've done a couple systems where maybe there's a floodplain that you can't build in or even a, a built detention basin where they've, carved out a detention basin for overflow and we can build, it's not exactly a canopy system, but maybe even just an elevated ground mount so that even in the flood, the system's still fine and it's just sort of up out of the floodplain. But it's land that you, you know, isn't otherwise necessarily useful or where we're not disturbing the, the use of it. I think we'll see more and more growth in the agricultural sector where we're, finding ways to optimise land for both agricultural use and for energy use. And do those in conjunction. We've done a couple projects like that. We did one with, with my alma mater here in town. They have an agricultural that does sheep grazing and they had some areas where they graze sheep. We built a system out there and part of our, O&M costs in in certain regions. So we gotta come, keep the weeds down so that they don't grow into the equipment or shade the panels, well sheep do a great job of grazing that. And so we were able to work that out with the university. It reduced our integration costs. Let their sheep graze there, and they did some studies on it too, and I think they produced a couple of white papers around it. So there's a lot of symbiotic situations we can find to where optimise our solar generation while still be in good stewards of the land.

Tom Raftery: 32:25

Nice. Nice. Yeah, I've, I've seen some studies out of Australia, I think it was where sheep farmers who put up solar got even greater yields for wool and better quality wool from their sheep because the sheep were in the shade, you know, for significant amounts of the day. Whereas otherwise, it'd been in the sun all the time and, that would've been damaging the wool. So, as you said, it's a nice symbiotic relationship

Scott: 32:51

I hadn't thought about that. It's a It's a nice side benefit with the with the sheep grazing.

Tom Raftery: 32:55

Exactly. Exactly.

Scott: 32:57

That's great.

Tom Raftery: 32:58

Yeah. Yeah, yeah. If, if you were to look ahead five years, what's the next big shift you expect in commercial solar, do you think?

Scott: 33:06

I think the, the, the biggest shift we're all kind of gearing up for is a post ITC world. Right. 2020 five's been a, a year of regulatory changes across the United States. But the, the ITC is the Investment Tax Credits, the major federal incentive, it's been around quite a long time, actually goes back to the seventies. But it became most meaningful in, 2005 or six when it became 30% tax credit. It's been, the governing force behind the solar industry, I think at least the major incentive that drives a lot of the economics and it drives a lot of how we've structured our power purchase agreements in the structured finance to make sure we're monetizing those tax credits as efficiently as possible. It was always meant to be a stopgap measure to help propel solar forward, but solar has arrived. We are the dominant energy generation source that's expected to, produce most of our energy growth in the near term. And being on the other side of that ITC is something I think we're all kinda getting ready for. However, the way we structure our finance behind the scenes is gonna be very different, right? We've become so accustomed to a certain mechanism of, the way we put together our funding, sort of behind the scenes of the, the back office. And that'll evolve as the ITC evolves.

Tom Raftery: 34:26

And where do you think solar and storage will have the biggest untapped impact? Is it in cost, savings, resilience, decarbonisation, or something else entirely?

Scott: 34:37

I think we're gonna see a lot of growth in the utility sector. It really is the cheapest form of new generation. So most of the utility scale growth is expected to be solar, at least currently. I mean, data centers change everything. But it'll continue to be a dominant player, I think in the DG space or the distributed generation. in some markets like California, it's just becoming the staple. If you build a house, you put solar on it, right? So I think it's gonna be a little more normative. And the benefits will kind of just be taken for granted. So you might see more widespread adoption, but a little less focus on the benefits there. It's gonna produce savings, I think in, in the way we do our energy. And it's, gonna, continue to provide, you know, sources of decarbonisation as we transition. I do think the rise of data centers are gonna change the game, and I don't think we know yet how that's gonna change the mix. You know, a lot of folks are looking at building modular nuclear reactors right next to their data centers and that may or may not take off and become a thing. And there's, I think, a, a lot of folks looking harder at clean gas or green gas. Forms of natural gas or hydrogen that might be viable solutions, but solar is gonna be a part of that mix. Storage is gonna be a part of that mix. These, technologies are really here to stay. It's just a matter of finding the right balance of, what are the right technologies for the right use cases. How do you provide your firm power? How do you provide your cost optimised power that might be intermittent? solar and storage are gonna be a key part of that. It's a little early to tell just how much the grid's gonna evolve as we could potentially see drastic increases in load growth.

Tom Raftery: 36:08

And for people who are listening who've been thinking about solar for years, what would be the first step they should take having heard this episode?

Scott: 36:18

That's a great question. I think the first step, take a closer look at your utility bills. A lot of you are probably on rate tariffs where you pay a lot more during certain hours than other hours. And how much are you using during those hours than the other hours? And why? Do you need to do your laundry during those peak hours? Could you do your laundry in the morning? It's a good idea to wrap your head around that first before we think about how do we generate all the energy we need that we're using? Think about what you're using, and what your usage patterns are. Maybe you can change 'em, maybe you can't, but at least you know, and you understand, okay, here's how I'm using them. And then you can start, you know, talking to a, a solar contractor or someone that can help you understand what your options might be for putting solar on your roof. And as you understand your energy usage better, you'll understand better what those needs are from the generation source to optimise that scenario for your near term and long term needs. Keeping in mind, a solar system is, 20, 30 year asset. There's no reason it shouldn't be around for 30 years. So you wanna think about your growth too, right? What are your, how how's your use is gonna change? Do you have four kids in the house like I do right now? as they slowly move out, all my usage pattern's gonna change. Versus, I don't know, maybe you're gonna be expanding your family's growing, and you might have more usage in the future. So, Those are simple things to think about before you make an investment. It's a non-trivial investment. You want to think about it and do it in the right way.

Tom Raftery: 37:40

Yeah, yeah, yeah. And of course, if you're planning on buying an EV or whipping out the gas pipe, coming into your home and replacing with the, maybe you have a gas fired stove and you're getting rid of that and putting in an electric stove or, you know, there's all these kind of things you've gotta plan for. Just myself. The rate we have here, there are three rate bands depending on the time of usage, and one of them is, 8 cent per kilowatt hour, and that's between

midnight and 8: 38:11

00 AM for every day, but it's also between midnight on

Friday and 8: 38:17

00 AM Monday morning. So the entire weekend is 8 cent per kilowatt hour. So that's the time that I use to charge the car. So I'll plug the car in during the daylight hours of the weekend so that it's drawing from the solar panels. So I'm filling the car essentially for close to free. So it's yeah. Yeah. So when you start thinking about these things and, and just, you know, making sure you get your rates right and then you're matching your usage to your lowest cost rates, plus you've got the solar as well. It's, it's a nice exercise to do as you say,

Scott: 38:58

Well, you've got this figured out. I think their first step should be to call you and get some advice from you on how to optimise their usage.

Tom Raftery: 39:07

How, how do you think the solar sector can make sure the momentum we're seeing now turns into a long-term systemic change? It's a big question.

Scott: 39:17

Yeah, I'd like, I mean, just honestly, this is my personal experience. I'd, I'd like to see a little less doom and gloom from solar right now. I think the tumultuousness we still have this tendency. We got stuck in this mode of, oh, we're this new emerging technology and we've got all this headwind, we got a rail against, and ah, how do we make it work? As I said earlier, solar's arrived. This is a staple of our grid economy. We're not an emerging technology. It's been 50 years since there were panels on the White House. This is not a new thing. And bringing that mentality of understanding this is a long-term stable solution that's not going anywhere, I think is important. Sometimes those of us that are a little too in the weeds of some of the friction we run up on, on a regular basis carry that out into ways that feel I think it harms the, the confidence in the industry. It's time to pat ourselves in the back and say, no, we we're doing a good job we're doing great. And so, it's a little bit of a, a cliche answer to your question, but I, I, I do notice culture's everything and, it's, it's important to keep the right mentality as we approach what we do for a living.

Tom Raftery: 40:29

Cool. Cool. A left field question for you, Scott. If you could have any person or character, alive or dead, real or fictional as a champion for solar, who would it be and why?

Scott: 40:44

Oh, that is a left field question. Actually, I gotta just go with my gut, where my mind went immediately to Nicola Tesla. As I was coming up, getting my degrees in college. I read a lot about him and what a mad scientist had some cool, crazy ideas and I don't know. I, I think he'd be an interesting person if he was alive today to comment on the state of affairs and I'd, I'd be really interested to get his perspective. And he's a guy I'd like in my corner as I'm approaching all things energy.

Tom Raftery: 41:13

Nice. Like it. Very good. Okay. We're coming towards the end of the podcast now Scott, is there any question I didn't ask that you wish I did or any aspect of this we haven't touched on that you think it's important for people to think about?

Scott: 41:27

Well, I think, I think you nailed it, Tom. It's been it's been exciting to talk about these things. These are things I'm passionate about. I'm, I'm excited to talk about it whenever I can with someone who's interested as well.

Tom Raftery: 41:38

Super, super. Scott, if people would like to know more about yourself or any of the things we discussed on the podcast today, where would you have me direct them?

Scott: 41:47

You can find me by my name Scott Therien on LinkedIn. I use that to keep in touch with colleagues across the industry. And if you're interested in what we have going on with REC Solar you're always welcome to visit our website at recsolar.com. We have some blog posts there and news and stuff and learn about what we're up to there.

Tom Raftery: 42:04

Perfect. I'll put those links in the show notes as well, Scott, so everyone has access to them. Scott, that's been fascinating. Really great discussion. Thanks a million for coming on the podcast today.

Scott: 42:14

Well, I really appreciate talking with you, Tom. Thank you so much.

Tom Raftery: 42:16

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about the Climate Confident podcast, feel free to drop me an email to tomraftery at outlook. com or message me on LinkedIn or Twitter. If you like the show, please don't forget to click follow on it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.