SM: What do you think about small solar farms? Is that part of the industry’s future?
DK: Right now I think it is problematic because it is credit-dependent. When I see the future beyond the reign of coal oil, nukes, and gas, we will replace it with a distributed energy utility solution. Every appropriate home will have electricity-generating assets. That is a more consumer-friendly model because it is at the point of use. Small solar would survive in that environment.
SM: Sometimes I think we have a distorted view here in California because we have ample sunlight. Other places do not have that.
DK: It works in Germany, which has 50% of the world’s solar assets. They have lower sunlight conditions than the majority of the United States.
SM: If there is a lot of sunlight in certain places, I see no problem in harvesting that and putting it on the grid rather than relying only on distributed models.
DK: I think that will happen as a transitional step. We will get to a point where we do not rely on the grid like we do today, and this will continue to evolve. The technology is coming where every surface of a building, the skin on the windows or even the materials making up your jacket, will be photoelectric. Electricity will just happen passively. Older models will then be displaced, which is a good thing.
SM: If power becomes a surplus resource it will no longer be an economic driving factor.
DK: Which I like, from both a market and political point of view. We like to think we are democratizing the service of solar in an American setting.
SM: How are you going to scale Sungevity?
DK: Because we have built the platform, the technology costs have been expended. We can replicate the service provision through the Internet at relatively low cost. It is very scalable.
SM: Yet you need to provide the economic variables for each geography you enter, such as the tax rebates.
DK: Those are limited costs to entering a new market. We are preparing for Italy right now, and we have some consultants doing studies for us. This is simplified because we already know what we have to calculate.
SM: How do consumers and contractors find you when you enter a new market?
DK: We have a partner network building strategy. Over time we plan to scale this and get others into this game. This platform enables that. We could even do this as a franchise in some markets where others build the solar kits using their technology. They would supply us with the metrics and requirements for their systems, and we could design systems in our backend based on their capabilities. This would still allow us to use our model to interface with the customer on their behalf.
We could also provide similar organizations volume buying advantages. Companies that design solar systems, and perhaps install them as well, are capable of being supported by our software. That is something we think is a lot farther down the road, but it is feasible. The software we have built on the backend is very powerful and flexible enough to facilitate these scenarios.