Dealer Perspective…#33

Solar Energy
Tony Smith
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The last few articles have attempted to show the growing interaction between the security industry and the solar rooftop opportunity.  Solar rooftop (with batteries) within a mini-grid environment would likely have eliminated much of the damage from the “Texas freeze” a few months ago.  Texas has its own interconnecting grid that covers the entire state.  All of the interconnecting switches, valves and other components required a winter upgrade, which did not happen.  When a portion of the system froze, the entire grid went down and the state went into a deep freeze.

Late last December, there was the Solar Winds hacking disaster, likely orchestrated by a combined Eastern European and Russian partnership that savagely attacked the Solar Winds Managed Services business.  Some suggest that Solar Winds created this problem when they outsourced their software development to Eastern Europe and a company in Belarus.  Now, we have an American pipeline company, Colonial Pipeline, which services much of the East coast with petroleum products, submitting to a $5million ransomware attack.  All the answers to this ransomware attack have yet to emerge, but clearly one of the solutions is to isolate the control system from out-side connections so as to limit the number of entry points into the system that need to be managed.  Interactivity and interconnection with external power and software can only invite this type of attack when it is spread over 5000 miles.

Public utilities in California and across the nation generally subscribe to the old saying, “Bigger is Better”.  In their case for electrical generation and distribution they clearly want big projects.  Even when they want to use solar in an effort to reduce global warning, their reflex response is to build large solar facilities, such as the one recently proposed for Northeastern Nevada.  These large solar plants, primarily in the desert, have proven to be environmental monstrosities.  They destroy the native bird and animal life, dig up the desert topsoil and destroy the natural carbon sequestration capability of the desert.  Added to all of this is that they then must build the grid that will then connect the solar plant to those who have purchased this renewable energy, thus destroying even more desert environment.

An example of this mentality is clearly exhibited in the Los Angeles DWP project in Kern County , a high desert environment north of Los Angeles.  This is the solar and wind farm that is a centerpiece of California’s commitment to get to 100% clean energy by 2045.  California’s budget surplus is expected to be $75 billion over the next two years, but our government is not spending any of it on rooftop solar with batteries.  They are allocating most of it to social programs and the metro systems in Los Angeles.  While they will probably extend the existing  tax credits for rooftop solar, a massive increase would create a huge construction demand  for new and continuing jobs.  Instead of expanding Medicare to immigrants, perhaps those individuals could be trained to work jobs that will allow them to earn a middleclass living, which includes medical coverage.

NOW…THE CONNECTION TO SECURITY

Vivint is getting credit for introducing Solar to their security customers and they deserve it.  It is additional monitoring revenue, and additional installation revenue.  It creates a much stronger link with their customer base and allows them to combine security and solar into a longer contract form.  The security component does not seem to actually be in the Solar business, but they have partnerships with solar companies, like Sunrun, in a multitude of areas around the country.  It seems to be basically a referral business, where the solar partner uses the Vivint name and shares revenue.  After some research, it was unclear as to whether these partnerships are exclusive.

The Solar business is, today, a political animal and is destined to be more so.  Maintaining or increasing the solar tax credit or protecting the sale price of excess solar power to the utilities will all take political will and come at a cost.  There are three basic elements to a solar company: sales and local permit creation; a fully licensed electrician; and a roofing contractor who wants to expand his business.  This is still the “Wild West” when it comes to building such  relationships, so if you are interested, the time to begin the process is now!