 Okay, Malama, that's the magic word, the Malama solar success story. Okay, we're going to hear from one of the founders, Rachel Asu. Hi, Rachel. Thank you for joining our show today. Thank you. It's a pleasure to be here. So this is Energy 808, The Cutting Edge, and Marco is on travel. Marco Mangelsdorf is on travel, so we want to talk to you about your company. You know, there's a lot of installers in the state. Some of them make a lot of money, I must say. Some of them don't. And then they're always faced with the competition of the do's and the don'ts. And they're faced with the competition of the guys who come, the big guys who come from the mainland. And so a couple of years ago, you decided to take a jump into this frothing pond of competitive commercial activity in a high-tech industry. And I want to know why. Well, that's a great question. It's been quite the journey. There's a lot of reasons of why my husband and I decided to start the company. And a lot of it was just I actually wasn't in the path of solar. I initially just wanted to be a professor. So I loved learning. I love teaching. And that was kind of the path that I wanted to take. My husband's really great at sales, so he was in sales and would travel a lot over the summers. He started selling solar after we got married. And I really loved that because solar, I've always been really passionate about sustainable energy. You know, I was born and raised here on the island. And the island being the big island. The island of Oahu. Oh, Oahu then. Okay, good, good, good. Yes, we're on Oahu. So and I've just, you know, it's really ingrained into our culture that our resources are very limited. And so when we started down the path of solar, it was just pretty interesting because there are a lot of solar companies out here. But there aren't as many who were as concerns about the experience. And I think that there were a lot of solar companies that were kind of, at least in our experience of who he's worked with, didn't care so much about the customer as much as the sale. And so that was something that we wanted to change. How have you changed that? Yeah, so it came from a couple of bad experiences with previous companies that he was with. And there were just different things that the customer wasn't informed about in the process. There were times where things weren't going the way they should have, and the customer didn't get the attention they needed. And so what we've done is we've developed a very tedious process where we're always constantly checking in with a customer. And that's ultimately what we built the company on Malama, because Malama means to care for. And so that's caring for the customer, the community, our employees, everything around. And I think that's what's been so magnetic about it is that everybody can see that and it draws people in. Yeah, we just had a show about that a couple hours ago about how the commercial world has changed to gathering data on people rather than treating them as individuals and customers. They have become in large part digital rather than people. And so I'm really happy to hear you say that. I think it's very important for any business now, especially a business that wants to make an impression on new customers. So okay, but it's a technical business. It's a business where you really have to know the latest and greatest technology and method of installation and connection. You have to know the rules, the regs, getting permits and permissions from the utility company. Oh gee, it's enough to give you a headache. So who's in charge of that, Rachel? Is it you? So I handle all of the operations. My husband handles a lot of the sales and a lot of partnerships. Fortunately here in Hawaii, if you make a good name for yourself, everybody knows each other. And so it's just a very strong network. So yeah, we've all kind of worked together closely. We have a lot of great leadership with our company and we all collaborate regularly on a weekly basis to look at certain inefficiencies and try to brainstorm and plan ahead. Can you ever talk to your competitors and ask them questions because, you know, it is the land of Aloha and it happens in various industries and sectors where you can pick up the phone and get some advice from a guy who would like to compete with you. Do you have that experience? We have not spoken directly to our competitors, but we do have a lot of people who come over from our competitors' companies over to our business just because they see the benefit in working with us. So we have a lot of sales reps who have come over just because of the experience that they've had at other places and the experience that their customers have had. Oh, interesting. So they jumped ship to join you. I like the sound of that. Yeah, we've been really fortunate. What do you offer them that attracts them? Ultimately, it's the whole package. We like to say that we have some of the best sales forces on the island. The process is constantly, our operations are constantly being worked on and improved. I mean, on a daily basis, we're constantly meeting about it. Our installers, that they know, you know, it's always quality over quantity. And Chris and I, we are very much so involved in every step of the process. So we're not the type of owners who's just going to kind of sit back and everybody knows what they should do and just kind of leave it at that. We're very much so in the trenches and involved in the process. And I think that that overall gives everybody who works within the company a better experience. Oh, yeah. So you have sales reps. And then you have installers too. So how big is the company in terms of sales reps and installers? So we have two installation crews. And then we have our sales team is about 20 to 30 people. Oh, wow. A big question, Rachel, big question is, you know, you started before, not too long before, but before COVID ever happened. And then one day in January 2020, we were in a new world. And we didn't realize that at first, maybe we were fed misinformation to think that it wasn't going to affect our lives. But we found out soon enough that it was going to affect everything, including mom and pop businesses like you guys. And so how has it affected you over the past two years in which you've been operating in COVID? Yeah, that's a great question. That's the question that we get asked a lot because a lot of businesses struggle at the hit of when COVID first hit. And we were not exempt from that. We definitely did struggle initially. And Chris and I, you know, at the beginning of COVID, we had one employee. It was just myself, Chris, and one, one other employee. And we knew that it was either sink or swim. So we had to learn how to adapt and to fit in with the time. So we started working on virtual sales so that we could still have business coming through. Try to, you know, really dig in about what we can do to make the installations safe for both the customer and the installers. And it definitely took a few months of kind of getting our traction and figuring out how to work through it. But yeah, we were, we were able to fortunately pull through that. And and because we were able to do that, we've seen phenomenal growth within the past couple of years. I think that's right. Well, that is so interesting. Can you, I mean, I know you said that you found better ways to do things, that you found better ways to engage with clientele and prospects. But what can you give me more about that? What is it that makes people want to do solar in the middle of a pandemic? What is it? I think that a lot of people were just, most people when they know that solar is a good thing, right? So they know that they want solar. They know that in the Hawaii market, it's especially great. But I think that it was more so they didn't have the time to sit down. And it's an investment initially. And so a lot of people, you know, were concerned about that. They had a lot of unanswered questions. And I think that when they were able to take the time to be able to sit down and learn more and find out that it's not a big of an investment initially, that it can essentially just swap out to their utility bill with their solar bill, that they got the bigger, full picture of what was going on. So is there, you think, a relationship between the attention and the press and in the world on climate change and the interest of people here in Hawaii to install solar? Sorry, could you repeat that? Well, we have a lot of press lately about climate change. And we had, you know, in Scotland, in Glasgow, we had this big COP26 meeting. And it was in the newspapers for, I don't know, weeks. And everybody talking about climate change and what we need to do about it. And I just wonder if you saw an increase in interest here in Hawaii because of all the press that climate change has gotten? Yes, absolutely. I mean, I feel like Hawaii has always been a very special market. I feel like people all over the world are very concerned about the environment, but especially so here in Hawaii, because we have such a fragile ecosystem. And we heavily, we're in the middle of the Pacific Ocean, right? So if we really need to protect our natural resources because otherwise, we're relying on all of them to be shipped to us and shipping isn't always the most reliable option. And I think that there have been definitely some steps moving towards solving that problem. Do I think that we've been all in in ensuring that we're going more the sustainable path? I think that we could do more. So no, I don't think we've fully committed to that. But I definitely think it's really important. And I think there's a lot more that can be done to take that in that direction. I totally agree with you. You have any thoughts about what that extra step would be? Is it legislative? Is it regulatory? What is it? You know, just in our experience in the solar industry, we've seen a lot of bottlenecks in certain areas. A part of it is with getting the proper approvals that we need, whether it be from the utility or from HOA, you know, HOA is a lot of times meet in person and with meeting in person. What's an HOA? What is that? HOA is a homeowners association. So we need their approval. So there's been some bottlenecks there. Primarily in our state, the huge bottleneck has been with permitting. And so I think that, you know, there's a lot of things that the state and the city can do to kind of standardize the processes so that we can get these things installed a lot faster. Because it's not a matter of the company's not wanting to do it, right? It's not a matter of the customers because everybody wants to get solar. It's more so a matter of the different hoops that need to be jumped through in order to get it installed on your roof. And so I think that if everybody could get together and just collaborate, all get on the same page of what's expected, how to get certain things installed, how to accomplish the goals that we want to accomplish, it would help to significantly increase and expedite the process of moving to a more sustainable lifestyle. Yeah, I hear an echo of what you were saying in the first place. That you meet with your staff, you invent new systems, you improve old ones, you make everything more efficient all the time every day. And so I think what you're saying is you, and I would say the same thing, by the way, Rachel, that you want government to do the same thing. You want government systems to be more efficient, more expeditious every day, not just we doing it this way because we always did it. We always did it this way, and if it's slow, too bad for you. Yeah, exactly. And clear communication, I think, goes along with that. A lot of times we are very particular about, okay, what is expected, this is what we submit, and then they'll change certain requirements or certain policies, and the communication is not clear on that. And so then we get that package rejected and we have to resubmit the revisions for the new requirements, and that holds up the process by several months. And so I think clear communication all around them hearing out some of the challenges from other companies that have, you know, that they work with or that applies for certain approvals, and then just all kind of collaborating together to figure out how they can still get what they need, the information that they need, but we can help to expedite and get more people set up with same energy. So when you're talking either virtually or in person with a prospect, a prospective client, what do you tell them to sell them on this? I mean, for example, if you were talking to me the day of the rainstorm a week ago, I would say, oh, yeah, I really need to get solar because all this blackout all over town, predictably, predictably blackout all over town. So I would say a solar I can save the trouble, I can not have that risk. But there's other things too. So what do you pitch to a brand new customer or prospective customer in terms of why he or she should get solar on a rooftop on a, you know, on a single family residence? Yeah. Well, majority of our installations, I would say probably about 98% of them, if not 100% of them are battery installations. So one thing that's really attractive is that we are installing batteries with every single system. So if the power goes out, they still have that power, right? And in addition to that, the power that they are receiving today is going to be at a locked in rate. And so essentially, instead of getting their power from the utility, they're getting their power from the sun. And then once, you know, as they continue to pay off their loan, instead of paying the utility, they're paying their solar loan. And that's a locked in rate. So they're always going to be paying the same amount for the term of their, for the term of their loan. Whereas if they were to be with the utility and getting their power from the utility, those rates are constantly increasing, especially as unsustainable, you know, fuel and those prices rise. Yeah, yeah, that's right. And so you could really be hit, not always, but sometimes. Okay, the other thing is, when you talk to them, you know, you have to wrap around the the notion of, of how long it's going to take to do this. You know, if I come to you, I really want to know, and I don't know, I don't have any, you know, period of time in my mind, I'll go with the flow on it. But I really want to know in general, how long it's going to take for the permitting, utility permissions and connections and all that, and the construction and installation or the connection, how long is it going to take? What do you, what do you tell them about that? Because as you said before, it's not entirely predictable. Right. It's not entirely predictable, but there are definitely some timelines that can be roughly predicted. HECO came out with a great program called Quick Connect, which essentially gives them almost instantaneous approval from the utility to get installed. So that's been great. As far as the approvals are concerned, the HECO approval has significantly increased their timelines. But unfortunately, if they're in a homeowners association, those are still the same. So if they don't have a homeowners association, they can get from the time they sign the contract to installation within less than a month with our process. And that's considering that we can get their permit online. If their permit is in a different zone, and that's where it really starts to bottleneck is with the permitting, if we have to specially walk in the permit. Those permits initially, pre-COVID, they would take about one to two months. But more recently, it's been take, it's behind, they've been backlogged by 13 weeks. And so it's been taking a significantly longer time, more recently. That's three months plus. Ooh. Right. Do they tell you why? Is it, they don't have staff or what? What slowed them down? I think that it was probably a combination of several things. One thing is they are short staffed, I think. In addition to that though, and I think probably this is the bigger driving factor. I don't want to shoot myself in the foot here, but I think that there could be a smoother system. I know that with a lot of the permits that take a long time, you walk in and you put the permit package that you've prepared and worked so hard on just in a pile. And then kind of hope they get to it. But there's no real tracking system of where the permit is, no assurance that the permit has been received and that it hasn't been lost. And so it's kind of an inefficient system that I think is a little dated. And so I think that there's a lot that can be done to help to digitalize the submission so that there's a timestamp on everything. And then you'll be able to easily track to ensure that it's been received and track the progress of the permit. I think that it would just help to make things easier for the contractors. And it could also easily help them in tracking a lot of the things that they're reviewing. Honestly, that's not rocket science. If I order a keyboard from Amazon, first I get an email saying confirming that I ordered it. Then I get an email saying when they think it's going to ship. And then I get an email saying it has shipped. And then I get a tracking number and I can track it every step along the way. And then, of course, I get delivery usually exactly the day they predicted and promised me. And then I get an email telling me that it was delivered. So all together, half a dozen emails and emails are so easy to send. It's all automated now. So I think you and I should get together and go down there and consult with them and show them. Sounds good. So Rachel, you talked about love too. Right. You talked about financing arrangements and loans and the like. What do you offer? What is popular among prospects and clients these days in terms of financing a system that will cost, I don't know, 30, 40,000? I'm not sure what an average system costs these days. But what do you offer them in terms of deferring the cost on a loan or installment contract basis or whatever? Yeah. So there's actually a bunch of different payment options that are out there. There are some. We work with a bank who doesn't require any payments to be made for the first 18 months. And that's a loan. We have both lease and loan options. Some of them have really great APRs. So there's a 0% APR option. There's a bunch of different options that we have available. And it's really just based on what the customer thinks is best. What's most important to them that they just paid off quickly in a short amount of time? What's in their best interest for their tax credit? Because if they don't have a lot of tax liability, then it's better for them to possibly lease than it is to get a loan because they won't see those tax credits. So there's a bunch of different things that play into what types of financing they select. And we have a variety of options to help them to decide what would be best for their particular situation. Okay. People challenge these days in terms of paying for it. A lot of people find themselves strapped. They can't buy the things they want to buy for one reason or another. But COVID is always sort of in the mix. Do you find that is a challenge for you when somebody goes south on payments? We don't see that as an option. I mean, not sorry, not as an option, but as an issue. And the reason why is because it's not the same as buying a car or other things that you want. You're going to buy energy regardless. And so if you're paying your utility bill, it's basically just stopping those payments over to your solar bill. And so we don't see so much of an issue of customers saying that they won't be able to afford it. Because once they understand that it's not in addition to their utility bill, it's just kind of substituting it out and stopping it out and paying a different source for your energy. And once they understand that, then it's not so much of an issue. You know, one thing is, you know, we are in climate change and the weather is going to get worse. It's not a question of, this is a pun, it's not a question of whether W-E-A-T-H-E-R. But when? That's pretty funny. So the question is, what do you say to them when they ask you, is this going to hold? If we get a windstorm or bad rainstorm, whatever, extreme weather or some kind, is this going to hold or am I going to lose the whole enchilada when the weather sweeps over my house? Well, we do warrant the actual inflation of the equipment. Now, if the roof ends up blowing away, then you're going to lose the panels that are attached to the roof, unfortunately. That's not something that we can really control. But prior to installing any system, we do a very comprehensive site survey. And we ensure that the home is first suitable for solar installation and that it's going to last the life of the system. So we inspect the roof and the structure and all of the electrical. And as long as all of those boxes check off, then everything should be good to go. And if they don't, then a lot of times, depending on what the issue is, we'll help to work with them. If it's electrical issues, we'll help to work with them to get those things resolved so that they can still go ahead and get solar installed. So what would you say your biggest challenge has been over the past couple of years you've operated this business? What's the part that wakes you up at three in the morning? I know things wake me up at three in the morning. I figure they must wake you up at three in the morning, too. Oh, yeah. Or it keeps me up till three in the morning. I think it's kind of twofold. One of them is just with process with permitting. I'm a very process driven type person. So I would love to just have a standardized process and clear communication with permit. We've already kind of talked about that and some things that could be improved there. The other thing is just hiring. It's really hard to find really great qualified people that we want to join our team. We're constantly hiring. We have about one new hire every single week. And so we're constantly hiring, constantly training. And I think that with just the growth we've seen, we always want to make sure that we never have bottlenecks. And so we're constantly working on, okay, what part of the process needs more manpower and then hiring and training and perfecting. And fortunately, with a bunch of different eyes on things, they're able to identify small little inefficiencies that help to make things better overall. So. Good. Okay. Well, that's the right approach. I didn't forget that you said that you were thinking of teaching at the beginning. So I'm thinking I want to know what you were going to teach. I want to know what kind of graduate degrees you have that would qualify you to teach. And I would like to know how that all connects with running this business. Yeah. I love I'm a very strong advocate for higher education. And I got my graduate degree in communicology. It's the study of interpersonal communication. And I think that I have used a lot of those skills that I learned in the business, but more so than the actual content, I've actually used a lot of the work ethic skills that I've learned when I was working on getting my graduate degree, and have been able to apply those that work ethic and organizational skills that I needed for that to the business. So I think that that's helped to contribute a lot. We're super excited. We are going to be hopefully giving back to the community really in the next upcoming year. And that'll provide me another opportunity to be able to help to educate and teach members and communicate in the community about a bunch of different sustainability options out there. Oh, you mean when COVID is over? Yeah. When COVID is over, it's due in February of 2022. So in March first, no, but yeah, we've been wanting to do big sustainability events for the community just to talk about different options of farming and just all sorts of sustainability lifestyles, not just solar. So we're excited that now that things are starting to open up in the state, we'll hopefully be able to do that next year. Yeah, not good. I hope we can connect at that time so we can do a show about your event. That would be great to do that. So there's one other thing I want to go into before we run out of time, Rachel. It's this, as you guys, you and your husband, kudos to you for jumping in, starting a business, making the investment, investing the time and the risk and learning all the things you have to learn to start a small business. Kudos to you. It's admirable, honestly, and that's what we need in this state. But I want to know what you recommend to people who might consider the same kind of thing, because you are an exception to the rule. A lot of people, your age, disposition, background training would not do this, but you decided to do it, take the risk. And I guess I like to know, I like to hear you talk to them and tell them it's okay. Tell them this is what we need to do to make Hawaii work for future generations. I like you to tell them now. Yeah, I think that it's always tempting, and I think that one of the biggest things that might impact some companies is that they're so focused on just the growth. And I think that one thing that we've really tried to do is grow at a reasonable rate for us that we can sustain. So we didn't want to just bring in a bunch of customers that we wouldn't be able to allow to have the same experience that a customer, if we just had one customer, would have. So we've always tried to grow at a reasonable rate where every single account is going to have the same attention and detail as it would if we were just a really, really small company with just a handful of customers. And so I think that I would share that same message is, it's always going to be tempting to just run head first straight in, but you really want to work on setting up the foundation first so that you have the support in order to accommodate the type of growth that you want to achieve. Tell them why they should do this. They could always get a job at McDonald's. I'm not sure they can, by the way. That's the thing. A lot of people are in a state, if you will, in a tizzy about quitting their jobs or getting a new job, or for that matter, starting a business. I mean, the people are in transition and COVID has done that for us, including in Hawaii. So what's your advice on that? About transitioning into new positions. Transitioning into new businesses. Oh, new people starting new businesses? Yeah. I mean, it's, I would think, okay, plan it out first and then multiply that work times 10. We definitely didn't anticipate having all of the work that came along with the business, but we were happy to do it and very eager to continue on. But there's definitely going to be times where you're just going to want to say, okay, no, I need sleep tonight. So I would just, I think it's great. I think that people starting new businesses is a great thing, especially in this economy. We need that, but I think that educating yourself before taking that step is always going to be beneficial, because the last thing you want to do is start something and then invest a lot of money into it and then realize that you would rather not be the entrepreneur and you rather just work your way up and work for a company and not deal with the headaches once you've got home from work. Okay, let's talk finally about Malama itself and what's the plan? Maybe you have an exit strategy. Maybe you want to sell or merge or move or expand. Who knows what, all islands, all neighborhoods, maybe. Do you have a plan or at least you have a vague plan about where you want to go and how you're going to become a multimillionaire soon? Yes, we definitely have a very specific plan, actually. So our goal for this year was to be one of the top 10 PV solar providers in the state and to expand out to Big Island. So we expanded out to Big Island in August. Our goal for next year is to expand out to Maui for 2022 and then for 2023, we plan to expand out to the mainland. So fortunately for us in the solar industry, Hawaii is one of the leaders in the market or in the industry for solar PV and a lot of customers here are doing solar installations with batteries and the mainland, they will slowly start to, the other states will start to catch on and start to do solar installations with batteries. But a lot of times in most states they're still doing the net metering program. So I think it's just a matter of time. Usually things start here in Hawaii and then start to trickle to the other states. So I think that that really gives us a competitive advantage to be able to in a couple of years expand out to the states and then we'll just be the solar PV battery installer leader, the expert in that state. Would you ever consider a merger or acquisition either upstream or downstream? What I mean is either to be acquired, to merge into a larger company or to acquire and merge with a smaller, would you ever consider that? Possibly to acquire, but we're not really looking into any of the other options to be acquired just because we want to, and I mean I can't speak for what it would be 10 years on the road, but our main concern is maintaining the integrity of our process and our responsibility and duty to the other people, to all of our customers and everyone here that we serve on this island. So I think that in order to really maintain that integrity, we do need to be in control and be able to control the process. So yeah. Right on, right on, 100%, right on. You know, you remind me of Josh Powell, he's the CEO of Revolution. A lot of the things that he says are like the things that you say. For that matter, Rachel, you remind me of Marco Mangoldstor. So these are people to observe and maybe learn from. Thank you so much for coming up to our show, coming on our show, Rachel. Thank you very much and I wish you all the best, not only for the holiday season, but in business next year. Your plans should all work out, Rachel. I'm telling you this will happen. Thank you so much. Thank you. Thank you. Aloha.