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Will Solar Panel Tariff Save Tesla Energy?

Will Solar Panel Tariff Save Tesla Energy?

– In late January 2018, the
President of the United States approved duties to foreign
manufactured solar panels sold in the United States. That is a tariff and it
starts out at about 30% which sounds like a lot. It sounds like it’s a real big blow to the renewable energy
here in the United States. But I wanted to dig deeper and really understand the context. So I called up my friend Bryan Birsic who is the founder and
CEO of Wunder Capital to help me understand
the true context of it. And what it means for the
future of renewable energy, solar in particular here
in the United States. Now if you’re unfamiliar
with Wunder Capital, what they do is they let
investors like you and me invest in commercial solar projects. Because things like hospitals and schools or warehouses, office buildings, banks don’t understand how to give them the financial tools they
need to install solar and save money on their electricity bill. But Wunder does because
that is their background and that’s all they do. So on top of helping
small businesses succeed and save money and thrive really, it also lets investors like
you and me earn a return. You actually can get paid
out monthly upwards of 7.5%. So all in all a win and I
thank them for sponsoring this video as well as for
Bryan to take the time and actually explain this to me. We had a really insightful conversation so I’m real excited to
share that with you now. Welcome to the show. – Thanks so much.
– Glad to have you on. There’s been some really
interesting stuff going on in the US with solar lately. And I thought you were the
perfect person to talk to. So tell me if I’m mispronouncing this or misquoting this. New laws in the US have
added a, what is it? Is it a 30% tariff? – 30%. – 30% on foreign
manufactured solar panels. – Correct. – And does that apply to
commercial and residential? – It does.
– Okay. – It applies to residential,
commercial and actually utility scale systems as well. – So anybody, anybody.
– Yes. All panels. – And in terms of who makes panels that we know of, who are the big ones? ‘Cause I’m a little in the dark. I only know my little
section of the world so. – Sure. It’s a relatively distributed
global marketplace with a lot of concentration in East Asia. So China actually as early ago as 2013 was the biggest source. But actually recently Malaysia
and Vietnam are the top two. And there’s a variety of
countries including China and East Asia that each
represent, you know, 10, 20%. There is actually a fairly
good bit of solar manufacturing being done in Canada. It’s called Canadian Solar that is a big player in North America and it’s kind of unclear
how this tariff interacts with NAFTA.
– Hmm. – I don’t know what that does means for Canadian biz players. And then there is a fairly steady European contingent
particularly in Germany that tends to be a little higher priced but also a little higher quality and more expensive warranties. And then of course, we do
have a somewhat smaller manufacturing base here in the US. – Yeah and so obviously we
know Tesla’s making stuff and I think it’s in Buffalo, New York which formerly was the SolarCity
stuff I believe, right. Is there anyone else really? I mean any other major US based players? Or I mean are they even a major player? I’m so you know. – Yeah, so they are I think
still getting off the ground in a lot of ways with
Gigafactory 2 as they call it in Buffalo where they’ll be
producing high efficiency panels with if I’m not mistaken Panasonic. But I don’t believe that
that facility is currently kicking off meaningful volumes. So, Tesla right now, they’ve
announced in reaction to the tariff that they
intend to double down on or accelerator at the very least confirm their US manufacturing plans. But they’re not a big player right now. And frankly, you know the reason that there was a trade case at all was because they really are
particularly substantial US based manufacturers. – Hmm. And I recall someone telling me or hearing something
on the radio about this that this is a fair deal because China was kind of selling at things at a loss or selling them for you know, basically no margin in order to kind of conquer the market. Is there truth in that? Or am I hearing that wrong? – Yeah I think there was you know some, let’s call it supply demand mismatch or some flooding of the market
if like that terminology. Actually not so much recently
as there was a big price drop in 2011 that a lot of
people put on China’s plate as it relates to flooding
the market with panels. But I would actually
say that if you look at the substance of the way that China is playing in this market. It has less to do with direct subsidy across kind of pricing as it has to do with
just systematic support of that industry in China. So it’s less that they’re coming in and somehow buying down
the price of Chinese panels and more that if you’re a
panel manufacturer in China, you are getting a fairly
extraordinary amount of support from the government to make sure that you continue to succeed. So it’s actually less to
do with kind of cuteness in you know dumping products here or there or that I think maybe it
makes better headlines and more to do with just a systematic five to 10 year decision by China that this is an incredibly
strategic industry that China needs to win. And a variety of steps they
took to make that the case. – Right, so the idea wasn’t for them to conquer the US market so much as it was a much broader agenda of just pushing hard on renewables and that happened, this happened to be kind
of an effective ad, right. – Yeah, I think one thing
to observe about this market is it’s very much a global market in terms of supply and demand. And so when we think about the impact of US pricing on let’s say total global manufacturing
volume or global pricing, we are important but not
nearly important enough to be setting the agenda. And so exactly right. I mean what China is interested
in is owning the global manufacturing center for not
only what the US is using but what is growing across the world as prices come down. And you know the fact that
it has an impact on the US is I think to your point, probably a secondary
consideration for them. Or potentially not even the intent at all. – Right. And so, you made a Tweet and
you put a chart out there and I love that because it’s speaking
directly to my heart. And you had a little blip
showing the difference. So explain that chart to me.
(laughing) And uh.
– Yeah. – [Ben] And I’ll put it on the screen so people know what we’re talking about. But just kind of walk
me through what this is, that chart that you published there. – Sure, yeah so the first
thing we wanted to do is you know, a lot of
the headline, you know, coverage of this was
around the 30% number. That’s what people hear. That’s what they interpret
as the impact to solar. And if you look at what the
industry is anticipating folks like Goldman Sachs
analyzing the tariff, they’re looking at single
digits increases in solar price. And so we just wanted to A, lay out you know, why that was the case. Why you’re hearing 30% in an article. And Goldman Sachs is telling
you it’s only gonna impact solar pricing by 5%. The second thing we wanted to do was show just how small
5% was as a cost increase as compared to what
we’ve seen in the last, I think we mapped out the last six years as it relates to the price of solar. So, on the first point, the really simple math is this. If you look at the 30% tariff, it actually doesn’t get
applied until we bring in two and a half gigawatts of imports. So it’s not all of the imports. There’s a huge portion of imports that don’t get any tariff applied. And then you look at
things like Canadian Solar are small but you know still exist in domestic manufacturing base. And basically, what you
see is that only about 60% of the panels that are used in the US on a average year, looking
at last year let’s say, will actually see the tariff. So pretty quickly, you’re going from 30% down to about 18% as a
price increase on panels. And then, going from there, panels are only about a third
of the cost or our projects. So, it’s a tariff on panels but it’s not a tariff on inverters. There’s not a tariff on
the construction work that’s required to install these things. The acquiring of the customer
and that sales work, right. So, when you look at
this 30% headline number, it only applies to 60% of the market. So you get the 18%. You then cut that again by a third so it’s about 6% just using
this really simple math of looking at how 30 ends up impacting. When someone goes and buys solar, what is that quote, right?
– Right, right. – And what the industry tells us is if it was a million dollar quote without the tariff, it’ll
be a million dollars and 50,000, right?
– Right. – It’ll be a 5% increase. So first we just wanted
to get to that number. ‘Cause that’s the real nitty gritty. When it hits the ground and
we’re pricing our customers, that’s what they’re gonna see,
is about a 5% price increase. And the second piece is, you
know in a lot of markets, a 5% price increase might
really move the market. It might really change the dynamics. There might be people
who are really anchored into the current pricing and their business model didn’t work if they’re input cost
of what they’re selling is 5% more expensive. The reason that’s not true in solar is that our projects were 5%
more expensive six months ago. They were 10% more expensive a year ago. – Right. – And four years ago, five years ago, which is kind of the point
we make in this chart, there were 2x more expensive. Two and a half X more expensive. And so in solar, the price is
coming down so consistently, that you know the blog posts
that we had that graph in, we called 2017 all over again. Because at worst–
– Right, it’s. – Right?
– It’s similar, yeah. – Similar pricing, similar pricing, right? So, what we tried to show is you know that graphically where we show that this little 5% pop
actually just moves you back to what the pricing
was in July of 2017. And that if you just go back two years, the pricing was much, much, much higher. And we still had a growing solar industry. So, it’s really just about
contextualizing historically what a 5% increase means
for the solar industry. And the short answer is, not that much. – Right, it set us back six months but. – Yeah. – The momentum and the progress
on the prices coming down is still, still happening, right? – Exactly right. – Is there a floor to this? I always wonder about that you know. Like when I think about
the costs of batteries, the costs of anything. You know, we always talk about, oh yeah, as economies have
scaled and all these things like happen, the price
will just keep coming down. I mean, how cheap? Like I think I, I forget what I paid man. I paid like 20 grand for
my 5.6 kilowatt system. – Ha, yeah. – And yeah and then that was before the tax incentives and all that. Like what do we think? Like could we get to the point where a typical home which in San Diego, which is my data point is. Right now, I think the average
install is around $15,000. Could you get to the point
where that’s like a $5,000? I mean, how much more can
these things come down? You still have to pay for
labor and other parts. But.
– Yeah. – Like where’s it going? – Yeah, um. It’s a great question. And in some ways a
somewhat unanswerable one. – Sure. – In the sense that you know, you look at these technology cost curves and the most famous one being Moore’s Law and semiconductors. Where you have this very, very
consistent decrease in price driven largely by
technological innovation. And there’s been a lot of
debate when Morse’s Law going to run out.
– Right. – And uh.
(laughing) You know a lot of people have been wrong predicting that it will. And I’m not nearly the
on-the-ground physical scientist in solar to substantiate
exactly when this runs out. But I think I can frame up the
two different driving factors of that cost decrease. And speak to when they might run out. – Sure. – So, there’s really two factors at play. One you alluded to, a
simple economies of scale. So, we see this in every industry. You double the manufacturing volume. And you see some decrease in costs due to inefficiencies and some fixed costs getting spread over more things, right? So in solar, that has
been roughly attended 15% price decrease per doubling. Which is a pretty good number
across industries actually. So that over the last
six to seven doublings of solar volume, we’ve seen
a 15 to 20% price decrease. So that can continue as long
as solar is growing rapidly. And solar can grow rapidly
unless it’s fully penetrated into the electricity market. So, we do have you know,
definitely a few more doublings before solar was the dominant, you know, electricity generation source. But if you look forward, 20, 30, 40 years, I don’t know that you can consistently apply that decrease. I think you know in that time frame, we may reach the point where
we’re not seeing doublings. – Right. – We’re growing with population or GEP. – Right. And there’s something about that, yeah. Because, so. Part of the weird phenomenon I’m seeing out here in California because there’s a lot of
residential solar installations, is the utility companies I don’t know what the right,
like general phrase would be, pushing back a little bit. You know, by adding a
surcharge to net metering as well as things like a connection fee. And I’ve even heard of some
cities making it illegal to disconnect which is like,
– (laughing) Sure. – Really rubs some people the wrong way. (laughing) So yeah. That totally makes sense
because at some point, the entire grid, we’re gonna kind of have
to rethink it, right. Because how it was designed, it takes.
– Yeah. – What, I don’t know, 40 years to develop the
infrastructure that we have now. And with the residential stuff happening and proliferating so rapidly, there’s gonna become a point where the rules are gonna have to change at some point in time, right? – Yeah, yeah. And I think that’s a great observation. And there’s going to be a we think a reimagination of how the electricity grid works forced by the penetration of solar. And probably also the
penetration of batteries. – Yeah. – Just to hit on a few
of the kind of ways that you can interact with the grid. You know, one is, I don’t think that you
should have a fundamental God-given right to produce extra
power whenever you want to. And get all you want for it. Right, the utilities should not be. That’s like showing up at Walmart and saying I made these white shirts. Like, you have to buy them ’cause you sell white shirts, right? – Right.
(laughing) – That doesn’t make a ton of sense. – Right. – And so one of the ways
that people are pushing back is saying hey, you’re giving
these really great deals to people just sending extra power back in the middle of the day, and we think that’s
really fair as a pushback. We think if you’re generating
power on your facility, and you’re avoiding buying
more power from the utility, that’s something you can
do with a Honda Generator right now in your backyard. Right, like that should not be regulated. When you start to get
to sending power back to the utility, you gotta figure out how
to strike a fair deal. And I think that’s where
the transition happens is when the utilities figure out that they’re not going to be a
unidirectional top-down system where they generate power at
these huge off-site locations. And their only job is to
push it down to you safely. That instead, with the
penetration of solar and its self-storage, you’re gonna have a much more complex bidirectional relationship
with the power grid where you might be
selling excess power in. You might be selling excess storage in. You might be consuming that. You might be doing both
at the same time, right. And that depends on
what kind of generation or storage facilities you have onsite. – Right. – So that, they’re going
to be utilities that kick and fight all the way through that. There are going to be utilities
that see that as the future and adopt it quickly. And we’re lucky in that, we’re in 20 states and we
can kind of jump around and invest where we see good
investment opportunities on the ground and good projects. But yeah, I think as
a consumer in a state, you need to pay really close attention to what your utility is doing and how they’re engaging with solar. – Yeah and I’ve heard some crazy stories about people in Nevada having
serious issues with this and all kinds of stuff going on. So it’s gonna be a bumpy road
I guess is the theme, right. – Yeah, the only thing to point out and this is true even in Nevada which is really the best example of kind of a negative movement
by a state against solar. They’ve always grandfathered
in existing systems. So, you know one of the great things is if you pay attention and
when you execute your system, it’s a fair shake for you. There’s not been a single
state or jurisdiction in the country that has gone
back on that initial deal. They have just changed the
treatment going forward. – Right. – As long as you’re
going in eyes wide open and doing your research,
you should be fine. But you do need to be really clear about what’s going on in
your state at that time. – Yeah, and hopefully your
installer will help clarify all of those things. I know I had a really great one here. And it was really nice
because they explained to me, we have the original net metering thing they had here in San Diego. They changed. And they added essentially like a two cent per kilowatt hour surcharge or something. – Right.
– So. Basically the same function still exist. You’re just not getting as
much as you were before. So it’s like, okay, that’s fair. Right, you know to me, it made sense. And it’s like cool, now that
we have that squared away, let’s go forward here. – Right and I think that’s
exactly the sort of thing that will come to us as a solution which is hey, you shouldn’t quite get what they’re paying. You know just to be clear, the utilities’ business model is basically buying power for three
or four cents on average and selling it for 10 cents an average. And they get paid, that
delta is because they have this enormous transmission
and distribution asset that they have to maintain. – Right. – And so when you send them power and you get 10 cents of credit, if that’s what you’re paying and they get exactly zero share of that, to you know transmit
that across their wires and maintain that asset.
– Right. – That just doesn’t make
a ton of sense, right. So if solar is gonna grow, it’s gotta be that kind
of meet in the middle. They take a small piece but you also get credit for the power. And then we can move
forward as an industry. – Yeah, and 10 cents. Man, I wish that was
even close to what I pay. (laughing) – I should have used a
more southern California specific example. – Yeah, I think our peak rate
here is like 42 or something. It’s insane.
– Wow, wow. – Yeah, we have some of
the most expensive stuff. So that’s why solar of course. It’s weird, I did a video on this. I explained it. So, in southern Cali, like in San Diego or southern California, the weather is so agreeable that you actually don’t
use a ton of power. So for a lot of people, solar
didn’t really make sense. It’s like, yes, it’s sunny. And yes, you can generate a ton of power. But you don’t necessarily
need a ton of power either. So, there’s some real
math that you had to do about huh. And then of course, once
you get an electric car, two electric cars in my case. Yeah, hands down it makes
sense economically so. – Right. – Okay, so that was one
thing was Morse’s Law was and how that affects the price and then what was the second
thing you were gonna mention about the price of solar coming down? – Yeah, right. So one is that manufacturing scale, right? That 10 to 15% every time it doubles. The other is simple
technological innovation and that really manifests most directly as the efficiency of the panels. So efficiency of panels
is actually really simple, I think intuitive calculation. At a 100% efficiency of a solar panel, the panel would be capturing
literally every bit of energy on that square foot that the sun was delivering to the Earth. Which is a theoretical
but not reachable level, I think it’s fair to say.
– Yeah. – And just in the time that we’ve been investing in solar the last four years, we’ve seen the efficiencies
being put to work on the field and lab efficiencies
are obviously you know, always a step or two ahead of this, have gone from about 15% to about 20%. And so really substantial
increase you know, 33% gain in terms of what you’re getting for the same costs,
right, for the same panel. And that is driven by just a million kids, not a million, thousands
of kids at Caltech and MIT and you know RPI and
the great PhD candidates around the country that are
playing with every possible coding and combination and you know chemical cocktail to
tweak out as much power as we can from these things. And that actually is a
lot closer to kind of how you think about the
semiconductors moving forward which is just a lot of
iterative technical innovation that over time and with
a lot of different labs working on it leads to more power per dollar.
– Right. – Right, from a technical basis. – And I saw something about this recently where somebody I think in Europe had an idea to put a second layer underneath the solar panel to capture the added, extra heat. And that was gonna be some
major advancement, so. So barring you know, getting
into the weeds of that, are there any of, it seems like every day
I see some new headline about some new tech that’s
gonna push it to 80%. I mean.
– Right, right. – How much creed to do
you give to any of these kind of headlines that you see out there? Is there anything that’s
like really promising that we know, you know, we have faith in or is still very much like, like every time I hear about a new battery that’s gonna change everything. It’s like great!
– Yeah, yeah, yeah. – It worked in the lab once. (laughing)
– Right. – It’s like.
– Right, right. So that would be my reaction. I mean generally until we see it working at manufacturing scale.
– Right. – Global manufacturing scale, we’re not betting on too much. Now the other good news though is from maybe every 10 or 20 of
those breakthrough innovations that show 70% efficiency in a lab, some portion of that makes it through to actual manufacturing scale. – Right.
(laughing) – And so you see these incredible
potential breakthroughs and you know, every two or three years, one of them actually
gets incorporated into how they vast majority of
panels are getting cranked out in a very systematic way on frankly, you know,
manufacturing facilities that use to crank out flat screen TVs. – Right. – So just really, really large
scale standardized stuff. So, yes, I think your skeptical to look at any given article and think, can that get through the
gauntlet of manufacturing scale? But that is also the place
where some of that stuff does come from. – Right, right. It makes sense if that’s where it starts. I get kind of fatigued by seeing you know, a huge breakthrough and it’s
gonna change everything. And it’s like, that’s the
last you hear of it, you know. – I–
– Yeah go ahead. – I think the other point to make there is that you know, Bill Gates has this new multi-billion dollar
fund, I forget the name of it. But I think it’s called the Frontier Fund or something like that. And the idea is to work on
some of these very, very you know far out there but
potentially breakthrough energy concepts like nuclear fusion. Or you know small scale nuclear or using nuclear waste or there’s some geothermal stuff that’s kind of you know out there. And the one thing that
might be interesting to listeners thinking about you know, particularly Tesla Solar business or just solar in general, is I think that there’s
a real false equivalency that people apply the way that technology penetrates other markets like consumer electronics, let’s say. And the way that things
penetrate the energy industry and it kind of speaks to
what we were talking about. When you look at the penetration curves going back you know, a hundred years of what are the input sources, you see very, very slow changes as opposed to the really rapid changes we see in some other places. And it really has to do with two things. One is just the scale
associated with this market, generating all of the electricity
needed for the country. Like you can go from the lab to one, you know maybe it takes two or three years to prove what one
manufacturing scale facility and then you use that traction
to raise some more money and you build 10. And then you go from 10 to 100. And you are still just a
hair on a rounding air of (laughing) (overlapping dialogues) You still made absolutely no progress. And so you know, you look
at something like solar. You look at something like wind. They’ve been doubling their
volumes for like 20 years every two to three years. And they are just getting to the scale where they’re starting to show up on total electricity production in the US. So I think the other thing
to realize about this market is when you hear about
breakthrough small scale nuclear some of this, you know,
really interesting and cool stuff that’s happening that’s not wind or really straight forward solar, that stuff is not coming in and competing with solar
and wind at real scale. – Right.
– For 20 or 30 years. That’s just what the history
of the energy market tells you. And so, when people see those headlines, that might be helpful to contextualize when they’re thinking about, hey, is solar gonna be competitive
in five or 10 years. I think you can be
comfortable that it will. – Yeah, absolutely, that
makes a lot of sense. That exact same concept
of people trying to impose the trajectory and
progress in one technology onto another and assuming
it’s the same thing, that happens all the time. Like I always talk about
that with self-driving cars. You know, like making a
better way of taking selfies is not the same thing as
making a car learn how to drive itself in rain or
snow or something like that. It’s like a completely. So just because we can you
know, advance the internet in digital technologies incredibly fast, doesn’t mean that the physical world operates the same way, you’re right, so. – Yeah, I think. – (laughing) Glad you brought that up. – Ray Kurzweil is pretty famous, right. He’s kind of made a
career of extrapolating relatively simplistic lines, right. And I agree with you. I think one of his biggest
mistakes is taking places like processing power or
frankly the price of solar or you know, some areas of
like data analysis around AI where it’s a really
understood problem space and we just have to keep
getting better and better at it. And they confuse those with spaces where the problem space is really murky and it’s unclear how you solve it. And you can’t just march
though technologically. You have to figure out what is
special about the human brain that we can drive in the snow. – Right. – And there’s a lot we don’t know there. And so yeah, I very much agree. And you know, one of the
examples that Kurzweil kind of tripped over that
we like to talk about is he predicted the mapping
of the human genome which was really a question
of the data processing power. And so he mapped it
really, really beautifully. But he thought and a
lot of people thought, once we map the human genome, that we’d be able to play with human genetics very easily, that we could code humans.
– Right. – And as soon as we
understood the human genome, we very quickly understood that actually, yes, it’s one code but
the way that it’s manifest in our bodies goes through
this whole separate process of our DNA and RNA. And open up this whole
separate field of epigenetics and so it’s one of those things where you knock down one problem and because you didn’t really
know your problem space, a whole ‘nother problem
you know, crops up. – Yeah, you don’t know what you don’t know kind of a thing.
– There it is. – Right?
– Yeah. – And you solved one
problem and that’s just, I’ve been you know, in
the data science world, we always talk about that a lot. I would always use the analogy, it’s like doing repairs on an old home. You really don’t know
what you’re getting into until you open up that
wall and see what’s in it. And then, you know it’s so. And then once you do that, it’s like, just every step of the way, you just have more questions
than you had before, so. They’re different but
they’re more questions. So, talk to me about whether
or not Tesla is going to benefit from the tariff. Because this was a question I had. It seems like an obvious yes. But I’ve wondered what your thoughts were you know kind of with your
context and knowledge. – Yeah. You know, it’s interesting
because you have to think through a couple of different portions
of their business, right. (laughing) Right, which. So obviously you know,
looking directly to SolarCity which if I understand
roughly Tesla’s market cap and where SolarCity was purchased at. Let’s say it’s 10% of their business, right, 10% of Tesla’s
business might be SolarCity. SolarCity is probably hurt by this but only in a moderate way. Because SolarCity has more revenue coming from solar installations which you know, to our point and you know, the graph that we were discussing, it’s a small price increase. It’s not a huge hurdle. But it’s hardly a positive. You know, no one wants to go
back to six months before. You’d rather just go forward. So probably a small hiccup
to the SolarCity division. And you know the observation there being, from what I’ve seen, their manufacturing is
not big enough to make up or the positive for the
manufacturing is not big enough to make up for the negative
on the installation front. – Gotcha. – Now if you look at
Tesla more broadly as, in a lot of ways, a battery
company more than anything else. – Hmm hmm. – You know, then I think
you have to start looking to what is the impact of solar
moving a little more slowly on whether storage starts
being put into the grid in a lot more aggressive way like we’re seeing in southern
California right now. Like we saw Tesla so famously
do in Australia recently. And actually, there’s kind
of an interesting argument that the reason storage is getting put in is largely to replace or enhance
natural gas peaking plants and natural gas peaking plants are often required or more required because of the intermittent
nature of solar. Natural gas peaking plants
can turn on and turn off really quickly, that’s kind
of their value in the system. So, actually, solar’s penetration
creates more of a need for the thing that Tesla is
kind of looking to replace. So, kind of unclear how
that all shakes out. You know, I don’t think it
either sinks or helps Tesla. – Yeah. – But they’re playing in
enough different spaces, there are enough countervailing forces that I think probably
it ends up being a wash. – Yeah, I feel like a lot
of people’s perception was that Tesla makes truckload of solar panels and now because of this tariff, they’re just gonna, you know, skyrocket and everyone’s just
gonna order Tesla solar panels and all that. But it sounds like yeah,
the manufacturing scale that they’re at now is
pretty insignificant overall. And like you said, the price, the real price impact of 5%
isn’t really enough of an edge for them to I don’t know, put LG out of business or somebody else right. – Yep. – Yeah so, okay, okay good. So, overall, it seems
like we’re gonna be fine in terms of our solar future. And we talked about you
know, in the advancement and panels and thinks like that, are there efficiencies to be
gained outside of the panels becoming more efficient themselves, right? ‘Cause you talked about another way was you know, just the panels getting better. But there’s a lot, no not a lot, but there’s several other key components to solar installation. Do you see other
advancements in those areas that could help us, help the
price of solar come down? – Yeah. It’s a great question because it has been a real
focus the last several years in the industry as
hardware prices came down due to the factors we talked about. What is often called
balance of system costs, basically all of the other things needed to facilitate a project, started becoming a bigger
percentage of the total. Right.
– Right. – And we’ve seen really two area. One is installation efficiencies. So relatively straight forward stuff. The things like pre-fab
and you know including the inverters, they’re
called microinverters into the panels so you don’t
have to connect them onsite, you can make that part of
the manufacturing process. You know, some seemingly
straight forward things but surprisingly efficient. Things around like how
you get those things up and tools you use and
how those things connect. And how racking connects to the roofs. So, as the industry scaled and matured, we have seen a bunch of installation and construction efficiencies. The other place I would
point to is frankly, what we focus on which is financing. And the other big one is
customer acquisitions. So, if you think about the
two parts of this system as all this stuff that you
think of yourself as buying, so the hardware and then the installation and the construction of it, that stuff is what we’ve discussed. There a few other things
you’re actually paying for and it’s the sales effort to close you, it’s the profit margin for the developer, it’s some regulatory and compliance. The big two pieces there
are really officially lining up financing so not having to go through a 90 day process with a
bank that’s really arduous and adds a lot of, you know,
man-hours to the project. And the other one is
acquiring those customers in a really efficient way. So you compare for example, you know, someone coming, walking up to your home and trying to sell you
is pretty inefficient. Relative to you know,
a really great website that gets you through the education curve, gets you to a preliminary quote
before you talk to a human. So those are the two other big pieces the industry’s really been focusing on is financing and customer acquisition. – Yeah and I agree. And one thing that surprises
me specifically about that ’cause I think this
will transition as well to talking to me about
what you guys actually do. I was surprised at the
interest rates on solar loans. Even for residential, they
were pretty high, I thought. It was surprising to me
that I could get something I remember at the time, like
a 1.5% interest rate on a car which would be, I mean
to me like okay cool, that makes sense. But I think it was like five and a half or 6% on solar.
– Right. – And I thought man,
I could take this car, drive it to Mexico and be gone. And you’ll never find me again. Chances of recouping versus like solar. I’m not gonna like take my house with, like you can repossess this if you really had to.
– Yeah, yeah. – So I’m looking at it going, from a bank’s perspective,
I imagine the risk has to be lower on something like solar versus a car or whatever other loans. So is that true as well
in the commercial space? And if so, why? (laughing) – Yeah, totally. So it is the case that you given the same, you know FICO score for an individual, you will most likely get a
more expensive solar loan than you will get an auto loan and then respective to that, even cheaper, a mortgage. And it really comes back
to how comfortable is the broader financial
community with that asset. And how well developed are the channels to recover value from those assets if you are forced exercise your
rights and claim them. – Right. – So most of the reason that
you’re paying more for solar is a combination of it being
a relatively novel industry, particularly for
understanding what happens five or 10 years into a loan. You know, only in the
last five or 10 years has solar gotten real
scale in this country and so, there’s like almost
no debt portfolios in solar that are 15 to 20 years old. And there’s very few that are 10 years and we’re getting more and
more that are five years. So, there’s just not a ton of history. And then you’re also
frankly just dealing with a relatively conservative industry, right? This is not an industry
that jumps really quickly into new anything, asset,
classes, issuers, right. ‘Cause they’re risk adverse
and they probably should be. So, a lot of what we’re doing and so, you know for context, we’re
helping not homeowners but commercial entities,
municipalities, hospitals, schools finance these projects. And a lot of what we’re
doing that a bank doesn’t do and the reason that we have a business is we actually, because we’re
aggregating across 20 states about a billion dollars
of borrower demand. We are specialized solar underwriters. We evaluate the people
doing the installations. We’re evaluating the
warranty for the hardware. We’re doing onsite inspections. We’re understanding exactly
what the economic value is in recovery all the way
through the life of the system and pairing it our you know
exposure as an investor to that loan. And so those sorts of things are things that aren’t rocket science.
– Right. – But a local bank or
credit union does not have a special solar underwriting group that knows how to do that work. Probably even more importantly, there is a not a ton of track record and they almost certainly
haven’t themselves gone out and gotten value in
the case of having to recover. So even though you and
I both know sitting here just thinking through the logic, of hey, this thing has value, you can’t run away to Mexico with it. (laughing) You know, their underwriting
committee, right. Their guys are evaluating
risk for the bank are sitting there saying,
hey, I don’t have data from the market, a ton of data about what the recovery is and we’ve never done one of these things. Like, hey Joe, are you gonna sign up to recover the value on this thing ’cause I know I’m not going to. – Right.
– Right. And so a lot of it is just
that they haven’t specialized and they don’t have the
data and the expertise to know that like a car, or like a home, there’s a really well
understood path to recovery and they know almost exactly
what they’re gonna get. There’s just a lot more uncertainty about that for them around solar. So that is why we add
value to our customers being a solar specific underwriter ’cause we can come in
with a competitive quote, having underwritten the
system knowing how to value it and recover it and using it in the way someone would use not over a home. In a way that a broad-based bank just hasn’t probably developed
the capability to do. – Yeah and so for the
projects you guys finance and kind of customers you work with, who are they? Like who’s the typical
or kind of you know, an average customer
that’s coming to you guys saying, hey, I want to get solar. My bank doesn’t have a clue
what I’m talking about. (laughing) Help me. Who are those people and if
you have a favorite project, I know you have a lot of stuff going on. I mean just.
– Yeah. – Just break that down for me ’cause I think that’s, it’s still a little nebulous in my mind. I think it could be helpful. – Yeah absolutely. Frankly, you know, driving
around any part of this country beside like dense urban areas, you’re gonna run into a lot of our typical archetypal projects. So, we really like generic
commercial office space. So, that’s not too tall
because if it’s too tall, the high-rise stuff, the
roofs aren’t big enough to support much power generation. Right?
– Right. – So, you get too many
stories, you get thrown off. But, think of like the suburban place that we probably got our
teeth cleaned growing up if you grew up in the burbs like me. (laughing) Like those kinds of spaces are great. The warehouse space that’s up and down, all the major thoroughfares
in this country where you see, you
know, 16 different spots where a truck can back their bed into it and unload and reload. Those are great facilities for us. You’re kind of generic commercial owner operated office space. We think of a municipal building, a university building, a hospital building. Just an owner operated commercial entity are great for us and that’s our sweet spot. Oh, one other archetype we do a lot of is we do a lot of retail commercial space. So think of like the Big Box store that has five or six
smaller stores next to it. We’ve done, I don’t know that I can
mention directly our borrowers. There might be a violation of– – Sure. – You know, personal identifying them. But there’s a couple of like
big retailers you would know where we can underwrite
them as the primary tenent and you can get four or
five smaller businesses that you can kind of lop into that loan. So that’s the kind of stuff we do. It really is what you run into again, besides dense urban areas. This is kind of a non-residential space that you’re gonna see around the country. – And how often does the, so I imagine these
conversations are basically a math equation, right? Where you basically look at it, how much electricity do you use? How much will it cost to set this up? You know, amortize that up
for me across whatever period. I mean, how many of those
times does it not work out? It’s seems like–
– Right. – Like almost always, you’re
gonna look at it and go, okay, that makes sense, let’s do it. I mean, does it happen
that there’s a lot of uncertainty about it? I mean it seems like it would
be pretty straight forward. – Yeah. I think it’s a really
insightful observation to narrow in on the fact that particularly when you’re not
talking about home owners, you’re talking about–
– Yeah. – You know commercial
entities or hospitals. It’s just, am I gonna save money. Right, that’s it?
– Right. – It’s a simple decision, right. It’s, I am paying X to
the utility right now. This solar system could offset Y. That’s whatever percentage of my bill. And then can I get a financing package where I pay less than my savings. – Yeah.
– That’s it right? I would say and for folks that are interested in going solar, there is a little bit of
nuance in figuring out what those economics look
like particularly over time. And one of the nice things about working with someone like us that needs to make sure
the system makes sense as a standalone. Because we’re investing in a lot of ways in the viability of this system and in your positive economic
experience as a borrower. Our incentives are a
little more closely aligned than maybe someone selling you the system who you know, once they sell you, our average system is about
half a million dollar system. Once they sell the half
a million dollar system, I’m sure they hope you
have a good experience. – Yeah.
– But, you know. If you’re losing money in year seven, they’re not necessarily
on the hook for it. So, we are a little more
conservative we find in figuring out what
those cost savings are. There’s some things like, you know operation and maintenance costs and to be pretty de minimis, but we like to assume
occasionally something goes wrong, right and add that in over time. We’re doing really
conservative things like estimating that as soon as a piece of hardware’s warranty has expired, we’re gonna assume that
you get really unlucky and in that next year, it fails.
– Yeah. – Right, where as you might
say, have someone who says, yeah, you know, it’s only
got 10 years of warranty but let’s take it to 15 years ’cause we’re seeing a lot of that. So I think there’s some
ways that you can kind of play with it and you want to be careful if you go to particularly someone that you get a sense that’s somewhat salesy on that installer developer side. – Hmm hmm. – You know, it is one number
but the calculus getting to that one number has some nuance. – Yeah. Yeah and I can echo that, that was my experience from
a residential side, as well. You know, and I’m sure
it’s the same kind of thing because the incentives aren’t
totally aligned, right. So working with you guys, it sounds like because you have investors, and you’re trying to show
them a return, as well, that you truly, the incentives
are much, much close, much more closely aligned. – Yeah and like the short story there is you know, if you’re
paying more for your power and you were sold a bill of goods that you were gonna save money, you might just stop paying the
loan on that system, right. Like that’s a reason for
you to start defaulting is if you feel like you
got a bad bill of goods or this is a not an economic decision and so, our incentives
really are very well aligned. Where we want to make sure
our borrowers are in fact saving money in total including our costs. Because if that’s the case,
why would you ever stop paying? If you’re gonna go and
pay more to the utility and I can turn off your system. As long as you’re in that space, you’re gonna pay me. Where as if it’s more expensive, who knows, right? – Right.
– So, yes. You’ve very, very much aligned and I think if you’re looking
at someone doing the financing and you’re a customer, I think that is someone you can go to as almost a fairly objective third party or at least an incentive
aligned third party and say, hey you know, how
did you get comfortable that in year seven, you know, these panels would still be working. And they’ll say to you, hey,
well this is the warranty and they’ve got this
great reassurance policy and I think you can have
a more straight forward, honest conversation with
the financing entity than the installer for that reason. – Yeah, that’s fantastic. And so, something I’ve been
confused by a little bit, is how a normal investor like me could actually get into this space. Because it is, there are some steps and some qualifications, right? And those aren’t totally clear to me. – Yeah. (laughing) – And even when I looked into it, even when I looked at like how to become an accredited investor.
– Yeah. – It seemed really murky. So explain to me like
what the options are. What the steps are and
all those kind of things. If I, or someone else, you
know, wanted to actually support one of these
projects and see a return and all that. – Yeah, absolutely. So I’ll assume folks
listening to the podcast are familiar with the stock market. I presume a lot of folks
might even be Tesla investors. I think I can disclose
that I am a Tesla investor. (laughing) And so you know, for a long time through particularly the stock market, you could have bet on you know, the underlined companies that
were gonna win this market, right, that were gonna take market share and either sell a lot of panels or sell a lot of systems. And what we’re opening up and some other companies are opening up is the opportunity not to be the person, if you want to use the home analogy. You know, you’re not betting
on who’s gonna build the house or what hardware they’re gonna use and who they’re gonna buy it from. You’re just betting on the
rent coming off that house because it has underlined value and that has ongoing cash flow associated. And you know, there wasn’t really a way and there’s still not
a way for all investors to bet on the ongoing
production of electricity from the system once they’re billed which has this historically,
in the industry, pretty predictable cash flow dynamic. As opposed to what could
be a pretty you know, rough ride and a pretty risky
ride with the public markets. So, the first thing to say is that we’re kind of opening up a new space is I think why the government
looks at us differently than investing in a
Tesla stock, let’s say. So the lay of the land there is we issue what is called Regulation D Securities. This was established by the 2012 JOBS Act which had a bunch of crowdfunding
kind of previsions in it. And also along with a bunch of other folks in industries like real
estate that’s really taken off based on these regulations. we basically have been able to open up a bunch of lending spaces
that frankly were previously the purview of big lending
institutions and banks. And make them available unfortunately not yet to all investors but at least through accredit investors. So, accredited investor
in the United States is defined by the SCC as
either one of two things. So you don’t need both of these. You need one of the two. Either you can qualify through income which if you’re in
individual filer, tax filers, that’s $200,000 in annual
income the last two years and some reasonable expectation
to make $200,000 this year. Or as a joint filer,
as a family, $300,000, same criteria last two
years, expectation this year. Or you can qualify through net assets. And so this is more than a million dollars excluding your primary residence. – Right.
– So. – That disqualifies a lot of
people right there, right? – Well you see, yeah. You can do either or so
basically what you end up seeing is you either have folks that
have relatively high incomes. You know we see a lot of you
know, not so much twenties. Some twenties can grasp on to those folks. A lot of 30, 40, 50-year olds right, that as a family in
particular exceeding $300,000. And then, most of the folks we’re seeing hit the million dollars, largely have a bunch
of retirement accounts that they have had retirement
accounts long enough. These tend to be older folks,
that between two people. Again, so the million can be as a family. So between two people,
they might have more than a million in their 401K’s. And then to the extent
they have a secondary home or a piece of a secondary home, that can get you to a million. So yeah, you’re either
basically a relatively you know, high paid professional
in your younger years or you’re old enough that
your retirement accounts and maybe a second home
get you to a million. So there are seven
million families in the US that are accredited roughly so it’s not, it’s not just you know the
real cream of the top .1%. But it does exclude an
extraordinary number of people and Lord knows there’s no
one that would be happier if we were available to everyone than us. – Sure, sure. – We hate turning people down. But it is nice that, since 2012, you know as an investor, you can go into some of these spaces that return some, what we think, really compelling yields. Real estate, some of those platforms have some really compelling
projected yields. We have, I think, some really
strong projected yields in places where, you know,
banks really dominated before those securities. So, you know it’s starting to open up. Not quite where we want to be. But still a lot more open than we’ve seen pretty much, ever before. – And yeah, thank you for that explanation ’cause that definitely helps. And one one of the
things that came to mind when you were saying that was, the older folks that
qualify because, you said, having the retirement accounts
and those kinds of things, as I understand, a lot of them are actually, it aligns really well, right. Because they actually see a
dividend from this, right? They actually get paid. Is that right? – Yeah, that’s exactly right. So, you know, the mortgage
analogy is apt here in the sense that we are
amortizing these things over a relatively long term. But just like your mortgage payment, there’s a piece of principal coming back. – Yeah. – So if you make an
investment in a Wunder Fund, a small portion of that every month is getting paid back to the fund and then distributed to you. And then you are receiving
a monthly interest payment on that outstanding principal. So yeah.
– That’s perfect. Yeah, because this is like
the, I think what’s the term? Dividend investor, where people invest in certain stocks because they have a dividend and because they want to
live on that money, right. Where as like me or someone you know, in their younger years, you’re not really interested, you’re not concerned with that. You’re more looking for the growth versus the dividends so yeah, that sounds to me like
the perfect alignment especially for someone that
qualifies in the first place because of those things. Well man, I really appreciate the time. I think this was super insightful. It sounds like the future is bright, not only for collecting energy but also for financing and doing
all those kinds of things. Any final thoughts about 2018 projections? Like, big picture type stuff? – Yeah, I think what’s really helpful and I thought you did
this really beautifully when you were talking about, what does the world look like when solar’s a third of
the costs that it is today? I think it’s easy, you know, just our tendency in general
is to kind of focus on that myopic moment and what’s
happening in this quarter, this month or what’s the most recent data or to focus on some of the you know, both positives and negatives
on the policy front. But if you pull back to a
five to 10 year perspective and this is what that
graph really tries to show. You know, the number one, number
two and number three story is the cost reduction in solar, right. If you just extrapolate this thing out 10 to 15 years and it’s
been going for 40 years in a very consistent fashion, if you put that out 10
or 15 years, you know, it’s not this nice incremental story of let’s save some money on your power, it is a, you know, a
required piece of any build. And almost a fiduciary
duty of any enterprise to put up solar because the prices are
gonna be so compelling. And so, I think at a macro level, I would just encourage folks to look at some of those underlined trends and think about what the world looks like in five to 10 years which I think just don’t get a chance to do as much as we want to. And I think when you do that, you see a really exciting
future not only for solar but for that utility dynamic
or grid of the future whereby it’s bidirectional,
it’s multimodal. You can add resources and get fair value. And frankly, it’s also just
a hell of a lot more stable, a hell of a lot more resilient which we see in places like
Puerto Rico is so important. – So I hope you guys enjoyed the interview with Bryan Birsic, the CEO
and founder of Wunder Capital. It was perfect how it came to the head of exactly what we do here. We free the data so our mind will follow. And that’s exactly what
happened with this whole story. Was that, it seemed very sensational and like you know, the sky was falling. But truly, when you zoom
out just a little bit and look at trends and
everything in the industry, it likely is not gonna have
much of an impact at all. Of course, we don’t want
it to have any impact. We want to keep moving forward. But still in the end,
the trend is the same. And this little blip is really
not gonna make a big impact. So, I’m curious what you
guys think about that. Leave me a comment down below. And stay tuned for more content related to solar in the upcoming episodes. Because I’m really
fascinated with how this is gonna really change our world as well as what it means for
Tesla in their energy division which may become the
biggest part of the company very quickly here. So thanks for watching. And I’ll see you back
here at the next one.

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75 thoughts on “Will Solar Panel Tariff Save Tesla Energy?

  1. 2011 when I put 5kw of solar on my roof in Australia,Victoria total was 26kaud & 17800aud after insensitives. Now you can get 5 kw for under 5kaud all be it with Asian imported panels and inverters v my German panels and inverter but still 5kw's of solar installed. So I believe it will happen in the USA.

  2. The price is dropping fast enough that even a big tarrif will knock it back 5 yrs or so
    Me bad
    I wrote before the interview
    But with the start of the steep part of the S curve …….

  3. Since this kind of finance is all about present value calculations, I would have been curious as to his thoughts on utility retail pricing projections his group is making. Seems dubious that they would be doing straight line from today's rates. Not being in the power industry, I don't follow national rate trends, but California power has been slowly increasing in price over the last few years.

  4. Here in Sydney, Australia, we managed to install a 5.13kw system for $6,400, or $3,400 after the sale of Renewable Energy Certificates. This is roughly $2,700 USD. The panels were from a Chinese company called link Energy and the inverter is made by a Chinese company called ZeverSolar. Seems solar is a lot more expensive in the US. Our electricity prices in Australia is double the cost in the US which allows an amazing payback period of 2.5 – 3 years.

  5. I’d like to point out that Moore’s law has hit its breaking point where the cost of getting smaller has grown so substantial that they can’t keep the 4 year cycle. It’s now 6 years and that’s without delays. Solar will hit the same wall where labor, shipping, and profits set a bottom limit to the cost.

  6. I'm currently on the Ontario MicroFIT program. I have a 9.92kW system and selling to the grid at $0.288 per kWh locked for 20 years. ROI after 10 years, and great for the planet. Bonus, I can opt out of my contract at anytime god forbid the rate exceeds $0.288 per kWh and consume what I produce instead…

  7. Your guest may want to watch videos on "Uptalk" (there are many) and the video on TED by Julian Treasure "How to speak so that people want to listen."

  8. I'm having a hard time here in South Mississippi. Does anyone have a contact and/or company that might help me with solar here?

  9. The cost of net metering discussion was very cool. We are on a power co-op. Even though we are contributing back to the co-op more than what we produce, we always have a fix cost (franchise fee) per month. This last month that fee went up. It is to cover their cost increases for management and maintenance of their portion of the grid. We don't mind paying for that as it is a fixed and known cost which doesn't change (much). Ben, as you were saying about your added fee. It makes sense.

  10. China is keeping all their citizens working, even if for $1/hr, and that creates excess production, which is scooped up by other countries who want to exploit this cheap labor instead of pay an US workers minimum wage. There is absolutely no reason to import anything critical to our nation that we can do ourselves, ESPECIALLY renewable energy. We should NOT be giving a 30% solar tax credit on something made outside the US. We don’t need no stinking tariff, just give the 30% discount to American made solar equipment, so you can save 5% buying from someone who earns $1/hr or save 25% buying from someone who would be on welfare if not making solar equipment.

    It’s a bunch of nonsense to think that allowing low cost labor product into the US helps people move up to better jobs and innovate. The innovative people will innovate and work at places like Apple, SpaceX, Tesla, and those minimum wage people who’s jobs got moved overseas will just go on welfare, not become chief designer for SpaceX.

    Sam Walton and a few other select people got filthy rich putting Americans out of work and selling Chinese products. How many of those jobless people made innovations that made America better?

    Japan doesn’t need import tariffs, because they would rather buy something that keeps a Japanese citizen out of the soup line, just like America was like 50 years ago. Then we had to remind people “Buy American” and “Made in USA”, but now even that has no meaning because people feel they are entitled to be paid $15/hr to flip a burger, but only pay someone $1/hour to make the products they buy.

    It’s not sad that Obama and Trump both made solar import tariffs, the sad part is that they needed to, because Americans don’t want to give other Americans jobs, they want to spend someone else’s month to provide welfare for those who lost their jobs due to moving manufacturing offshore.

    I hope Trump cuts all tax credit for imported products that are not manufactured in the US. If it’s Toyota, LG Chem, Nissan, they better have a factory in the US employing American workers, or not be eligible for tax credit. This would help Tesla who has the disadvantage of paying American wages.

  11. Great video, Ben. You touched upon utility companies’ reaction to homeowners installing solar. Here in AZ they have reacted by enacting legislation aimed to prevent anyone who is currently on the ”grid” from disconnecting their service. I was recently at a Tesla showroom in Phoenix, as we have two M3s on order. As we waited in line to see an M3 brought to the showroom, a Solar City representative was there who informed us that there are several lawsuits pending on the inability to totally disconnect from established service. There are also limitations as to how much energy you can sell back. I can only see that as the inevitable growth of solar continues, utility companies will need to rethink their business model or risk losing a substantial amount of customers.

  12. Lots of very good information! I was a little hesitant to watch because of the long run time, but it's worth every second!

  13. I'm only a mminute in, but every time Wunder comes up I feel obligated to remind everyone they are only for accredited investors. This means if you're not a millionaire, they don't even want you participating. I guess that isn't a problem for most Tesla owners, but for most people, it's a waste of time to even look into right now.

  14. Will this equate, in cheaper solar in the rest of the world ? . There are companies that are claiming 44.5% efficiency and a German company claiming that they have a material that cost a faction of the price of silicone. I read but I cannot remember where this information came from .
    I have Tesla 2 battery/5.22solar in Australia, thanks to the federal governments anti anything except coal policy. I listened to them , and thought, there is an almost certain chance, minister's are receiving envelopes from coal and oil.
    Now I have free electricity, year round.

  15. Not bad, but the term lengths seem too long. Inflation is kicking in, interest rates will rise, CD's and various bonds will start raising rates…

  16. Ben you need to tell people that to invest in Wunder Capital you need to be a accredited investor. Not everyone can invest.

  17. They need to come to Wisconsin with Foxconn, they say that it's going to be bigger then Tesla Giga Factory 1 in a foot print over all, we have a March 7th meeting about the 7 million gallons that Foxconn will be using every day from Lake Michigan, that raises concerns about our fresh water that seams everyone in this country is always trying to get, I had asked about Solar an Wing on a project this size will they match Tesla's Green print
    Maybe something to look in to

  18. This new tariff has made it more expensive for people to go solar. The only good news is that solar cells do have an exception under this new law. Long term the solar cost is competing with coal and other non renewable sources of energy. Nice discussion on the topic.

  19. Great vid, thanks Ben! TONS of info here and agree with this discussion, the 30% tariff won't do much at all to solar progress and sales. Note to those who don't know, there never was much solar manufacturing in the U.S. and there probably won't be any or very few new players making panels as manufacturing is virtually all automated, spitting out panels every few seconds, so each mfc. can just increase shifts or add to production. I would like to see much more First Solar–type mfg. of cadmium thin film, as it's much less expensive than silicon, faster and easier to produce and has the same or better efficiency than most Si panels out there.
    I bought my 5kW solar PV kit with inverter, racking and panels for: $4,900 (from a wholesale solar co.) and installed it myself. It was pretty easy, watching YouTube videos, and would encourage everyone who can, to do this yourself. I got the 30% Fed. Income Tax Credit and a $1,000 state credit making my system net cost: $2,430. With the amount of power I produce, my ROI is roughly: 2.3 years. I think solar installers are gauging people pretty bad as they only spend, on average, 1/2 day installing a system but making $15k-$20k an install, it's crazy. If they make $3k-$5k for an install, that's reasonable. My next-door neighbor bought the same-size PV system I have, on a solar lease, paying $140/mo for 25 years. That's $42,000! So, his ROI is: 25 years!! See how insane that is? He almost cried when I told him he and I could have jumped up there and installed his system on a Saturday afternoon and I would have taken a pizza as payment. Junior high kids can install solar, it's easy. Your local electrician can come hook up the inverter to the panel, in an hour or two for a few hundred dollars.

  20. You could title this one "Ben & Bryan's Excellent Adventure", because it was a most excellent explanation. I wish I could qualify as an investor, but wundercapital told me they will let me know as soon as their criteria change – perhaps this year.

  21. A better way to do this would be for the government to offer an incentive to consumers who buy US-made solar panels.

  22. Some utilities offer lower off-peak rates. I wonder if it will ever make economic sense to install a PowerWall and charge it during off-peak and then use the PowerWall for some or all of the peak energy you would normally buy from the utility. I wonder what the numbers would look like. Where is the breakeven point?

  23. This was an excellent episode. As a retired CCIM Commercial Realtor, your guest explained a lot in a very understandable manner.

    I really enjoy your videos and look forward to each one.

  24. Very good video. Could you ask him if purpose of the tariff (President Trump must have had a reason for applying it) was achieved? We have been shown very well in this video that the impact to full system cost is minimal.

  25. We'll encounter problems going forward that $10 and $5 MWh solar and cheap battery storage will not solve, but we could build out at full speed for the next ten years before they slow us down. Seasonal storage and the grid seem like tough nuts to crack, but for now the obstacles will be posed by inertia — mental inertia — and a counter-offensive from fossil fuel interests. In the U.S. we'll be fighting in the Regulatory Commissions, federal and State, to clear the way for low-cost energy (solar and wind). The old public interest regulatory meme — cost and reliability — does not include environmental sustainability. We're winning the cost war — already won in the Southwest — but I hear RELIABILITY more and more from industry pros, and what that means is more Natural Gas. And that means we won't win the fight to prevent climate chaos.

  26. Solar subsidies are out of control! How many solar companies went out of business? After taking all Federal subsidies? How many of them were outright scams?

  27. Hi Ben & Bryan, Wow you guys are awesome for putting this video out, executed with such clarity thank you both!!  I'm considering becoming a solar consultant here in San Diego and your video was an invaluable tool to add to my passion and quite frankly obsession with this much needed industry. Love Musk, Tesla, the Mega factory, solar roofs and power walls all that's happening is super exciting and very important to our future. So for now, until our new mega factories can meet the supply, we can focus on lowering the installation costs here in the US. What do you think is causing the inflated prices for installation? Are there too many hands out i.e. the middle men, sales referrals, etc? Do we have a shortage of quality installation crews? What type of contractors license is required to install solar? Would it help to design, engineer & fabricate the systems in factories as they did with trusses versus cut and stack roofs? Then perhaps the loads can be concentrated upon with a few add-ons to truss members on existing construction and designed into trusses for new construction. This way the roof infiltration is kept at a minimum i.e. less problems with water infiltration thus increasing the demand for consumers to purchase? Where in San Diego are you Ben? I'm here
     in Pacific beach…Cheers 😉

  28. Lakeland electric in Florida is the worst. They are completely anti solar. During peak times you incur a demand charge based on how much of a load you put on the grid if you use any power from the grid during peak times. The demand rate is $5.62 per KWH of demand. That doesn’t include any energy you actually use. You you can still be at a zero net meter, but you will still have a monthly bill for demand charges of 50 to 75 for a resident.

  29. Wunder capital said a while ago they were hoping to get setup to accept non accredited investors. Are they still trying? Is there an ETA?

  30. Ben and Bryan, Nice video but you are focusing on the overall good of solar instead of how China manipulates competition by, for example, their taxes/surcharges on foreign made goods coming into China. Tesla is fighting the requirement of giving up 50% ownership of a new factory in China. China cannot have it both ways.

  31. In trying to repo a solar energy system all they can do is put a lean on your house. Its would be to expensive to try to take the system back.

  32. Ben — Seriously man your best show to date and what you have always done best. As for Bryan Birsic I was very impressed with the scope of his knowledge on the subject. He should do a TED talk.

  33. Good talk guys. As a solar salesman I’ve been wondering about the tariff’s effect on Tesla and other us North American manufacturers like sun power and Canadian solar. I heard NAFTA will protect those but we’ll see?

  34. Wow! That guy (Bryan Birsic the CEO of Wunder Capital) who Ben interviewed really knows his stuff. Thanks for the interesting and informative interview Ben. This 52 minute video was definitely worth watching.

  35. Thanks for this video. Gives me better insight and understanding of how this will actually effect my buying solar this year or next.

  36. This video finally got you my subscription. Really interesting topic, very insightful questions you put to the expert you present, overall quality of the structure of the interview was pretty solid, reminded me the quality of a well written investigation article on any major newspaper. Also I liked the way you gave place to your interviewee to describe his business with out being a totaly tv sales channel style.
    Keep up the good work. Also liked your participation on Saúl Lopez's Q & A video on model 3. He was my first ever subscription on YT so that it's s pretty solid referal to me.

  37. At least in Europe you can buy a hybrid solar panel which has semiconductor surface for electricity and a normal heat collector under the surface. The heat collector helps in two ways. 1. It captures heat into liquid that you can use to heat water for example and 2. It cools the semiconductor layer thus increasing its voltage -> higher electric power.

  38. I suspect part of the reason for the higher interest prices when financing is that construction is a significant part of the cost. Sure, they could pull the panels of the roof, but I don't see how much value those panels have once detached from the system. It may make a lot more financial sense to roll the financing into a mortgage for the home. Rather than repossess the solar system, repossess the whole house, which would take the uncertainty out of the situation.

  39. The inclusion into the tesla hype train will save the subprime finance company called solar city. It would be facing bankruptcy

  40. Our government here in the US subsidizes oil big time. Fracking is destroying groundwater but who cares, they are getting oil.

  41. I hate the way you title your videos. Clickbait extraordinaire. Sure, you know what you're talking about, but it seems indecent to pander with titles like this.

  42. You can find something like this on the Avasva page. Full step-by-step instructions right on your desk.

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