 Okay, we're back. We're live on a human Wednesday morning for the 10 o'clock plot with Roland Graham, solar tech Hawaii, who is our neighbor on the sixth floor here at Finance Factors Center. Welcome to the show, Roland. Hello, Haji. Thanks. Great to be here. So tell me, what is solar tech Hawaii? Tell me about the company. Tell me about who's involved in doing what. Yeah, sure. Thanks. Solar tech is a PV contractor. And we've been around for about eight years. Our president and founder, Mike Tanavasa, started the company, still runs and owns the company, has a fantastic team together. And yeah, I've been thrilled to be a part of it. Mike started the company, kind of the grassroots as a service company, doing a lot of service for solar PV systems. And as a result of those first three years or so, thousands and thousands of customers on their roofs, troubleshooting, servicing, doing things that were needed at the time, back in the time when solar was really, really cranking across the state. And now for the last four years or so, doing both a mixture of service as well as new build-outs, new systems, and very active. Basically, 50% or so of our work is service-related work and 50% of it is new build-outs. We're also finding a lot of customers that have had PV in the past. Consumption patterns maybe have changed. Maybe their bills have gone up a little bit and they wanna add some more panels or they wanna refresh panels. Maybe they've had them on their roof for eight, nine years, those early adopters. And it's time to get new panels. So we see some of that out there, demand from the customers. And so that's, yeah, a bit of history and solid company with good technicians, a solid crew that have been together for most all of the eight years together as a team. So this is your headquarters and finance factors? Yep, yep. This is where our main office is at. And as you can imagine, obviously our field guys that are doing all the work are in their mobile offices, if you will, moving panels all over the island and installing every day, no matter where it's at, primarily here on Oahu. But yeah, this is our headquarters, this is where we're at. Yeah, well, that's something like our thing. We have our headquarters, our studio here in the sixth floor of finance factors, but you like to contact people remotely. And so that's an example of you're in your office, we're in our office, we're 20 feet apart, but it works as well. And if you were in Varanasi, India, it would work about the same way. And we do have correspondence in Varanasi, India, by the way, in case you're wondering. So are you an engineer, by the way, Ron? I am not an engineer. No, I go to the company. I'm a business development and sales of the company, so the sales manager with the company and so customer relationships and emerging markets. This is where I really focus in terms of growth for the company. Okay, very important. In any tech company, that's very important. Those are the people you meet. So a couple of things you said I wanted to drill down on. You know, one is, you know, so Mike was doing service, Mike was doing service on solar, you know, and two things, one is what kind of things do you have to do to service solar panels, solar installations, what is service on solar? I mean, some people might think that it's just good for 20 years, leave it there, it'll be fine, but that's not really true, is it? Well, yeah, it's an excellent question. In the ideal world, that's absolutely true. That's true about our televisions, that our washers and dryers and, you know, all the technology that we engage with, we get them and they come with a 10-year warranty and we go out, we hope we never have to use that, but we like to set them in place and let them run and do their thing. But, you know, solar panels are out in a fairly harsh environment. You know, they're exposed to a lot of sunlight, of course, they're built for that. And so it's real common now for many manufacturers to be shipping products they have for years with 25-year warranties. That has been pretty solid for many of the reputable manufacturers. So in the most part, you can put them up on your roof, expect them to run for 25 years. And there may be some, you know, some things that happen in harsher environments where metals might corrode a bit in terms of mounting and these kinds of things. So you'll want to keep an eye on that. And that can be helped by washing them periodically, especially if you're in specific areas. People ask us this all the time, should I wash my panels every year? You know, our experience there in terms of service and washing and cleaning, if your house is fairly close to the H1, that's probably where you're gonna have the most amount of dirt buildup. We see that all the way along the H1 corridor, there's a lot of dirt sticks to your building and sits on those panels. Now we get a fair amount of rain in certain sections of the H1, you know, Hawaii, Kai all the way through Manoa and all in town here. But so if you get out into the leeward areas where there's less rain, then they're not gonna get washed off as much. But otherwise in most locations around the island, rain is washing them off pretty good. So that's the PV panel. The other piece of componentry to a PV system is your inverters. And there's two primary kinds of inverters. There's your microinverters where you've got one inverter for every panel and they're mounted right up underneath the panel up on the roof. And so that's a piece of electronics that is a potential place for failure. The primary manufacturer of microinverters in this space has been for years, has great warranties on those things. And we're not seeing too high a failure rates there. Again, for the most part, you're absolutely right. Put them up on the roof and let them run. They're 25 year warranty now on these inverters. And for the most part, we're not seeing any major problems. But from time to time, one of those things will go out and they'll need to be replaced. And so that's a piece of service that can happen. And then your last piece is kind of, for lack of a better term, a control center with an internet gateway where collecting the data from those panels and those inverters. And in most cases for many manufacturers, that data is being fed up to the cloud and a dashboard is available to a consumer on their mobile phone, on an app or a browser. And they can see what their system is producing. They can go back and look at the records and see what it produced last year on February 28th if they wanted to, I mean, but usually what they're doing is matching it up with their utility bill. If their utility bill is from July 20th to July 19th, they'll go take a look at their PV system and pull up the data from that particular timeframe and see how that corresponds. And so that's another piece of componentry that has a potential for failure. In most cases, again, it runs pretty solid. But those are the service slash maintenance things that typically will be pulled out on unless some major event happened. There was potentially a re-roofing that needed to happen. So the panels need to be taken off and put back on. We do a lot of that, remove and replace a lot of that. And so that would be another reason to get out there and touch the system. Otherwise, you're right, Jay, for the most part, most customers can count on that system once it gets put up there, largely running as intended for long periods of time. Well, if you have an option, I don't know if it's an option or it's always part of the deal, but if you have an option to take maintenance and to pay for it or not, you should probably take the maintenance because if you don't take the maintenance, you may wind up spending a lot in order to catch up later. Am I right? Yeah, I mean, there's risk and reward there, right? Certainly as a contractor, we want to help customers have their systems running consistently, stably all the way through and touching that system periodically, especially after the first five years will help prevent, right? An ounce of prevention worth a pound of cure. So if a system goes down, sometimes it can be frustrating. Oh, I didn't know it went down, I wasn't watching it and now you're coming in and you're doing firefighting on a system that has been down for a period of time and a customer is like, I want this back up and running as quickly as possible. And so you're right in that sense that some maintenance, an ounce of prevention is a good thing to do. We at SolarTech, we provide a five-year workmanship warranty on our stuff. So if a customer has an issue anytime in the first five years, you know, that's built into our deliverable from the very beginning. So feel free to call us at any point in time. We want to hear from you, you got questions, you're concerned about something, we'll oftentimes log in remotely, take a look at your system, you know, the electronics, what is the production that's coming off your system panel by panel and help do some troubleshooting. And then of course, if you're out there to the house anytime that it's needed to get up on the roof, take a look, help our customers. Beyond that five years, then there may be some diagnosis and then potentially a quote, you know, to serve as something if they didn't buy that, you know, that service contract that would go beyond five years. But anyways, those are the options for the customer to make sure. And SolarHotWater, you know, we haven't necessarily touched on that, but we do a lot of that. And it's very similar, very similar. And then you know about Bill 25, pending in the city council right now. In fact, all kinds of, you know, when I say an advocacy going on around this bill. And so I think it's worth, you know, discussing that a little bit. So some years ago, there was an attempt at the state level to incentivize or to require solar water heaters on every new residents. And there were so many exceptions. I don't think it was all that successful. But now the city council is doing it again in this Bill 25, just coming up now. And I wonder how you think that might affect you if you're an installer of solar water heater, no? Yeah, there could be a number of ways that that affects us. We've certainly seen communities here on Oahu, specifically where we do most of our work, where the developer, their builder, has done solar hot water as a standard option. We've seen some of that with or without legislation that requires it. Part of their competitive advantage, if you will. And so, you know, that has been done in the past. We, otherwise, you know, I think a mandate for it would certainly help raise the awareness of the benefits for it. Oftentimes, we'll have customers contact us for solar PV. And one of the predicating questions we'll ask them after looking at their bill and doing initial assessments of what their consumptions are, we'll ask. Having not seen the house, do you have solar hot water? It is one of those low-hanging fruits, if you will, when it comes to the cost of the system, the investment for the homeowner and the return on investment over time. It, you really can't beat it for return on investment, especially with the tax incentives that are still in place at the state level, the slightly reduced levels of tax incentives at the federal level now in 2020, still a fantastic return on investment, solar hot water, especially if the usage in the home is four or five people or more. We see that going up Hawaii Energy, the incentive group here, as you're aware of, has published some numbers. It's in the range of $20 to $25 per month per person that you can kind of estimate your savings when you get solar hot water. And so that's some real easy math and you can start to see those numbers. Now, obviously different families usage will vary depending on how long hot showers are. I'll often ask families, do you have teenagers, right? Because you might be on the high end of that savings, maybe because of the long showers, teenagers sometimes take, but depending on the family profile, they're going to see some savings there and solar hot water is a great way to go. So I would be in favor of that. How would that impact us? It would certainly, I would expect to drive demand, our direction, as well as any other contractors out there. But more than that, the bigger picture, Jay, I think, which we all should be cognizant of, and that is, are we on a trajectory towards our goal of being fully sustainable as a state, as an island chain by 2045? We don't do these, we don't help our consumers become aware of the savings and the impact positively. Then it's going to be a hard row, one contractor at a time, being out there knocking on doors, talking to people one at a time, it takes a lot longer than if the legislation were to come and really raise the awareness. And so I think it would certainly have an impact on our business, that's true. Well, one of the part of that bill is to make all new homes, residences in the county, quote, and I quote, because I'm not sure what this is defined as, EV ready, electric vehicle ready. And this speaks of the sort of the decorations on setting up a solar program in the home. For example, if I'm inclined to get an EV, I would really like to connect my EV to the solar facility on my roof. I would like to have it all automated, all work perfectly fine together. And then I've got sort of the perfect arrangement. If I do that, are you finding that? Are you doing that? Are you recommending it? What do you think of that aspect of the bill? Yeah, excellent, powerful set of questions there. I love it. There's an irony with electric vehicles. And it's probably not lost on most people who have really thought it through. And that is all around town. And I'm not speaking disparagingly, I'm just talking about reality. All around town, we have these EV charging stations going in and I'm in favor of them, absolutely. I sat about six months ago in an EV seminar that was put on by Hawaii Energy and the manufacturers of EV charging stations were there. And we've seen these all around. They get the preferential parking spots in a lot of these different places. And I'm absolutely in favor of that. My question at that seminar to the group in general and I didn't mean it sarcastically at all, right? But how many of those EV charging stations are actually delivering clean energy to the car? Right. Because most of those large buildings are not many of them, especially in the high-rise space where we are downtown Honolulu, are not powered by solar, certainly not by the owner of that building because they don't have the real estate for it. So our grid, as we all know, is largely powered by fossil fuels. Now, again, our utility is deploying large solar fields and that's fantastic, that's awesome. So we're getting more and more clean energy. But if you don't have a PV system at home or at the business where you plug in, when you plug in your EV to your house or to that place, it's worth considering where's that power coming from? Because if it's coming from fossil fuels, then I've essentially done the exact same thing as a consumer as going to the gas station, right? I'm filling up on fossil fuel either way. So when a customer starts talking about a PV and EV, that's a wonderful marriage. That's a fantastic direction to go. Now, the question really becomes for a homeowner. My PV system is running all day long. I might be gone. Very typical living pattern. You leave in the morning to go to work. You come home in the evening. Your systems have been producing all day. I come home from work, 536, 630. I go to plug in my EV. Now, my PV system is going down in production, right? Sun is setting, it's going down. And so I'm switching back over primarily to my utility. So that's something to be thought through again because you can buy a PV system, have EV cars and actually not necessarily affect positively your eco-vill if you're still using a lot of your stuff at night. So that takes us into the broader picture of batteries, right? How do I make sure I capture all of this PV, use it for my own consumption when there is no sunlight to actively run that PV system? So these are conversations and dialogues that we're having with almost every customer, every customer when it comes to, and the same thing is for air conditioning as it is for EV cars. I come home, my house is hot. I crank up the air conditioning to get it cooled down, right? When my PV system is losing its production, right? So my consumption in the home is cranking up. We come home, kids have had sports, whatever we turn all the showers on, we're running hot water systems. We start doing laundry and our dryers are going. We turn the stove on, we start cooking. All these high-consuming items inside the house are all running at a time when there's very little PV production. You look at the general demographic of usage, right? And so those things do absolutely, Jay, have to be considered a thought through and even one of those things. Well, it seems to me that the key to reaching our goals here really a key thing is storage. And you can have, there are other kinds of storage, but the one that comes to mind over right now and for the past several years is batteries and batteries are expensive. And there's a bill or there will be, if there isn't already a bill in the legislature, wrapping storage into PV installations. Now, my understanding is that if you build right now under the law, if you build a house with PV and storage, you get a tax credit on the whole package. But if you add storage later, you don't get a tax credit on that storage, which is really irrational, I'm sorry. And PV interests are probably including your trade associations have been trying for the last four years to change the law on that so you can get a tax credit on add-in storage, which is so important. And the legislature in its infinite wisdom has not seen fit to pass that bill over the past four years of trying. Maybe in the fifth year, maybe something will happen. How do you feel about that bill? Isn't that it bill goes beyond just incentivizing for installers like your company, SolarTech Hawaii LLC, but for the whole state, for everyone, it seems to me, if we're gonna reach our goals, we have to do that. What's your view on it, Roland? Yeah, I totally agree. And there are two conversations when it comes to that legislation, one's at the federal level, one's at the state level. And it's worth noting that they obviously are two different conversations of two different legislative bodies. The tax credits are in place at the state level. The fact that we don't hear any rumors of them going anywhere, like the federal level is scheduled to go down. And it started that step down here in 2020. And at the state level, we don't hear any rumblings of that ever going away. That's great, that's excellent. I do, though, of course, agree with you being in the industry that more would be better. Especially here at the state level where we have some critical of that. Now at the federal level, as I understand it, and this is just pretty recent news, the budget that was signed by the White House, despite lobbying by our industry, our trade industry, for wrapping in storage with PV and extending the PV credits that are already in place, that has all not been signed into legislation, as I understand at the White House in this current budget. Wind power incentives were added in there. And I'm not in that industry, so I can't speak to the specifics of that, but as I understand it from my reading, wind power was added in there, but solar PV currently is going to, tax incentives are going to step down to zero. This year is 26%, next year 21%. That's in 2021, and then going to zero, as I understand it, with no extensions currently signed into law. That's at the federal level. And that, of course, it's terrible, really. I mean, there's no self-selling it from my perspective. Obviously I'm in the industry, so it would make some sense that I wouldn't have some bias towards that. But I'm talking to customers all the time as consumers. And so I feel that I empathize at their dining room table as a consumer, right? That I want to pencil out this investment. This is a 25, 30-year investment. I want to see it pencil out. I want to see it have a direct impact on my utility bill. And I want to see this and become an asset for my house. I don't need to make money on this. I'm not building equity like in buying a home. We hope to build equity and have this thing be a phenomenal asset. But we do want to see a direct return on investment. And those tax incentives are a key part to making that happen. So yeah, we'd like to see that happen specifically with storage wrapped in as a tax incentive in and of itself. Because as you know, Jay, we have a pretty solid history here in the state with PV adoption through the different phases, right? When the NEM program first came out with ECO, it was wildly accepted, really. I mean, it was fantastic, the number of consumers, both private and commercial, that adopted it. All of those customers had no batteries, right? And so at some point in time, they may all want to be considering adding batteries to an existing PV system without adding PV panels. And it would seem to me that it would make sense for the state in meeting those targets that those incentives would help make that happen. Because we can then offset that usage. I'm sorry, production of PV to be used in the evenings. Without that, yeah, we're really gonna be back as consumers drawing from the grid. And then it's a matter of, where did that, did we do massive battery systems at the grid level? We see massive PV systems being put out there, but massive storage is a slightly different piece. So I think we need to be incentivizing private, home owners to add PV storage, right? To their systems that are currently producing. Yeah, the nature of an incentive doesn't have to make anybody rich particularly. It only has to tip the scale. It has to reach the tipping point where it changes consumers' sentiment in a way that we all want. And so it doesn't have to be huge, but it has to be a sort of governmental nod, an expression of governmental policy. Yes, we think this is good. Yes, we will be able to reach our goals this way. So get on the bandwagon, and just to show you how sincere we are, we're gonna give you this incentive. And I think you have to tune that. Going forward, you have to think about a sunset, but maybe not right away. Sometimes the legislature thinks of a sunset the minute they adopt the incentive and then everybody says, oh, they're not serious. They don't really mean it. This is gonna go away so quickly. I saw that happen in the technology tax credit back in the early years of the century. Anyway, this all raises the question of the relationship of the solar installer companies like yours and the solar installer industry and trade associations with the utility and the utilities, I say the utility, I mean all the utilities, both utilities in their efforts to build solar, community solar, large scale utility level solar, and they can go out and with the approval of the PUC, they can organize huge solar facilities. And that has to have an effect on you because it means that some people who might be incentivized to put solar in their rooms won't because the utility will have its own solar and that's clean energy and why should I worry about my own roof? And I was telling you before that Marco Mangelsdorf, one of our other guests on these energy shows, keeps track of how much solar is being installed. Right now, we're on an upswing. Last few months for reasons I don't fully understand, we're on an upswing, there's more solar being installed. But query in the long term, how do you see this playing out? And do you see companies like SolarTech, Hawaii, LLC, being on the bandwagon for larger installations for hundreds of megawatts, that will have an effect on the larger picture rather than the individual single family residents? Yeah, yeah, good series of questions there again, Jay. You know, we're a proponent of local company, right? Local contractors, that's who we are. We feed our families. We put our kids in our local schools. We are local people. We feed back into the local economy. And so, yeah, we're huge proponents of promoting local contractors getting access to bidding and on large and small projects, presuming, of course, that the contractor has the capacity to do so. And so, yeah, that's the answer to that question. How we see it impacting individual homeowners is interesting. I'll offer my perspective, and others might have different perspectives. My perspective on that is, one, I applaud the big solar farms. The big one, Milani just went online here recently. Fantastic, years in the building. We've got others up on the North Shore. Really, for our overall state goals, right? I applaud it, 100%. Does it take food off our table as a small local contractor? Well, I haven't seen, unless I missed it, I haven't seen the per kilowatt rate on a consumer's bill go down just yet. And if you wanna know the truth of the matter, I don't expect it will. Now, I'd love to be wrong on that. I'd love for one day to come home, open up my own bill and go, wow. I'm only worth 17 cents per kilowatt hour. What is the last one that? But honestly, I don't expect that to happen despite the fact that clearly, the cost for producing power with a kilowatt is so much less than on those diesel-generating plants. Very interesting world, very interesting. It's a very interesting perspective. Yeah, I mean, I would love to see somehow that savings get passed on. And I don't say that in a way to be disparaging towards our utility. Our utility is a partner of ours, right? They really are. And we may love aspects of them. We may dislike aspects of them. That's true about any large organization, right? But the reality is, I don't suspect. I mean, somebody please prove me wrong. I don't suspect that our per kilowatt rate on our bills be a commercial account or a residential one are gonna go down anytime soon. In which case, the incentive is still there for me as a homeowner to get my bill down. And PV is really the best way to do that. In solar hot water, obviously. So solar hot water. Thanks, Roland Graham. Solar Tech Hawaii LLC, our neighbor here at Finance Factors Center. So much appreciate your patience in starting the show and your knowledge ability. We really appreciate that. And thank you for joining us today. I hope we can do it again. Thanks, Jay. We really appreciate the time. Glad to join the show and best to you guys in the show as you guys continue to grow it. Aloha.