Silicon Valley, a tech epicenter, outpaces the global average in per capita energy usage by over 300%. Silicon Valley Power's commitment to 50% renewable by 2026 and 60% by 2030 is a stride toward offsetting this high consumption. Yet, the specter of energy poverty lingers, as 3-4% of Silicon Valley homes grapple with energy costs, despite interventions from local utilities.
Randy Zechman is the CEO of Clean Solar, a key player in the Bay Area's solar power industry. His leadership has earned the company a solid reputation, with a 5-star rating for its solar power services. Customers trust Clean Solar for its straightforward and dependable solar solutions. Leading Clean Solar, Randy has established the company as a top solar installer and a certified B Corporation. This reflects their commitment to high-quality solar panel technology and sustainable energy. Randy's focus is on providing clean, renewable energy through solar power solutions that benefit both people and the planet.
So, Clean Solar is a solar and battery installation company. We have been around for 16 years, operating in the Bay Area, one of the largest solar and battery manufacturers. So we're a rare entity that has made it 16 years in the solar space, providing lots of solar and batteries for residential and some commercial customers.
So typically, we'll have a homeowner call into our office as we take all the, we're kind of a soup to nuts installer. We take all the calls. They'll meet with an inside sales representative who will ask them many questions so we can better prepare a proposal that's accurate to what they need. Sales reps will typically meet with them. Give them all the pricing, talk about some of the challenges with their installation, and see what their real needs and wants are. And then, after signing a contract, we'll have our installer, so we don't subcontract any work. It's all of our employees. We'll do a planning visit to make sure whatever the salesperson thought we could build can be built, so essentially, an engineer verifying the salesperson's work. And then we'll go through the whole permitting process. with the local jurisdiction, the city, AHJ, however, you think about that. And then, we will have our installation crews eventually come out after the customer works with the project manager and determines a date and time and all that stuff. So installations typically take anywhere from one day to six or seven days, depending on how large and complex. When it's completed, we then have a permit technician come out and do an inspection with the county or the city. Once that passes, the salesperson gets reconnected through the project manager to the customer. They will go through all the final steps, ensure the system is commissioned, and answer all the customer's questions. After that, the systems just kind of work. The nice thing about solar is that there are not many moving parts when solar panels are on the roof. They just collect energy. There are no fans or anything, right? It just kind of works, so customers enjoy going from a $400 electric bill to a $10 electric bill every month.
So there can be a lot. One of the little-known facts in our industry is that 40% of contracts that get signed aren't built. I see. So it's crazy. I don't know of any other industry like that. At Clean Solar, we have a 3% fallout rate. But that's because we do a lot of effort on the front end, training salespeople and going through many extra hoops at the beginning to ensure no surprises on the back end. So, the challenge people could have is that their primary service panel isn't large enough. So they'll need to upgrade to a 200 or 400-amp service panel, depending on what's going on in their home and how large their system or battery system might be. They can also have roof issues. So, any roof that's older than 15 years old is Probably not putting a solar design on it unless you get either a new roof or new underlayment. Because you're going to go up on the roof, and that solar system will be there for a long time. So, you want to ensure that it will be weatherproof for 20 to 30 years or so. So those are the two main things I would say that can come up. Many little things with jurisdictions can happen as well, but those two are the significant hurdles.
Yeah, we do all of that. It's widespread for us, so we try to handle it right out of the gate. So the weird thing that happens, I feel like, in the industry overall, is salespeople try to sell something and don't worry about what happens afterward, right? So we just take a different approach and say, hey, Mr. and Mrs. Homeowner, you're gonna have this issue, and it's gonna cost X amount of dollars. So if you wanna move forward, that's gonna be part of the deal, or. or you're probably not going to end up with solar, right? And so there's a little bit of a different methodology when you're preparing someone for what they're going to see what'll happen as opposed to just trying to get a say a lot of it.
Absolutely, yes. We do all of it with our employees, and we enjoy that. We're able to control the experience a little more. Sure. And so we can say, here's our principles and guiding light, and then we can deliver on that expectation.
So, as far as solar is concerned, you always want solar facing in a southerly direction. I see. Ideally, you want it on the south-facing roof. Your following best location is a southwest-facing roof, and then a southeast-facing roof would be your third choice. Suppose you put things on a northern-facing roof. In that case, you'll lose about 30 or 35% efficiency, which means you need 30 or 35% more solar panels to get the same production, increasing the cost by roughly 30 or 40%, and then the economics kind of go away. So many homes are southerly facing, and usually, people have good enough roof spaces to do that. You typically find challenges when you get into tall buildings, apartment buildings, where you've got a lot of people stacked on top of one another. But for the most part, you can solve at least much of the electricity bills that people have, if not all of them.
Yeah, so this is an exciting part that not many people, I think, realize or think about. It's… It's one of the only investments you can make in your home where you're making money as it increases the value of your home. If you add a new kitchen or refrigerator or whatever, you will add to the value of your home, but that's just an out-of-pocket cost. This means you have an out-of-pocket cost that pays for itself and eventually adds to it. And what most people don't realize is the speed at which homes sell that have green energy on them. So homes will sell 30 to 40% faster just by having solar on them. So that's one of the key benefits, especially as we get into a market that we're in now with high-interest rates. And then from a property value standpoint. So I've got many homeowners that will come and get solar systems from us early on, 16 years ago or so. And then they're on their third solar system because they realize that that investment paid for itself as they move from house to house every three, five, seven years. And so typically, it's sporadic for someone to get solar, move to another home, and then not get solar again. We see it all the time. Our add-on business or our customers who are repeat customers, which I wasn't expecting in this industry, right? Because you think it's a one-time significant investment for somebody. But it's astounding. It's over 25% of our customers are ones that come back.
So, the term net energy metering means what happens when a meter spins backward. So what that means is I've got a solar system on my roof. That's going to produce power. That power is going to come into my home. And I will use it on my computer, my air conditioning, my lights, whatever it might be. Whatever energy I don't use in my home then goes out to my meter, spinning the meter backward. And so net energy metering is the term and the concept that says, what do I get paid when that happens? What's the value proposition of spinning a meter backward? The value proposition is whatever I would have paid for that electricity. But that doesn't mean when I rotate the meter back, I get the same value. So when I started the company 16 years ago, we were on NEM1, or Net Energy Metering 1.0, which was retail value. If you were charged 45 cents, the utility had to give you 45 cents to spin your meter backward. About seven or eight years ago, we switched to NEM2, Net Energy Metering 2, and there was nearly a 10% tax put on solar. I'm simplifying that, but that's the general outcome: about a 10% tax on those electrons. If you paid 40 cents for electricity, you'd probably get 36 cents back for spinning the meter backward. That changed in April of this year when the utilities and the government decided to tax solar systems to 90%. Wow. 90%. So think about that. Is there any industry you know that's taxed at 90%? I can't think of any. And it's in an area of renewable energy where we're trying to cut greenhouse gases and climate change, so it's odd to go from 10% to 90%. Right. Now, most people would say, why is that going on? There are reasons behind it that are probably too detailed here. We have to get to a point where that is going to happen. The problem is going from 10% to 90% is not good overall for an industry. So that's where net energy metering stands today.
The biggest myth has always been that solar is expensive. So one of the reasons I started this company 16 years ago, before there was any financing for solar, by the way, was because if you financed a solar system, you took a HELOC out on your home, a home equity line,, and financed your solar system, you would pay for it in somewhere between a five and 15 year period of time. And so if you think about what, as a homeowner, your energy cost is, and what your loan is that you have with the utility, it's a lifetime loan. You're always going to pay your utility forever. And the price is always going to be higher year after year. So, most people think solar is just for people who have a lot of money, have big homes, or can afford a lot. And the truth is, it's just the opposite. It's for anyone with a substantial electric bill, over $100 to $150 a month. They will save money today on getting a solar system; after that five to 15-year period, they won't have an electricity bill. They'll have zero. So it's one of that kinds of no-brainers, and once people look into solar and realize that, everyone moves forward because the typical thought is it's too good to be true, and it's. It's not the case, just that the finances work that way. And are there any federal tax credits available for Solars? Yeah, so there's, so the Inflation Reduction Act from last year just extended the tax credits of 30% for another ten years. So we've got nine years left on them. It's been about 30% for a while. And a tax credit means it's not like a tax deduction. It's dollar for dollar. So, for every dollar you would owe on your taxes, you would get a tax credit. So it's real dollars. So if a solar system costs, say, $10,000, you will get a $3,000 tax credit from the federal government at the end of it.
So the first thing we must do is ask many questions, right? We have to understand what they are trying to accomplish. Sure. And… So many customers now purchase batteries, making that whole thing more complex. Why are they getting batteries? Why are they getting solar? What's the ultimate goal? So, from a simple standpoint, they're probably trying to get rid of an electricity bill. But more to that, are they trying to zero out the bill, or are they trying to get the best return on investment? Those two things are different. They're very different things. So we have those conversations with the customer. And after that, then we designed the system. Now, logistically, the roof can have limitations to that. So I mentioned we want to put things on southerly facing roofs. So they might have a thousand-dollar electric bill, which is uncommon in this area. And they've only got roof space to fit 30 panels up there, and they want to zero out their bill. So, they would need 40 panels to do that. So sometimes that can't happen. So then you kind of talk through that issue. And there are varying different products too that you need to talk about. So if that issue exists where they want more solar than they can feasibly fit up there, you might look at more efficient solar panels. , therefore, you might get a couple of extra kilowatts out of something by putting more efficient solar panels up there. Now you pay a little more for that. It might reduce your ROI, but it'll also lower your bill. So what's the real want from the customer? The other part of this is the battery storage. Because Net Energy Metering has changed, battery storage is a key component. Because we don't really wanna put electrons on the grid anymore, because you're taxed at 90%, you don't get any value of it, so essentially, you're just giving those electrons to the utility. No one wants to give anything to the utility, by the way. Yeah. And so instead of doing that, you put it into a battery. I see. Which then shifts when you're going to use that power. Oh, I see. Okay, so what ultimately happens is during the day when you're overproducing, and you would normally spin the meter backward, instead of spinning it backward, you dump it into a battery. And then at five o'clock, six o'clock, seven o'clock at night, whenever the sun goes down or your energy usage might go up, you come home from work and start using energy. Then, instead of buying power from the utility, you're now buying it from the battery you had stored from early on. So it makes for a nice even grid scenario, which is good for what we need as a society or planet. You want your energy usage to be flat in general, and batteries give us that ability to do that. It also gives us the ability to keep ourselves away from wildfires, brownouts, blackouts, and all those kinds of things to give ourselves the energy independence that most people feel like they need these days. Right. The trust in the utility has certainly gone down when you live in an area like this. You don't want to have to live like a caveman or cavewoman. Right? So, having a battery helps with that situation. So, are the batteries powerful enough to carry the entire home load? It depends. It depends on the load, and it depends on how much you've stored in there, and depends on what the goal is ultimately. So the short answer is, yes, you just add more batteries. I see. Adding more batteries might mean you have to upgrade your electrical panel. So it might mean that. It might not mean that. It just depends. So, the more electricity you're flowing through your home, the more you might need to alter things. But one battery will certainly give you the power to power essential things in your home. Essential things, by the way, are not air conditioners. Right, okay. But they're going to be your internet, your lights. You can run electric ranges, that kind of thing. So, it's the basic stuff you would need to get through that hour or 10 hours of a power outage. One battery can do that. Now, many people want more than that because they want to power more, or maybe they've got six or seven bedrooms in their house, and they've got circuits all over the place, so they need to back up more, so sometimes you need more. So that's part of what this process is. When most homeowners call us, all they think about is I want to back up the power to the home, right? But that's a very simplistic way of looking at it. So, we must have lots of dialogue about what that means. Does the fish tank have to be powered, or doesn't it? And if the fish tank does, what circuit is it on? Right, and what circuit is that attached to if I'm backing up the fish tank? That might be connected to the microwave and some Lights, so I'm backing up all that because it's already on that circuit.
Yes, yes. So I just put a battery in my home, and I'm backing up my charger because I want when the power goes out, I want to be able to charge my car. I don't want to be stranded. So, it's a widespread thing. But that's where you typically get into extra batteries because EV chargers and charging a battery is a higher load pull, as you can imagine. It's like there's more electricity flowing there. Right, right, right. So, one of the higher wants from a customer is to back up something like that. And that's only going to get more outstanding.
Yeah, so it's interesting. When I started the business, there was this expectation of Moore's law growth in solar, meaning that we would have, 16 years ago, 200, 250-watt panels. And so there's an expectation we'd have 1000-watt panels in three, four, or five years because that's what Silicon Valley has taught us to expect, or Gordon Moore taught us to expect, right? And the truth is that's not what happened. So today, those 200, 250-watt modules are 400, maybe 425 watts that many years later. So it's gotten incrementally better and continues to get incrementally better, but there's a limitation to how much more solar panels can get efficient. There's just a technology that only takes you a certain distance. And so where the real advancements are coming in, how batteries are incorporated into it, how batteries work and what batteries can do, and the brains within the batteries. So batteries, for instance, have a new thing. Probably a year or two ago, one of the battery companies came out with a thing called StormGuard, which means that the batteries connected to a weather app. And when bad weather is coming in, it stores more power than necessarily using it later, like I had described earlier, where you use your power later in the day. It might store more, and then you just buy power if the storm is coming that night. So then, if the power goes out, the likelihood of that going out is higher. And then it is smart in that way to understand. So you'll see many things that help us be more efficient, how the electrons flow within our home to make it commonsensical. That's interesting. And how does Clean Solar stay on top of that ever-changing technology? Yeah, so there's a few things. So, in the solar industry, people within the solar industry call it the solar coaster. I see. And it's because things are always changing. Just when you think you understand and know something, it changes drastically. So, net energy metering is a good example of that recently. From a technology perspective, because we've been around so long, I run the Bay Area chapter of CALSA, the California Solar and Storage Association. So, that group is essentially the big trade organization for California solar and storage. I get to see many things coming down the line a little more because I'm a part of that. And so, things like new inverter technology and new battery technology are coming out. I just naturally get to see it through that. There are natural things we do, like trade shows, reading publications, and just being in the know. And then the last thing I would say is we're the largest local solar installer in the Bay Area. So companies like Tesla and Sunrun and whatnot are national figures, but we're local to this area. And so, in this area, we're the poster child for a local construction company. And so everyone wants to sell us products. So anytime anybody has anything interesting, they're knocking on my door. So I don't have to go searching too hard because we do enough volume here, being the size that we are and our reputation in the industry, that it naturally affords me the ability to see and understand what is coming. Technology and coming changes in the industry because the industry's infrastructure is constantly changing.
Yeah, so I think most people are familiar with global warming and all the things that cause that, and brown power is not good, and green power is good, right? Everyone, I think, is kind of familiar with that philosophically. But I think it's a little more than that. So, if we think about how we are as Americans, we like to own things. People wanna own homes, right? We wanna own our car, right? And we want to do those things because we wanna call them ours. And electricity is continually being taken away from us, or at least threatened to be taken away from us, right? And so to own that piece of it, I think it's vital to the emotional core of who we are as a society here in America. I see, I see. But, and so we need to get rid of greenhouse gases. Solar and wind and tidal generation and all that kind of stuff are all super important. But by the way, solar's not the only thing that people can do and not the only thing that's gonna get us over the hump, but it is a critical factor in that happening, and it's probably the easiest thing for a homeowner to do that or maybe buy an electric car. Those things are easily approachable and easily understandable to do. And so it's how people feel like they're not only owning things but also contributing to a greater good, right? And so I think all that is super important here in America and the message we send to the rest of the world.
So the thing that Clean Solar has hung our hat on forever is we just try to be the best. So, if you go and look at our ratings and all the different rating sources out there, we're at the top of everything. So, in our industry, what most people don't know is in the 16 years we've been in business, When I started, 663 solar installers were selling solar in the Bay Area. Of those 663, 16 years later, there are 12 still standing. So, there's a 98.2% failure rate in our industry. 98.2. I don't know another industry with that kind of failure rate. It's higher than the restaurant industry, which is typically considered a high failure rate. So the fact that we've survived that long is, I would attribute to the fact that we listen to homeowners, care about what they want, and do the right thing. It doesn't mean we don't make mistakes. It doesn't mean we won't do something that someone doesn't like. But as long as we come back and do what's right in the long run, that's what I think we've done consistently for 16 years. And I think all of our awards that we've gotten. We have a litany of awards that you can see on our website or I could list off. But those types of things get that third-party recognition, and then the homeowner feels how we deal with them. I've been thinking about this a lot lately. So I'm a consumer just like everyone's a consumer. And when we buy things, we buy a refrigerator from Home Depot. And what happens if something goes wrong in that refrigerator or it starts making a noise? What do you expect when you call Home Depot? Big companies are training the consumer to not expect very much from them. And they're expecting the consumer to do all the work. Take the refrigerator apart yourself fix the fan yourself, right? That's what it feels like big companies are doing as they push the problems away. So your home is super intimate to everyone, right? And so to have a contractor that is there not pushing the problem away, but wanting to hear what the problem is that we can solve, I think we're gonna see a resurgence of that, over the coming decades with local business, whether it's contracting or selling cookies or whatever, any of that stuff, that there's gonna be more of a personalization that people start identifying, that there's a value proposition to that. Right, that we're not getting from the big companies.