¶ Solar Industry
So we're here today with Rami Fedder , rami's with Solar Juice for many , many years . He's really an institution solar , because you probably start in solar much earlier than many , many others and to start us and get us the right energy , we have a bit of ritual here . Can you please touch my ball ?
Both or just one .
Just that one . Yeah , you see now that it gets us the right energy level . To be very frank , you're not striking me as a typical solar guy . You know you're not walking around in moccasins and around Newtown etc . You're from Granville , you're from the Western suburbs . Solar is a bit trendy still . So how the hell did you get into solar ?
Well , it started back in high school .
I lived in Villawood and there was a solar plant located in Villawood called Solar X . So back in 94 , I think I was in year 10 , there was a few other guys that actually worked in the factory and yeah , they're saying quite happy there . You know they were excited that they were working in solar . As I said I was only probably 14 , 15 .
And we're in for an interview and the plant manager said you're too young , you need to finish your studies , you need to get a job , you need to finish your studies , then I might consider you a role . So yeah , so fast forward , finished year 12 , got my HSC picked up . The HSC walked straight to the facility the next day .
The next day I actually met one of the same receptionists there who I first walked in . Her name was Margaret Halsey . And yeah , I said I'm here to see the plant manager , I've got my HSC , I'm ready to work . Had the interview with him and he said okay , I've got a job for you , but it's as a process worker .
So I was really keen to get my foot in the door , continuing my studies full time as well , at the same time as an accountant or accounting course , which was really really tough , working night shift in the solar factory and studying during the day with their accountancy course .
After two years there was a merger between SolarX and BP Solar and then , when the merger happened , we moved over to Olympic Park . It was the largest solar cell factory in the world .
No , nigel Sethsa too , it was about 40 to 50 megawatts .
50 megawatts of solar cells . The panel factory was actually quite small , I think it was close to 12 megawatts , probably peaked when I was there . It was because the cells in Sydney that we were manufacturing was also shipped to the other facilities around the world for BP .
So we're shipping cells to Spain , us , india , even Saudi Arabia , and that was my role was to control that . At the same time was also sourcing the key raw materials as well .
So basically , australia at that point in time was manufacturing cells , exporting and earning export income from the manufacturing and your role was to make sure it goes all around the world .
Traditionally BP was manufacturing the wafers in house , the solar cells in house and panels . So this special task force team was putting place when the demand that BP had at the time , bp Solar had , we weren't able to produce in-house so we had to source these key raw materials externally . So we're talking what year ?
This was probably 2003 , when the shortages first started to happen . So 2003, .
Australia's boom hasn't started yet . We really , I think , installing less than three to four megawatt a year , which is like what a Sydney suburb sometimes installs in a couple of weeks now , and I think Telstra was one of the largest users of solar panels at the time for their mobile network .
Correct , and it was mainly off-grid that really the panels went to , isn't it ? In Australia , I mean , the off-grid market was usually bigger than the residential at that point in time , because what was the price point per watt ?
It was anywhere probably close to $5 a watt US . Right right USD .
And where are we sitting now ?
Under 25 cents USD .
So it's a 40 times reduction . I don't know what that is 4,000 percent or something like that and without that we wouldn't have a solar boom , would we ?
No , no , as you mentioned earlier , the grid connect market was virtually non-existent .
So there's BP Solar . It's going nicely , you're the biggest supplier in Australia , you're distributing , you've got a dealer network . It's 2006 , something like that and then , a couple of years later , suddenly BP Solar decides to pull the plug . How did that , I mean ? Did you have a feeling that was coming ?
Well , I resigned in 2007 , actually , and that's when the Royal METURA price was just peaking . I think it peaked at $2,900 per kilo for polysilicon Wow , where today you can pick it up under $20 . I identified an opportunity where I could go out on my own , and it was a big risk . Everyone thought it was crazy .
I was one of the few guys here who ever resigned from BP . Usually people wait , stick around for their redundancy . Somehow I got myself in a position where I was supplying manufacturers out of China . So it wasn't , I wasn't sourcing from China , I was actually supplying all these new facilities . One of them was even Longji .
At one stage I was the largest supplier .
And where did you get it from in the first place ? From other parts in China .
No , no . So all the stuff I was sourcing was from Europe and the US , so I would bring it back into Australia , repackage it and re-export it . I was actually air freighting many tons of material , so the air freight bill was massive . But because the raw material price was just going to just move so out of control , the margins were quite large .
So I was happy to forego some of that with freight , instead of throwing it on the boat . I wanted to turn it around very , very quick .
So , if I get this right , at one stage China was relatively small in solar panels . They got the material from Europe . You were the middle man and you actually exported to China from Australia material for solar panels , correct . So it's kind of totally on its head now , china towers over the rest of the countries .
One example is solar wafers 97% . Yeah , come out of China .
So I mean I was with Suntech in the early days and that was Dr Xi , who actually was working in Australia too , at the University of New South Wales , and they took that knowledge and that research and started the first large factory in China .
But that must be the big change that you've seen in the industry , because you have been in contact with China literally from day one and you must have a lot of contacts . I know you're traveling all the time and a few days you off again to China .
You have a possibly a very unique perspective on the whole China picture because you have been there right from the start with the solar journey . What has changed ? How's it all happening
¶ Solar Industry Growth in China
?
The trade show SNEC . I went to the very first one . I think it was back in 2005 . Was that a hotel , two levels ? Now , I had dinner with one of the actual founder of SNEC . I asked the question . I said so did Xi . How many halls do you expect ? 26 . So 26, ?
you know these all energy halls that we go to sorry these Melbourne exhibition halls that we attend and all energy and it's , I think , takes up one or two halls . This is like 20 plus and these are all massive halls just full of solar companies . So , that's a good way to see the growth .
Is that because the Chinese government recognised renewables as a industry of the future and very actively pursued that industry and supported it , and now they're really dominating the world because they can supply in the largest number , meaning at the lowest price ? Is that what happened ?
I've actually witnessed , where companies receive the whole infrastructure , like the building here's your building . Do what you want with it in terms of solar . So they do have advantage in terms of capital costs in setting up a solar facility and , as you mentioned , what helps greatly as well is there's a massive local market in China for solar .
But you would have seen a very different attitude of the very early startups in solar when you would have went there and they were still working out how they can get into Europe and how they can grow the business in Australia , to now where the European panel manufacturers are basically just either not around or in such smaller volume that the competition is very ,
very difficult .
When I first joined SolarX they were manually tabbing the cells , stringing the cells where I would put it together , put it in an oven , then cut off the offcuts , or manually , when now it's all very automatic .
And in China , if you visit any of the factories now it's as high tech as a factory in Korea , a factory in the US , a factory in Germany , if anything . Now people are . I mean , I've been to some facilities in the US where the equipment's from China , the manufacturing equipment , but in the olden days they used to solder it by hand .
So I remember the rows of mainly women sitting there , long rows and rows and rows , and they're all sitting there all day , soldering , soldering , soldering . And that was the early days of the industry , and there's nobody who produces still like that is there .
No , no , everyone's moved into robotic machines Slowly automatic . Yeah yeah , companies from Europe and the US , even Australia , could charge a premium because they had a premium product right . The efficiency was higher .
But now it's quite tough where China's leading , in some cases , the race in terms of efficiency , especially with the standard P type or even the Topcon technology , where they're ahead of the curve in terms of efficiency .
On a regular P type and the Topcon , the big Chinese players are winning , and so it's very hard to claim to be a more premium product when , in terms of on paper , the numbers , the numbers , efficiencies , temperature performance , etc .
You're actually behind . And that technology a lot of it was researched here in Australia , wasn't it Correct ? So we actually sold that technology , usually from the University of New South Wales , overseas Leasing sold .
I'm not quite sure , but yeah , I mean , I even posted something to social media recently where I was sort of scratching my head trying to understand . You know , majority of the technology used around the arm that's being produced at the moment originated from Australia , but nothing's a very small fraction is actually made in Australia .
So , Teddy , agree on that Interesting .
So you've seen the journey . The residential solar when did that actually pick up and how did you take advantage of that Actually ?
received a call from Andrew Burgess in . I think it was around 2008 . He said oh , you know , there's a really good opportunity now in Australia With this . I think it was like an $8,000 rebate . I can't remember . I think it was for one kilowatt system and I was saying , no , that sounds too difficult .
It's a lot easier just shifting tons of material from one part of the world to the other . Oh , that's too much work . You have to try to sell systems , or yeah , because I think at that time Andrew was working for Carnegie but BP was still around .
And Carnegie was one of the largest distributors coming from Germany and they had a distribution business here in Australia and Andrew was one of their sales guys . So he saw distribution , so he knew distribution , you knew sales and procurement and so somehow you could see an opportunity .
Yeah . So he was pushing me to yeah , let's do something together and I was like , nah , that's too difficult . Then , all of a sudden , the supply demand for raw material went the other way and you know prices where I mentioned earlier , they moved to $500 a kilo , crashed .
Then , at the same time Andrew was mentioned there's another huge subsidy I think it was a new subfold 60 cent feeding tariff . This is a time there's this $8000 thing happening and that's when I didn't really understand it back then .
And then there's a 60 cent feeding tariff now for new subfolds which basically meant a system payback went from 12 years down to five or six years and if you bought the right big system , even maybe down to four years if the system was cheap enough . So that was a complete game changer and that's when the residential solar took off .
The person that we have to thank for that Do you actually know who that is ?
No .
John Howard . Oh really , John Howard is the solar king . He started the $8,000 rebate to re-secure his re-election and suddenly solar people were actually very valuable voters .
But in terms of the 60 cent .
That was Joe Tripodi , and they deliberately made it so high because they knew they would lose the election and they thought , well , the others have to take it off again and get everybody upset . So it was a very political ploy to make it so high , which was really unsustainable , because they were already on the nose .
They thought we might not win , and then the liberals have to drag it back down and everybody will hate them for that .
So I reached out to an old school friend which I ran into , which was Harry Charmy .
The industry knows , harry .
Yes , I randomly ran into him at a local shop because I grew up in Villarud , I never moved too far away . I was staying in that western suburbs area and Harry was . I think it was at Regions Park , and it was like have you heard of carbon footprint ?
He was talking about carbon neutral and it was just like because , as you know Harry , whatever he's into , if he enjoys it , he becomes overly obsessive . Right , he's like , oh , you have to get your company carbon neutral . I go . It's only myself , I mean . I said , what do you think about solar ? He goes oh , because it was all about the environment .
Right , and yeah , he goes . Yeah , yeah , I'm up for that . So I said , look well , it could be possibly setting up the company soon . So Harry was actually employee number one . He actually started before Andrew . Wow , right , in terms of hands on . Once we received the first two containers , there's actually Hyundai panels .
After Hyundai , we brought in Silux panels . So which was the only Australian manufacturer at the time which took over the BP facility ? Yeah , so we were the largest distributor for that product . So , thankfully for that 60 cent feeding tariff , the market obviously exploded . We went with that strategy of back then . Right , we wanted some sort of quality .
So that's why we went with Hyundai . Also , what sort of earned us a bit of credibility at that particular time was it was almost impossible to source SMA inverters globally that were oversold .
So I reached out to my European contacts and we managed to get our hands on a lot of SMA and I spoke to the local office and I said do you have any issues of bringing if I parallel import SMA from Germany ? We have no issue with that , but it's impossible . So good luck with that .
Next thing , you know , I'm bringing in , I'm flying in , I'm traveling planes from Germany . We're basically paying something like $600 per inverter because these were heavy , 6 kilowatt transformer inverter . They weighed like at least 70 kilos each . So we were efferenting those and that's what sort of .
We caught the eye of many of the installers and helped us and once they understood our background , they knew we were the real deal . We knew what we're doing and we quickly . I think that first year , first full year , we turned over .
I think it was $60 million On a first year basis for a new business . Now bringing all these big inverters from Europe and parallel importing the SMAs and bring them all in by air fright . They wouldn't have done much for the carbon footprint of the product . How did you feel about that ? You had to do what you had to do , was it ?
At that particular time we wanted to satisfy customer orders . Unfortunately , correct in saying that when you look at it that way , yeah , it wasn't helping .
I noticed also at that time , a lot of people brought whole containers from China in direct , so there was a 25 year warranty given but you really didn't know who you go to for that warranty Did . You had to compete with those guys .
Yes , but I think where the pain was first felt was inverters . I think that's why today we see people are not so price conscious when it comes to inverters .
Right now , I mean , and it's been the case for many years now , at least the last six years Fronius has been the most expensive inverter , the biggest selling Chinese inverter and actually the biggest selling inverter in Australia last year was Sungro and that's by far the most expensive inverter out of China .
Versus the majority of the other China brands it's close to probably 50% more expensive .
But because of the quality of that product , because of the local after service support , like Fronius as well , like SMA , sungro is still selling in volume because of those lessons learned in the early days In the early years was there ever a bit of a disaster with inverters or panels where there was quality issues .
¶ Issues With Inverter and Panel Quality
We copped it firsthand right . Because of that shortage , we were forced to look at inverters , unknown inverters out of China and Taiwan . A lot of these companies were unknown so we're trying to deal with companies who were diversified .
So PowerCom had a similar roots where it was a large UPS public listed company in Taiwan and their model was more OEM-ing inverters for other companies . So we thought it was a proven inverter at that time . So in terms of variety , they didn't provide any replacements , they only provided parts . On top of that , the failure rate was actually over 100% .
We replaced it and then it failed again . So we had some existing units that we had in stock . So when there was a failure we didn't have any in-house after service team . Powercom didn't have any presence , unfortunately . I mean , our focus is always the customer and we wanted to keep them happy , so we provided another . Powercom failed .
Another PowerCom failed , so we started replacing them with Samael . With Samael .
I believe that's another Chinese brand isn't it ?
Yeah , they were doing really well , but I believe they've changed their way in terms of after service . I brought in a European team and I just think it just imploded . They tried to bring in those processes and , for whatever reason , it just done a 180 and we quickly moved away from it .
But the failure rate for Samael we didn't have any sort of comparison versus your PowerComs , your K-stars .
And how soon when they were installed , did they actually suddenly fail .
This is where I'll go back to . When I heard third party stories , I was told with some of these brands . I think they're like JFI and- . Aerosharp and all those Sunny Roo , kl&e they all gone . People would take they all gone . They'd take three inverters to a job site Just in case , and their intention was to install one inverter .
They'll take three because there's a good chance that one will be dead on the rival right , so they did even fire up .
I heard one of the suppliers if you ordered a hundred , you always got a box . You got 120 on the pallet because there was a given failure rate in the brand new product . These were cowboy days .
It was because back then there wasn't a local office , right so to give you confidence or say , oh , if you have any warranty issues , you can do you can . We've provided some additional units but , yeah , we took a massive hit and that's why today we've evolved on purely just high-end quality products , especially on the inverter side .
It's nothing , but I mean , the cheapest inverter we have is Sungro and , as I mentioned earlier , that's the most extensive Chinese inverter . So we carry Sungro , we carry Enphase , phronius , sma all these brands are definitely on the high-end side .
With panels , that's a whole different ball game where it's come to a point where in Australia , brand loyalty is not that important anymore . On the China side , to be the big , you could say the big five , I think everyone considers them very similar . So your JA's , your Longji , your Trina , your Jinkos to a degree maybe , canadian .
It's , however , provides the better price in that particular Watt class because a lot of them almost have identical looking panels .
And these panels sometimes might even in the similar factory and just get a different sticker on the back . Does that still happen ?
So they kind of produce Prior to COVID .
So when the brand's very popular , that's when it's more likely that it's probably made , there's a chance for it , not that it's made , but there's a chance that they are probably from a factory that's not from their own in-house factory , because what they do , how it works , is once the demand consumes , whatever capacity they have , they look at the other factors
which are not so busy , who are not so strong on sales and marketing , and I've seen in my own eyes where I've gone to manufacturer A and I see them producing manufacturer B , which is a popular branded product . Right right . So that's kind of- .
But at the end of the day , they are honoring the warranties but technically , based on the CEC , they're supposed to be using the factory that's tied into the TUV certification .
But the CEC is not necessarily in China . I think , it may it's impossible to track .
It's possible to track .
Now with the company , it's growing , you're getting new staff , you're setting up in Weatherill Park . Was there a particular product other than those power core inverters ? Let's say , in the panel range where you guys took a big bath because actually you got a product in .
It didn't do what it's promised but you , as the company stood behind the product and built it up and actually didn't let your customer down .
Yeah , there's an example with bankruptcies right or the exited Australia . We have had that . That's where we've taken a hit . We would have to pay the labor . We have to provide the replacement panels . So we've done that in the past . I wanna go back to China , because there is probably .
How many times have you in your whole career now in solar traveled back to China ?
I was attending minimum every two months .
Right , and so you've been doing this 15 years or so . That's more than a hundred times You've gone back to China for relationship building , for purchasing product . Go back to the very early days to right now . Is there different confidence ? Is there different China ? Is there different relationship in Australia ? What are the changes ?
It is nobody better than you to observe that when you've traveled under times to the country . And actually my personal opinion is the reason why we haven't had inflation in the last 20 years is because China has been able to produce product that got cheaper and cheaper and cheaper and put anti-inflation pressure on our economy , which has helped us all .
That is at the moment I've recognized when America has all pissed off , that they're sitting on the houses and China is not sitting on the houses and America has shown
¶ China's Leadership in Solar Industry
up . You must have seen a sophistication and a professionalism coming through over the last 10 years .
Just give me the journey Especially in the new facilities , you're blown away . You're talking about huge machinery and it's a massive infrastructure that you newly built , the latest state of the art equipment . I'm always just blown away by the sheer size and the tech used . China is just leading the pack at the moment .
As I said to you earlier , you look at the data sheets , the spec sheets , their their head and shoulders now above Europe and US made product Right , right In terms of , as I said , purely just the numbers . They're definitely leading the way .
Did you make any friendships , or is it always just professional ?
The part I play in the supply chain . It's all built on relationships . Look , it's all , of course , business related , but some friendships have been built as well . But , to be honest , there's tough . Turnover is quite high Right . A lot of the middle management do hop over to different companies .
Even some of the founders you know leave and set up new companies . What's more important for me is the brain relationship on a on on the high level . In terms of Solgis , we've , for example , trina or Solgis of Sungray , solgis with Fronius . I feel that the matter who the management is .
There's always a good relationship with those key partners and unfortunately , in terms of dealing with companies out of China , they still don't understand channel or they know his numbers when the very few , which Trina has probably , in my opinion , probably the best channel control where it makes sense for us , you could say I want to say best channel control , but
where the channel makes sense for Solgis , there is margin . There , instead of selling into channels where they're bringing new markets or identifying new customers , they just sell to . If somebody comes up to them and says I'm happy to buy 100 megawatts , they ignore their strategy and just go after the number .
Everyone wants 20% market share , unfortunately , and what that means is they basically force feed their distributors and beyond what they can take , which causes an oversupply , or they balloon their local warehouses which we've seen over the last few years happen many times which causes a local panel price to collapse .
Even some of these new big players right , they're talking a couple of hundred megawatts . I'm thinking you want to exist in Australia last year . How do you expect to achieve those sort of numbers ? So they look at what the other person's doing and they try to duplicate or reach a higher number to bragging rights .
But if they can achieve that , we can also achieve that . That's the biggest challenge I'm facing .
So you then have to actually be educating them and sometimes say that's a little bit ambitious and you have to do that rather .
Unfortunately , unfortunately , the local team members they agree , but it's HQ they're struggling with and they say , no , you have to achieve this number we need renewables .
Hasn't the world in some way put themselves in a huge dependency on China now , while at the same time , geopolitically , china at the moment and the rest are not talking as well as even 10 years ago ? How does that all going to fit in that dependency ? What about if China decides one day we don't want to supply you . We're in trouble .
Especially like look , a panel factory doesn't take long to build . Whether you're going to get it to the cost level as China is a whole different ballgame .
The next level up , where wafers and especially polysilicon you're talking about , even if you had the money and you can make sense , you can justify somehow on turning over a profit , it will take at least especially in the West at least three years to build a sizable polysilicon plant . It doesn't happen overnight .
So yeah , if we were wanting to become totally independent , it won't happen overnight . It's going to take at least a few years . In terms of wafers , I'm hearing there is some plants being built in the US . India have big plans as well on the solar wafer front . I've spoken to some of the larger players there .
On the panel level they have massive capacity , cell capacity also ramping . So there is options there . But my guess is they'll want to satisfy the local market before looking elsewhere .
You've survived it all the way . What's your biggest advice to an end customer right now ? If they want to buy solar from your 15 years of experience , what should they do ?
Definitely look at quality first , then look at the price . If you use pricing as your solar objective , you'll be burnt . Me personally is after-service support . Do they have an office in Australia ? Do they have a large after-service support team ?
The track record , I'm pretty sure , looking at reviews , that should disclose whether or not they've been a good product or a good operator in Australia .
What are the biggest challenges right now in solar ?
On a distributed front . We've got so many variables right . Put aside the regular supply chain over supply , under supply , local market demand dying out or autosunders a massive surge . But we have things like FX . We saw the dologists move from . Less than two weeks ago it was above 71 . Last week it hit 65 cents . With distribution , our margins are very thin .
What keeps us in business is our volume . If we can't keep volume at a certain level , if that also drops , that could also put us out of business . As I said earlier , it's not just the solar cost , it's also the FX cost as well .
How do you pick product that's going to be the right product for the next season and how much you need ? How do you pick that ?
As you know , with inverters there's so many different variables right , there's so many different models . For us , we don't like to carry more than three or four different brands . If you look at what we carried back in 2015, . Majority of the inverters we had back then we still have , like your SMA , your Fronius .
This year , with panels , we're basically running just three brands REC , which is a non-Chinese brand option , and we have Trina .
But did you previously , when you pick partners , were allowed into their factories ?
A lot of the time they don't , but I'm not bullying myself in , but I'm able to convince them that I need to see it . In most cases , if not all cases , I get my foot in the door onto the factory floor , Even though we're very comfortable with the brands that we're dealing with .
It's probably just an extra insurance that they are using the correct raw material versus what was specified on the TV certification .
Now you having been originally in a factory , starting on the factory floor and seeing all the processes . So when you walk into a factory , can you , within a very short time , straight away , tell if that place is focused on quality or if there are a few issues ?
Let me just share a story where I won't name the company . But this company was huge , right ? Just because the company has a well-known , recognized brand and it isn't their OEM factory , this is their own branded factory . So right away , without any hesitation , there was a big X in continuing using that company because we were bringing in that particular brand in .
¶ Solar Panel Manufacturing Considerations and Warranty
So I visited the factory because the original factory they had was okay . So they were bragging about oh we've expanded , it's fully automatic , blah , blah , blah , blah , blah , walk in . They've got windows open in the factory .
So the dust comes in onto the panels .
Then I was questioning because I brought in my internal QC guy . We were questioning the processes they have . So with me seeing the windows open . So a question about foreign material . So what if foreign material into the was encapsulating the solar panel ? Oh , we've got these .
These are the parameters and they allowed something like a 20 cent piece coin size , foreign material as being acceptable . Being insect , yeah .
Couple of bugs . What's wrong with that ?
So right away we're like we just stormed out of them , basically the QC , a technical guy , because he was speaking to me in Chinese . He , he stormed out because he couldn't , who couldn't believe his , his ears and I , and I tried to . When he told me I tried to speak to somebody who spoke English , which there was , can't you just can we reduce this ?
I said no . I said okay then then we're ripping up the contract . So from that day forward we , yeah , stop bringing that particular type of panel . You won't see it unless you actually visit this physically , because all their PowerPoint presentations , videos they show you . There's a massive variable versus what when you actually visit the factory .
Now , from an environmental point of view , are there some manufacturers from their waste disposal and all that that treat things differently to others ? And do you , guy , go that deep into who you're supplying ? Or you really kind of just worried about the manufacturing process and you know the labor , sourcing the raw material , sourcing the waste and all that ?
Is that part of your whole spectrum when you pick a manufacturer or you're just looking at price ?
Some of those concerns that you raise have only come about very recently . But in terms of environmental , I'm pretty confident that with the ones we're using , or above board , because there are public companies , a lot of them were listed on the US , like Trina , where they were under the microscope for those particular , especially environmental issues .
I mean one of them was pulled up , not the ones we were using , but one of the big five were pulled up , probably back in 2012 . I mean , you can Google it and they've obviously rectified those issues and I'm pretty sure nobody else would take that similar risk of being exposed , because it is very embarrassing .
Is that the one with the fish who died down the bottom of the ocean ? I'm not talking the manufacturer , but I'm just saying you're talking that kind of pollution .
It was a river , yeah , yeah .
What about the whole panel recycling game ? Is that picking up If ?
the panels . Produced properly , it should last 20 plus years . What I'm trying to say is , if they're not , these recycling plants aren't even put in place today or next year or the year after . Honestly , as a big risk it's , but we do need something , probably in the next five to 10 years , because there is lots of precious materials that can be recovered .
So I'm pretty sure someone can make a business case out of that particular segment .
What about the idea to ask manufacturers to put a $3 levy on each panel to then use that to subsidize the transport and all that of panels ? I don't know how that would affect distributors , but have you heard proposals like that at all ?
People claiming this 25 year product warranty that money should be putting . A certain percentage of money should be put in escrow . So if a company does go out of business or leaves Australia or leaves Australia .
There's some escrow money there where , whether it's a distributor or the importer , should be putting aside that money for when there is a warranty issue in the years to come .
As you said , if they're exited which we've seen it happen many , many times , and that would basically create a barrier to entry into Australia , which will ensure that there is a quality product .
I'm pretty sure that any company where if that to put the reputation on the block , then maybe or some have some skin in the game where at least there has to be some sort of pool of money there . There should be a pool there for at least five years .
Got it , and that would have to be pushed through from the federal government , really , wouldn't it ?
Yeah , because 25 years We've inverted this . Now it's industry standard . For 10 years your TV has a one year . Warranty two year warranty . What about your something like a fridge ? How many years does that have ? Why is it something that's mounted ?
externally . Can you imagine if any manufacturer would go back from 25 year warranty to 10 ?
But the issue is , if they disappear , then it falls on the distributor or the importer , and if they disappear it falls onto the installer so just creates this chain where eventually there is a problem .
A lot of innocent people will be hurt , and it'll be .
Unfortunately , it'll be the . My guess is it'll be the Australian businesses or Australian jobs which we put at risk because a company that's where they supposed to have the obligation have ran away .
I have a saying , which is the road to hell is paved with good intentions , and I think it's our consumer law that actually causes relative innocent companies to then go bust , because I think the consumer law says if the importer goes , goes to you , or should the distributor and the importer , then that's the distributor first , if the manufacturer has left .
We're deemed as a manufacturer .
Then the next level . If you decide , oh , we can't support two million panels , then it goes to the installer , and if the installer says , well , there's and when you say install , it's installers right . Because there'll be many , many , many , many , many and .
But somebody could have easily installed 20,000 panels of a certain brand over a period and if they have an issue then that business will go too . I mean , I think the number in Australia now business who've left the solar industry because they couldn't handle the warranty issues coming back to them innocently is over 800 .
So but the consumer law in the first place wanted to protect the consumer . But in some way if you have manufacturers who do not play the game it goes actually back to the poor people who trusted that product and eventually the loss could also be with the end customer , because if nobody's there left then the end customer can't any remedy on that warranty .
So , there's a big difference between one warranty between one reputable manufacturer and the warranty for somebody else who just looks reputable on paper , but as soon as there's stuff happening , they pull back .
And , as you said , when they can't get the customer over the line , oh , there's just increased warranty .
That's true too . Yes , unfortunately , to be in solar , you got to be a hard worker . You can't go to solar if you want to bludge , because you'll be in a roof . You're on hot weather . You inside roofs in hot weather . If you don't want to work , don't go into solar .
So how do you build the relationship with those people and how do you win the trust I'll just tell it as it is right .
Whatever , if I don't understand something , if they've got a question I can't answer it . I'll say I can't answer it , but if they do ask a question and I do have an answer , I'll just give it . I'll just give an unfiltered opinion . The main reasons questions I get is what do you think of this particular product or or brand ?
Even if I don't carry that particular product , I just give my honest feedback .
Now being a distributor that is focusing a little bit more on the quality gear and you're not taking every year a different new product , you must see a lot of manufacturers walking into your door trying to because you're doing big volume , trying to win you over , and often you must say things like well , sorry , we're not taking you , how does that go down ?
Sorry , we're full .
If it's not just for solurgists right , Just to enter the strain market is so tough , whether it's a panel , inverter , battery to to , it's obviously it's easy to to enter Australia , but to actually sell If you're not a proven product or proven brand is super difficult . I think the installer really dictates what the consumer wants .
Okay , the consumer might be researching , but I think their interaction with the installer or the sales consultant is what sort of determines what's on the roof .
Exactly , yeah , and because of a lot , especially the guys the installers and the sales consultants who've been around more than a few years would quickly learn to to only offer proven products , even though it probably will probably be the most affected if they removed the government subsidy for panels and placed it on the battery instead .
Purely just solar panel system sales will go down , but the battery plus solar will definitely increase .
But naturally with when you have a battery , it just means what the good thing about that is it definitely drives more panels to be on that particular roof , whereas someone with just solar you see out there , all these , you see , just with the promotions , right , so 6.6, .
When a battery comes into play , if the sales consultant does his job correctly or the person is selling the system will be trying to cover as much roof space as possible to get the most out of the battery .
So how do you see the EV coming into that ? So there's the panel , there's the battery , and then there's the EV as well .
I mean at home . We have two EVs and definitely it has a massive impact on the electricity charge consumption .
So you're supplying your EVs with solar or not ?
Yeah , I have a 12 kilowatt on the roof and also I have a massive battery as well . That's because I like to practice what I preach With EV owners . Looking at the electricity bill , seeing an order sum increase , yes , they're saving versus .
Petrol .
Versus petrol , but they could be saving a lot more if the EV is being charged by solar .
Right , right , so maybe down the track . If you're a car dealer , you sell an EV and a solar system .
That's what Tesla doing in there , yeah .
Yeah , man , not done . But there's a problem with the Tesla issue . I see whereby , for example , the Nissan Leaf you can integrate into the house , at least theoretically . I think there's still bureaucratic hurdles .
But from Tesla's perspective , they wanna see the car not really plugged in the back of the house because they've got the battery to sell the battery separately . So there's the Apple model , where you wanna be all within your own infrastructure , and there are the models that click on and click out and we both will not know which one will win out in the end .
But can you see the day where the EV drives into the house and actually becomes the battery for the house ?
Yeah , I mean there's lots of talk about that , but to actually see it happen in the real world . I mean , would you wanna start your car and you got no juice left Because it's power in your home ? So , I think I mean I was , I mean when I visited Tesla a few years back prior to COVID .
That was one of the questions is do you guys have any plans to move to bi-directional ? And the answer was no , because they did give that example and I thought about it and I believe they're right .
I know that people might say they're driven by selling more power walls , but I believe you know , if you're , the last thing I want is is to be driving a car that's at 25% capacity or less , because your kids played rock and roll all night . Or you've got your ducted on that night . Yeah , okay , yeah in the summer days .
Yeah , finishing off , what's your prediction for the next couple of years ? The industry's still gonna grow , or everybody's got solar on the house and that's the end of it .
Another case where EVs do have an impact would be obviously with production ramping up , which means battery production ramping up , which means pricing should naturally with scalability . Pricing is supposed to come down as long as raw material pricing doesn't go up . That would help stationary storage pricing to become more competitive and better return on investment .
So once we reach that sweet spot where it does make sense or the payback is well within the warranty period , naturally , as I said before , when you put batteries on your home it just naturally will equal larger systems , larger solar systems .
But there are people who've got a three or four kilowatt there who expect to put a battery on the back and the sales guy has to really pop their bubble and say , listen , you need a new system and a bigger system . Is that happening a lot ? I would think that will happen .
I mean it's not good right to rip off an existing system , but I feel that many homeowners like the look of their home and I think it will look quite ugly with different sized panels on your roof unless you're able to place the different sized panels on a different pitch side of the roof on the same side , I believe .
If that's the only side they could use , I think most likely they will rip it off , even though I don't agree with that way .
And start from fresh , start fresh , but again , then you've got the landfill issue .
¶ Solar Juice's Ideal Installer
What type of installer does really solar juice seek as their key customer ?
For us . It's more . We try to build a relationship loyalty where when I say loyalty , we're loyal to them , not just them being loyal to us . Quality driven installers , where they're not just talking price , they're more . They ask the hard questions about the different parameters of a particular product . They ask questions around what's the after service like ?
As well , they pay the bills .
That's very important Because you have been in solar for so long and you've seen all the ups and down and in the middle had to always hold on and stay on top of it , so it's a very interesting journey . I enjoyed it immensely . I really appreciate you shared it today .
Thanks for having me .