May 30, 2023

Nick Kadlec, CEO, New Mexico Solar Group | EP144

Show Notes
Transcript

Welcome to the latest episode of the Clean Power Hour! In this episode, we take a deep dive into the New Mexico distributed solar industry. Join our host, Tim Montague, as he explores the current status of the New Mexico solar market and highlights the innovative efforts of the New Mexico Solar Group with their CEO Nick Kadlec.

Nick Kadlec shares his journey and transition into the solar industry and how he quickly rose to the role of CEO of the NM Solar Group, an employee-owned (ESOP) solar installer based in Albuquerque, NM. Founded by Ryan Wallace in 2015, NM Solar Group has helped over 5000 homeowners own their own energy with solar.

We also delve into the New Mexico solar landscape, exploring the various solar incentives and opportunities available in this promising market. From tax credits to net metering, we uncover the factors that make New Mexico an attractive destination for solar enthusiasts and environmentally conscious individuals.

Ever wondered about the significance of Pearl Certification? Look no further! We break down the meaning and importance of Pearl Certification in the context of the New Mexico solar market.

But that's not all—we also examine the general reception of solar energy in New Mexico. Gain insights into consumer thoughts on different brands and technologies, and discover the advantages and importance of SolarInsure.

Tune in now and become a part of the clean power movement!

Key Takeaways

Nick Kadlec’s solar background
The status of the New Mexico solar market
What New Mexico Solar Group is doing
What makes New Mexico Solar Group different from the competition
Solar Incentives in New Mexico
Meaning and importance of Pearl Certification
The general reception of Solar in New Mexico
Consumer thoughts on different solar brands and technology
The advantages and importance of SolarInsure

Connect with Nick Kadlec on LinkedIn

New Mexico Solar Group

Follow New Mexico Solar Group

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Connect with Tim

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The Clean Power Hour is brought to you by CPS America, maker of North America’s number one 3-phase string inverter, with over 6GW shipped in the US. With a focus on commercial and utility-scale solar and energy storage, the company partners with customers to provide unparalleled performance and service. The CPS America product lineup includes 3-phase string inverters from 25kW to 275kW, exceptional data communication and controls, and energy storage solutions designed for seamless integration with CPS America systems. Learn more at www.chintpowersystems.com

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One thing that I mentioned Pearl being maybe my favourite product and the reason I said maybe my favourite product is we have another product that's amazing that somewhat neutralises that concern for people. And that's solar insure. And I'm not sure if you're familiar with that product. But what solar insure does is it's another third party and they provide, basically, they extend the warranties the manufacturers warranties out to 30 years.

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Are you speeding the energy transition? Here at the Clean Power Hour, our hosts, Tim Montague and John Weaver bring you the best and solar batteries and clean technologies every week, I want to go deeper into decarbonisation. We do too.

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We're here to help you understand and command the commercial, residential and utility, solar, wind and storage industries. So let's get to it.

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Together, we can speed the energy transition.

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Today on the Clean Power Hour, the New Mexico solar market, New Mexico is near and dear to my heart. As many of my listeners know I grew up in Albuquerque. I'm a Midwestern er by birth. I was born in Indiana, but I spent 12 Lovely years in Albuquerque. And my father was a professor at UNM Albuquerque. So that's really where I got my exposure to the solar industry was at the energy fair at UNM in 1975. But my guest today, is a veteran of the solar industry.

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And he runs a wonderful EPC called the New Mexico solar group. His name is Nick Kadlec.

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He is the CEO. Welcome to the show, Nick.

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Thank you, Tim.

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Great to hear your background about you know, from New Mexico, and where are you? You know, basically, that just started in Mexico at that UNM fair, I went to UNM got both my degrees from UNM are born and raised in New Mexico. And that's also where I learned to love solar getting solar in my own house about 10 years ago. And so definitely love to be with another not New Mexican, but

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I can't call myself a new Mexican. And I've frankly, I've, I've, I've lost most of my connection to the state, but I have great stories, and and hopefully some new friends. So let's get into it, though. Tell us a little bit more about yourself. How did you come to New Mexico solar group?

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And, and, and then we'll dive into what you guys are all about. You're very, very unique company. So I look forward to to bringing this to our audience.

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Yeah, no, that's great. And yeah, so it's a little bit of my background, probably don't have a traditional path to solar, I'll do, what I found is a lot of people in solar don't have a traditional path. With a being somewhat of a newer industry, a lot of people have changed professions going into solar.

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But for me, what it was is I had a completely different career that I actually really enjoyed.

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I was a school counsellor for about 13 years. Like that job.

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Loved it. For the most part, every job has things you don't like about about a loved it. But what happened is, in 2013, I got my own solar system. And my my undergrad degree was in environmental science, so there's always a pull for me, and doing something good for the environment. That's how I originally saw myself going before I went into the school counselling domain. So you know, from my own home, I looked into it, I think around 2010, it was still pretty expensive. I wanted to do it, but had a young family couldn't afford maybe a little higher bills. So decided to put it off. But by 2013, I looked into it again. And it was like, we're gonna save money. And it's good for the environment. And it just, it was just a no brainer product for me. So I was really excited to go solar for myself, with solar had a really good experience with it. And kind of from there, I wouldn't stop talking to other people about solar. So as I mentioned, I was a school counsellor. Education can be a great field, but it's not known to be a great paying field. So I waited tables, even since I all throughout college, and even once I became a school counsellor, I would wait tables, and in the summers, evenings, weekends, so I'm at my waiting tables jobs at the 66 standards, which is a great 50s diner down in downtown Albuquerque. I don't know if you ever went there, but it's a great, great place.

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They're still open too. So give them a plug. The 66 Diner. Oh, no, I haven't been there. Yeah, so if anyone's travelling to New Mexico, it's a great place to go get a burger and shake and all that. So I worked there for about 15 years. While I was a school counsellor, and I was waiting tables one night, and I was talking to I remember I was actually and it was after the shift was done. I was talking to my general manager there. And I was telling him for the umpteenth time about how he should go solar. And, and he told me he I just remember specifically he said you should sell solar panels, you know, and I remember he planted that seed.

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I didn't go out and get a job the next day, but I still remember that conversation. And I don't know if it's a month or two later, but I did Go get a job. Unfortunately, I replaced the job waiting tables so he can. I don't know, it's kind of out the door. But it worked if it was by no, no, it wasn't. But

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the restaurant I do remember is called the frontier, which is right by campus. And we called it the plastic fantastic. I'm not sure why my family called it that was that a nickname for that restaurant, but they had wonderful sweet rolls. That's how I remember the tough the front end.

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There's sweet rolls or cinnamon rolls are great. And yeah, they're just up the road from the diner, right? Maybe not even a mile up the road, I would say. But yeah, it's a great place. It's a great Hangout, too. But yeah, so I switched to selling solar on the weekends and evenings started with a national company. They were actually the only ones that would give me a shot, everyone wanted me to have experience selling. And I didn't, I thought I tell them I remember I have good customer service experience. I've waited tables for 15 years, but they wanted a proven track record of selling.

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So a national company gave me a shot it was called Xen. They since merged with vision to become ion solar, and they're still around. But that was who I had my first my first job selling solar with, did that for about six months with them. And basically, I, I, my end goal was to sell for a local company. It just was more aligned with the way I wanted to do things and the customer service and all that. So just by happenstance, my sister was she's a mortgage officer, and she had just switched to a new mortgage company. And just by coincidence, the owner and founder of New Mexico solar was getting his mortgage licence so that he could do a mortgage product that wrapped solar into mortgages. The sad thing is that product never got off the ground. But the good thing is, it got me connected to him.

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Because when my sister mentioned, you know, he brought up that he had a solar company and my sister mentor, my brother sell solar, but he's kind of looking to change companies. And she got us connected. And so I started selling for nm solar group, in 2000, ended 2016. And basically worked my way up, I was still doing school counselling, part time, I was doing both jobs for about two and a half, three years. And eventually, I made the full jump, went from sales rep with the maximum solar group to sales manager. And then in the summer of 2018. Ryan came to me and he said, Hey, I'm looking at selling the company, but not to somebody else to you guys as an ESOP. And he asked me if I wanted to be the CEO, and my first gut reaction instinct was like, No, I can't do that. I'm right now just trying to get my legs under me, as far as a sales manager, you have to talk to somebody else about the being the CEO. But thank you, of course, had more time to think about it. That was kind of towards the beginning of the summer of 2018. By the end of the summer, you know, I had thought about it more, he had thought about it more. I don't actually don't know who he talked to, didn't talk to, but he came back to me again, at the end of summer said, Hey, I really think you know, we've already gone further down the path of the company being sold to us. And he said, I really think that you should be the CEO. And I really want you to.

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And so we I actually again, I'd had more time to think about it realised I'd had more time to learn about employee ownership, most importantly, and how awesome that was, and realise the opportunity that we're about to have as a company and see the opportunity that I had to try to lead that. And the second time around, I said, Yeah, I'll go for and what we did is we arranged a kind of a two way trial, a six month period where I was interim CEO, I'm sorry, ce o for three months, and then interim CEO for three months, which all culminated, and in May of 2019, with me becoming the CEO of nm sola group, and at that point we'd already been employed on for about six months.

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I'm a huge fan of Aesop's. For anyone who doesn't know, if you want to keep a company in a location, an ESOP is a great way to do that.

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Because then the employees have a vested interest in seeing the company flourish, and they don't want to go anywhere else there, they've carved out a life in a place. And it's not that you can't expand into other markets, but what will tends to happen is a company will get acquired, and then they'll move the, you know, HQ to some other place, and then it's a totally different company, but it's a great way to empower employees to have skin in the game. Yeah, you're gonna get, you're gonna get better, harder work out of your employees if they have that kind of skin in the game. And there's just no buts about it. So

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definitely, and I know that was, if I didn't mention his name already, I should have Ryan Wallace was our owner and founder of the company and I that was one of his big, big pushes was and reasons for doing an employee for selling to the employees was his mentality was the police helped me build this. I'd like to give it to them and allow them the chance to help it flourish and get the rewards that come with employee ownership versus sell it to somebody else and who knows what they do with it, right? You know, he's either way he's going to he's going to successfully sell a company and get the rewards from that. But one way you allow the employees to get those rewards employees that built it. And the other way it's, you know, who knows what happens, right? It could end up being a really great situation for the employees. It could be something where things change after the ownership, which often happens, right? So we always have appreciated that he did that for us, sold it to us. And we tried to make him proud with how we've run the company and what we've done so far, the last almost five years. It'll be five years this, this may here. So

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yeah, well, that was very thoughtful of him. He knows a lot about him. And but let's talk about New Mexico solar group. New Mexico is a large state with lots of solar resources, but a small population. I think the whole state has what a million and a half, something like that. And it's

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somewhere in the high twos, I believe now. For compared to the acreage, we definitely it's low population.

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But it has a burgeoning community solar market now. I think you're in the pilot phase still, but But you know, the writing's on the wall, but there'll be a robust communities community solar market, which, frankly, everyone in solar loves community solar, because it just democratises the access to solar, you don't have to own a home, you don't have to have a sunny roof. You could live in an apartment. You could not want to instal solar on your building or whatever, right?

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Anyone can participate in certain jurisdictions. It is jurisdictional, generally speaking. But so let's talk about the market, though. What is the status of the New Mexico solar market? You guys work in?

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residential, commercial? And community? Solar? Yeah. But what? What's going on in the Solar World in New Mexico, and then give us a little bit of the scope of your operation?

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Sure. So Mark, it's great. And like you said, we are in residential, commercial and just getting into community solar. So we're about 90%, residential 10% commercial, although we've been increasing year over year, our commercial footprint. And then as far as the community, yeah, they're about to in about a week here.

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They're going to let let everyone know the finalists. And we have COVID, with another company out of Colorado named pivot. They're a great company, great partner. And we're hoping to get some some sites with them for the community solar. And just going back to that real quick. You mentioned, everyone loves community, solar, and I'm definitely in that boat. One of the things I drove me nuts when I first started selling solar was when people would want to go solar. But they couldn't, right.

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They didn't, they didn't own their home, obviously, you know, I part of what I did is door knocking. And that was part of our model. It still is part of our model. And when you knock on someone's door, and they're not the owner, right? They rent, right? So they're out right? Or or they, they they're interested, but they have, you know, they don't have great credit. I would always drive me nuts. When I couldn't help someone go solo, I wanted to go solar. So community solar is a great solution for that, right?

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It's a low, not not even low cost into the low costs, it saves people no risk, the contracts are really short for it as well. And they can they can have access to renewable energy. So it really does, like I said democratise and bring solar to anyone who really wants to get it. So love community solar, we're really excited to see what happens in that area.

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It's a pilot programme. So we needed to go well, and I know we have a really committed group of solid professionals in New Mexico, local companies, local leaders of our local companies Annamaria. And was was really instrumental in helping getting that legislation passed. And that's the Renewable Energy Agency Association of New Mexico. So it actually been, they've been trying to pass that for about 20 years. And in. So it's great to see that finally get passed. And they've really helped work. And there's been subcommittees that have worked with the state on getting the rules written in a way that benefits everyone. So we're really excited to see it happen.

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Again, they're about to do the rewards in about 10 days here.

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And that's going to be exciting.

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It's 200 megawatts of solar over the next three years. It's a pilot programme. So if it goes well, we'll be able to disguise the limit on what we can do with community solar.

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And those are those 200 megawatts or those two megawatt projects or what's the scale project?

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The largest they can be as five megawatts from everything we've seen, and even the ones we bid on all of them around the five megawatts. So there might be some smaller ones that that get awarded that aren't quite five megawatts, but for the most part, it's going to be about 45 megawatt projects.

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Yeah, we're and you mentioned the areas it's basically it's going to be in the three major utilities here, which is PNM XL and El Paso electric in those areas. So we'll work on seeing getting into some of the co op areas as of now they had to opt in. But I think after the pilot programme and see how that goes, I think we'll have more more opportunity around in the in the co op areas as well.

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Yeah, very cool.

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And Yeah, go ahead. You, you you're you have several offices around the state. So you're, you cover the entire state of New Mexico, which is amazing because it's a big state. Talk a little bit about that. And, and I'm very curious about that split 9010 residential commercial. I imagine that means the roots of the company were You were you were a pure residential company when you started.

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Yeah, so pure residential. And we've just been, you know, slowly getting our foot more in that door for commercial. And so basically, it helps diversify. Obviously, there's a lot, a lot of opportunity to commercial, but we have to build up, you know, slowly over time, our capacity, our abilities, and we did just lend last year, we're actually just finishing putting the final touches on him getting them interconnected here, a couple of big dairies out in Clovis, New Mexico. So that was pretty exciting. One for about 300 kilowatts and change and then another for a little over 700 kilowatts. So together, they were a megawatt of solar. But we've done some other really cool projects, les combs is a local winery. And they also have, they also have restaurants around the state as well. And so we did a 272 kilowatt job down in Deming, New Mexico for the winery, and we're currently doing the actual vineyards. And in Lordsburg, New Mexico, so we it's one of their goals to go sustainable company wide. And we're helping them do that.

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We've got some quotes for some of their restaurants as well, where it makes sense. So but yeah, we've been inching our way into commercial as we can build up our capacity and, and show and, and show businesses Hey, yeah, we we've done this, we can do it. And we can do it for you.

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So but yeah, it is 90% residential, what we're planning on getting further into the commercial, but residential is our bread and butter, and it's going to continue to be our main area. And so we did start in Albuquerque. That was in 2015. I don't think I gave you that date earlier. But we actually moved down to southern New Mexico, where we saw a huge demand down there. And that was actually Ryan Wallace, he saw huge demand, we actually opened our first building in southern New Mexico and Alamogordo in 2017.

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And we serve as kind of the Las Cruces area, it's our next biggest city down to the south, and Alamogordo and kind of the surrounding small towns of that area. And then about a year later, 2018, we went into the El Paso market, which I don't think I've mentioned yet before, we're actually in El Paso, Texas as well. But we are and we also went into eastern New Mexico at the end of 2018. And we have an office in Roswell, as well to for the southeast, only area of the state that we're not going to have a big presence in we don't have any buildings in is the northern part of the state, we'll do instals up in the northern part of the state, but they're just now opening up changing some of their policies to be more favourable to solar up in the Farmington area. And so we'll be getting our foot in the door there as well. But we'll do instals up there. We just don't have a big presence as far as like an office in operations out of a local area there. But that'll come soon.

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I'm sure.

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Alamogordo for anyone who doesn't know is famous because of the Trinity test, and White Sands. So there's a history with the nuclear industry there in southern New Mexico. And you can you can you can visit a museum and see models of the the very first atomic bombs. But so I'm curious, how does residential solar or commercial for that matter? Maybe we could talk about both pencil in New Mexico.

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One of the challenges with solar is how quickly does it pay back for a consumer who's going to invest? And that is different.

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Depending on the price of power, and the incentives like the ITC, right, we have a 30% investment tax credit, which is a great booster. But in general, what do you find in the New Mexico market in terms of a payback period? And and what could a consumer the average consumer save with a residential solar system?

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Yeah, and there's so many variables that go into that on the residential side and the commercial side, but I would say if you want to arrange it's probably seven to 12 years return on investment. And of course, a lot of our customers get, you know, return on investments typically a cash mechanism there but a lot of our customers get loans and and basically the loan, the loan amount for a solar loan is less than their power bill. So there's savings right away. But if you're looking at a purely cash return on investment, anywhere from seven to 10 years and the things that are going to change that are just the electric company's policy as far as how the net metering works, our biggest, our biggest electric company in the state PNM, they have a really good net metering policy. It's dollar for dollar kilowatt for kilowatt.

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And they also have a three tiered system where the more you use the more they charge you as you go through the tiers. So for someone who has really high use They're going to, they're going to save a lot more, because it's going to so it's going to help them if they go 100%, it saves them the most. But it can also keep them out of that second and third tier where they're paying a lot more per kilowatt hour.

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And so it's really the return on investment and how quickly saving them once you say really depends on your electric company, their their net metering policies, and also how much how much you use. But again, it's It runs the gamut, sure, and saves for almost everyone. And that's one of the things we do when we meet with someone's we educate them on, you know, here, here's what you could save. It's very rare that someone you'd have to I did have a neighbour, my neighbour and next to my house, when I first that first was stolen, her her bill was only $30 a month. And I remember when I met with her, it was like you're not going to save it have to just be for environmental purposes, right.

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And so but you know, other than those really rare circumstances with a really low usage, and then of course, if people can utilise the tax credit or not, will will change the calculus and change how it pencils out.

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If they don't have enough taxable income, if they're not going to be eligible to use the tax credits, that's going to slow down their return on investment for sure and make the savings less but I would say average range seven to 12 years on return on investment.

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And that's I think that's fairly typical. That's certainly the range. You know, here in Illinois, it can be a little shorter, but we have renewable energy credits. Are there any other incentives in New Mexico besides net net metering, it's great to have a good retail net metering law, really a foundation, if you don't have net metering, you probably don't have a robust solar market, you see all the hoopla about nem 3.0 In California, where they're devaluing net metering by 75%.

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And, and so that really does hurt the ROI when you when you can only get quote, unquote, wholesale value, because it's a vastly different value that you then get for solar electrons.

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And, you know, unfortunately, as markets mature, the rules around net metering tend to get more restrictive. And that's, and that's written into many places like here in Illinois, we have full retail net metering for the moment. But once we reach our 5%, of grid power with solar, then it starts to step down.

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And, and it does then slow the payback. But are there any other incentives besides net metering and the federal incentives, which of course, are also very generous right now?

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Yeah, so we have a state incentive that God repast, it had been passed for about 10 years, but it expired in 2016, and got repast in 2020. And that's a great incentive. It's 10%. It was originally for the first, I guess, just the first year, it was similar to the federal tax credit, and that you had to have the tax liability to recoup it. They did change it in 20. Actually, last year, so for two years, it was that way. And 2022, the legislative session of last year, they changed it to where it acts as a credit if you can use it as a credit. But if you can't, you can basically get it as a rebate. So they made it to where it's in. Basically, people that can't qualify for it as a credit can still get it, which is great. And then they also increased the pot of money from 8 million to 12. money last year, so to 12 million. So it's 12 million. It is a first come first serve basis. We're working on getting that to work and rollover from one year to the next. But it's a great incentive. As far as 10%, you can, if you can't get it as a credit, you can get it as a rebate. And it's $12 million pot each year. So that's it's a good amount of it's a good amount of money to help incentivize people to go solar for sure.

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Very cool. You offer a variety of services, I'm just looking at your website, check out New Mexico solar group.com. And I want to talk about some of this stuff, though, you've got something called Pearl certification. And you've got financing options, we should talk a little bit about that. That's a very hot topic in especially residential solar.

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Because as you mentioned, consumers are generally going to want some assistance to make the purchase. And but then you also mentioned monitoring systems, Tesla Powerwall. So batteries, and even charging stations. What exactly is Pearl certification?

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I'm not familiar at all with that.

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It's possibly my favourite product that I've run across and it's because it has a personal story in my past that that made me so excited when it came out as a product. So that first summer when I when I sold about 12 systems with that, that first company I was with, and one of them I think was my third or fourth system was to a friend of mine who had went to high school with we've kept in contact and you know, so I sold him a system. And one of the things in the the basically that the company that I zing they had very little packet that talked about, you know, walk people through the savings and all this stuff. And in his cited this study that was by it had a bunch of different entities and I remember being really excited about it, but it was, it was enrol in our own New Mexico, Sandia Labs participated in a bunch of colleges participate in it. But it was a study a longitudinal study about the you know, the value that solar added to people's homes. And I remember it was 22,000 homes.

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18,000 had did not have solar 4000 had solar. And I don't remember, I might flip these numbers, but it was a 12 year study over eight states or an eight year study over 12 states.

00:25:40.650 --> 00:26:19.980
But whatever it was, it basically, I remember if I remember the details, and then I'm saying, for kilowatt around a four kilowatt system would add about $15,000 to your typical home. And so we use this and I use this and all all the people I talked to, hey, this should add to your home. This is what this study says. And so I was pretty devastated. When about a year later, my friend called me up and he was selling his home and his wife were moving. It was kind of an unexpected move. They hadn't anticipated move it so quickly. But he said, Hey, my realtor saying that in the appraiser saying I'm only going to get about $3,000. That's that's all the soldiers added.

00:26:17.609 --> 00:27:26.640
And then you'd mentioned this much higher amount. And when I mentioned that, I believed it, I believed to get something around that right. Yeah. So so that was pretty I remember at that time, I was already the I was already the sales manager at an M solar group. And after I got that call, and he told me about that experience, I do remember instantly, the next day, when we had our sales meeting with our sales guys, I said, Hey, guys, and you know, that was something I shared with that sales team, hey, you can point people towards this study. And so I said, Hey, you know, that study is there, but reach makes sure that you tell people, you know, it's not a guarantee, you're gonna get that it's possible to get to get less. I mean, my friend just told me he got a lot less. So you know, you can you can reference that study. But it's really important to put the content, the proper context around it, that is not a guarantee. But what really bothered me was that he got a lot less for a solar right, then then it really should have been valued at and it was like, end to what it came down to is. And it's in newer markets where there's not a lot of solar. You know, I'm not from the real estate background, but I know enough to know that when they when they're doing appraisals, they'll look for comps, in that comparable homes with similar features similar square footage.

00:27:26.789 --> 00:30:30.029
Sure. One of the issues is there's not if you're in a market that's kind of newer, there's not a lot of comps that have sold with solar. And so appraisers can really struggle to value solar correctly. And when they're when they're not sure about how to value it, they depth, they typically undervalue it. And so that's that's happened a lot in New Mexico. So about three years ago, it was the summer of 2020. A guy John Blattner, he was with Perl certification. And he reached out to me to tell me about this product that pro had which is pro basically they're a third party, they do certificates for green features and homes, I think they have I can't remember at 17 or 27, green features that they do certificates for, we only use one of them which is for solar so but the the way it works is they they they only work with certain companies, they vet your company. And and they decide if they'll provide certifications or certificates for your you know, your company and the products that your company instals. And what they do is they they'll give each one of our at the end of the at the end of the month, we take all of our instals we take all the data from ourselves, we send it over to Perl. And they they developed this certificate, the really great thing is they're a third party, but they developed this certificate with industry and governmental and industry, reputable governmental and industry entities. So just a few examples, the National Association of Realtors, the Appraisal Institute ENERGY STAR Department of Energy, they worked with those entities to develop their certificates and and including their solar certificate. And what they do is they provide a certificate that gives you a range of values that your solar should be appraised at. And it's based on that specific system specifications, the panels that were used, the inverters that were used, and the estimated production. And because basically sent all our information about this system over to them, and they give us they give our customers a certificate that gives a range of values a low, a low, a medium and an expected value. And it doesn't guarantee it and we're really careful to tell our customers this doesn't guarantee you'll get this value. But what it does is it provides a framework for an appraiser to appraise it at the correct value. And and what we have found over the last three years that we've been using them as anytime that our customers have used that certificate, and sometimes it's taken an extra call to someone at Pearl there was a really great with supporting the end user as well as the company that gets the certificates. But anytime that that's been used, people have gotten the value of their solar sometimes right at where the value minus the tax Got it, we've had a few instances where they get the value beyond the tax credit. And it's always been in that range of values that they give. And it's a huge difference from the 3000. My friend system was about a$20,000 system that he paid. And so you know, even based on that, and I remember his was about five kilowatt system. So, you know, based on that study, he should have got somewhere between 14 and 17,000 or so when he got 3000. Right. With the pro certificate, he would have gotten that 20,020 17 to 20,000.

00:30:24.210 --> 00:30:36.059
So it helps people get if they refi or sell their home, it helps give them a mechanism to get the value of the so that it's really worth

00:30:36.119 --> 00:31:52.259
the Clean Power Hour is brought to you by CPS America, the maker of North America's number one three phase string inverter with over six gigawatts shipped in the US. The CPS America product lineup includes three phase string inverters ranging from 25 to 275, kW, their flagship inverter, the CPS, 250 to 75 is designed to work with solar plants ranging from two megawatts to two gigawatts, the 250 to 75. pairs well, with CPS, America's exceptional data communication controls and energy storage solutions, go to chin power systems.com To find out more. Yeah, so the analogy I, I think of is Kelley Blue Book for for automobiles, and this is the Kelley Blue Book for solar, which I did not know existed. So this is a wonderful thing, it sounds like a great platform, and way to give consumers, you know, some assurance that they're gonna get the real value of this solar project, because it you know, it becomes part of the home. It's, it's, you know, adding tremendous value, perhaps $1,000 a year worth of savings to a homeowner. And so you really do want to want to get that added value. So that's great.

00:31:52.619 --> 00:31:56.759
I never thought of that analogy. I love the Kelley Blue Book analogy, right.

00:31:54.750 --> 00:31:59.880
Especially because people know that pretty well. Right? And that's a great analogy. Yeah.

00:32:00.390 --> 00:33:06.630
And so, let's talk about some other aspects of the company. And and, you know, you're you're partial to certain technologies. I see. You mentioned solar edge inverters as well as a micro inverter manufacturer. But, but when, I mean, you've now you've now been in solar for, what, seven, eight years? And and so you've seen the market mature? Is, is it getting easier to sell solar, now that solar is in the news a lot more? And, and, you know, you've also seen a substantive reduction in the cost per, per watt, over that time, maybe 75 or 80%? Even. But what is your what is the company experiencing? Just I'm just curious, like, in general, with consumers, and, and we should also talk about commercial because it is a special animal.

00:33:02.400 --> 00:33:24.029
I'm thrilled that you're working in commercial. That's more my bailiwick and history in the solar industry. But what what what is the general reception that solar gets in, in, you know, let's just say Albuquerque in a big market in New Mexico?

00:33:24.660 --> 00:33:36.359
I mean, definitely, overall. Big picture. It's, it's getting easier. I mean, so it has a contagion effect. I'm when I first went out, you know, mentioned seven or eight years ago, that's as bad seven and a half years ago that I started.

00:33:36.660 --> 00:34:07.079
Oh, actually 2016. So yeah, set exactly seven years ago. And yeah, it was, you know, maybe one or two homes in the neighbourhood would have it right, two or three, maybe right. Now, now, it's like at least two or three, maybe four or five on each street. We actually have some communities in our southern market where the whole block has solar, up and down in like, 80% of it is in him. So everyone, which we love, of course, but it's got its contagion effect, I think at first people were just more sure about it. I wasn't even sure.

00:34:07.079 --> 00:35:52.710
But when I first got a quote, and got it I was positive is going to work. I thought, this seems like it makes sense. It seems like it's gonna be at sure it was gonna be good for the environment. But it seems like it's gonna save you money until you really get it installed and start seeing those monthly savings on your bill. And in that the system works and it does what it's supposed to. I think that as more and more people have adopted it, and they talked to the family and friends about it, and more people see it on their neighbor's homes. It definitely has a contagion effect. So I think it's gotten easier. It's more it's more prevalent. We've had a few and then and then of course costs have come down. And we did have basically cost for the first time and really ever in solar about two years ago, they did start to go up right with the supply chain issues. Now. We're starting to see them subside again now, but the cost did briefly go up for a little bit there and we're gradually coming down. So there was a little headwinds there. But overall, yes, it's become easier and easier to sell. And then we've been impacted a little bit by the, the interest rates and the lending products getting a little a little tougher recently, with interest rates going up starting last May. And it seems like that's kind of at the peak is going to start easing. And we've had to make an adjustment there, it's affected our sales a little bit, because we do have a lot of most of our customers do use a lending product, a lot of customers use cash, but a lot of visa lending product and with those interest rates going up, it's impacted the how it pencils out. But it's the great thing is it still saves people a lot. And even though the lending products have gotten more expensive when you factor in the interest rates and some of the fees there. All the while inflation is happening with electric companies as well, right? It's it's, it's it increases everywhere. So it's still it's still a great product, we're actually seeing a it's still a tonne of interest.

00:35:52.980 --> 00:35:54.989
And then just jumping into the commercial that you mentioned.

00:35:55.349 --> 00:36:17.340
Yeah, the other the other thing and you get asked early if there's other incentives commercialises. It's a whole different beast, as far as and in a good way, the incentives a little more complicated, but there's accelerated depreciation incentives that can really help a pencil, a commercial project pencil out a lot better. And then a huge thing that got passed as part of the IRA.

00:36:13.710 --> 00:36:46.170
Legislation that got passed last July is the reef grant, it's a it's the is already in places where you can get 20 Feds a federal programme. And you can get 25% of your system costs paid for by the federal government. And you have to apply for it. And you have to have the funds for it. But one of the things that happened with the IRA, as they increase that to anywhere from 40 to 50% of your project costs can be can be covered. And the other thing is the increased the pot of money.

00:36:43.019 --> 00:36:56.579
And it goes down gradually over the years. But initially, it goes up about four or five times as much funds for those projects. And then and then it gradually goes down over time.

00:36:53.130 --> 00:37:27.360
So commercial, especially in rural areas, is going to is just booming, we're actually seeing a tonne of interest right now. And we help companies apply for that grant, we help walk them through the process and actually gather all the paperwork alternative for them. So we've seen that be a big and that the two dairies that I mentioned, they use the REAP grant a year ago when it was at 25%. So that's a that's a big boon for us. That reef grant programme, I think we're gonna see it, we already are seeing a tonne of interest because of that amount gone from that 25% to 40 or 50%.

00:37:27.659 --> 00:38:55.260
Yeah, I'm glad you mentioned reap, it is a it's a well known programme, it just was not not very well funded historically. And now it's fully funded, very generous, you know, it can pay for us, you know, I think he set up to 50% of the project now. So it's a it's a grant. And it really helps with the cost of a solar project. So it's gonna it's gonna get a business owners attention, when you can get a 50% discount on a project. It's non trivial. Those applications are quite complicated, but they are. I want to talk about, you know, solar technology. It sounds like you're, you're partial to solar edge and phase, but and I also want to talk about being an ESOP. I mean, obviously, you're, you're pretty steeped in, in, in the New Mexico solar group world, right? That's pretty much where you've where you've cut your teeth on the industry. And I, you know, it sounds like you've, you've done very well, it's very impressive that you climb the climb the ranks and gain the trust of the founder, so quickly. And so congratulations for that. Well, do consumers care about technology is solar like automobiles where brand names really matter?

00:38:55.679 --> 00:41:15.179
And it really depends on the consumer, we definitely have, you know, some of our consumers do really care that they will really get into depth on you know, comparing panels or comparing, you know, the inversion process microinverters versus solar edge. So, yeah, some some customers really do care about that. And, and so, having our sales team know how to explain those differences. And, and obviously, we're always trying to find the best product in the best value to the customer. And the best, you know, reliability as far as those products, one thing that I mentioned Pearl being maybe my favourite product and the reason I said maybe my favourite product is we have another product that's amazing that somewhat neutralises that concern for people and that's solar insure, and I'm not sure if you're familiar with that product. But what solar insured does is another third party and they provide basically, they extend the warranties the manufacturer's warranties out to 30 years. They also extend the warranties like we do a 10 year roof penetration warranty as part of our standard contract but with Solon ensure it extends the roof and iterations, the solar penetrations that we do when we need to penetrate a roof extends that up to 30 years. But just going back to the technology part, indicate when extends all the warranties out to 30 years. And not only extending them out to 30 years, but anyone who's tried to to use a manufacturer's warranty on maybe a country that has their headquarters, even out of state, let alone across an ocean knows it's it can be a nightmare. And so one thing we did early on as a company is we'll handle all the manufacturer's warranties, right. And so the customers don't have to do that they don't have to call up, you know, when we saw some power that had to and some power actually has great warranties. But we're LG or Hyundai, they don't have to call those corporations to try to make a claim if they have an issue, or solar edge or end phase right, we will handle them on our end and work with the manufacturers. But the really cool thing is that solar insurer basically not only extends the manufacturer's warranties, they will they extend the warranties, they'll handle them themselves up to 30 years, basically out to 30 years. But the other thing they do is they pay for labour.

00:41:11.340 --> 00:41:59.760
So if we have to do a truck roll as an M solo group, we go out we we have the labour costs, we have the equipment costs, which are usually covered by the manufacturer's warranties. But basically, so insured covers all those costs. And, and again, that's for 30 years. So it basically basically makes this really robust warranty that people don't have to worry about. It's the people will still geek out on like, which which inverter, you know, is more efficient, right? And which products are better. But when you have this blanket warranty, that's going to make it to where you're going to be taken care of no matter what a lot of that's people want the best product, they want some that's reliable, but it's like, hey, we have this product where you're taking care of no matter what, whether or not enough solar group, get it people will have that concern.

00:41:57.599 --> 00:42:12.420
Well, is your company going to be around? Like, what if what if you guys go out of business, right, who's going to serve as our system? Well, you know, solar ensure actually, one of the things that they they will source somebody else to handle that if that happened, right.

00:42:12.630 --> 00:42:25.289
And then there's even another insurance company that insures solar insure. So there's these multiple layers of protection that that product adds that that kind of neutralises some of the concerns about technology. And what's better than than what

00:42:25.619 --> 00:42:50.219
I mean, again, there's there's a automobile analogy here, you wouldn't. I mean, most states require consumers to have insurance on their cars, because accidents happen things break. And it just it's a great consumer protection across the board. So is the is that solar insured product optional, though, for consumers?

00:42:47.550 --> 00:42:51.420
Or is every project you do a solar insured project?

00:42:51.599 --> 00:42:55.170
We it's included in every project? It's included in our price?

00:42:55.858 --> 00:43:04.199
Got it? Yeah, that's awesome. No, I was not familiar with solar insurance.

00:42:58.528 --> 00:43:29.579
So that is, sounds like a no brainer, frankly. So we just have a couple we just have a couple of minutes left, Nick. So what else should our listeners know about New Mexico solar group? We'll, we'll we'll let them you know, we'll give them links to your website and your LinkedIn profile in the show notes. But what else should our listeners know about New Mexico?

00:43:25.048 --> 00:43:35.789
Solar? What? What is the what are the two or three things that really set you apart from other solar companies in your market?

00:43:36.269 --> 00:44:08.039
I think in order to if I would take the time to go over the employee on part, right, because we haven't really covered that too much. So again, with our cut with our company being employee owned. Well, one all of our all of our employees live in our communities, we're very committed to our communities, we give back to our communities. So that's I guess, so there's two things, you know, we make sure that we have, especially if we're doing significant work in a region, we look at trying to have an actual physical presence there an office there, our employees, you know, live in those communities.

00:44:09.000 --> 00:45:42.869
So we're local and employee owed, and then the employee owner part. The thing I love about anything that made me want to the thing that made me really reconsider after I first said, No, I don't think I want to or can be the CEO of an of solar group was when I just realised how great that employee owner mechanism was, in that all the basically everything that our employees do to grow the company to add value to the company to save costs here are save expenses here. That all goes back into the company and it goes back to them specifically in the way it works is it's a retirement account. So we basically put money in retirement accounts. It's a long term benefit. That's the only thing that's been a little bit of struggle. It's a really long term benefit being a retirement account, but it's it doesn't come out of their paycheck. It's a lot a lot of times retirement accounts like going out of school account So I think it was anywhere from 10 to 12% of my paycheck went into my retirement account went to my retirement pension thing with as a school counsellor. This is a benefit that that our employee owners get, without having, it doesn't come out of their paycheck. It's something that they get as the company grows and grows in value. And we we take those profits, we use some of them to reinvest in the company, and we put some of them in their retirement accounts. And when someone leaves the company, or retires, they basically get that the the funds that go into that retirement account, without having to pay an extra dime at all. So it's, I love it, because it gives back to the people who built the company directly, right, there's not one or two owners that get to keep most of the most of the benefits of everyone else's hard work.

00:45:43.139 --> 00:46:08.519
Nothing against that model, that can be a great model. And people can make a really good living with that. But all that people start work, all of our employee owners hard work goes back to them in this long term benefit that doesn't cost them anything extra besides what they put into their job. And so it's been a great thing. Being an employee on for the last 2018 is when it started. So you know, it's we're just over the five year mark here.

00:46:09.510 --> 00:47:34.559
Yeah, it's a great story. And I would encourage our listeners to check out Aesop's employee stock ownership programmes. It is a tremendous way to add value for your employees, your community, and to build a company that is going to last the test of time, and really get the heart and soul of your employees behind the company. Making money is important. You gotta be profitable, and stay in business. But when when only a few owners are going to benefit from the long term of of a venture, it really is different than when the employees are those people. So that's that's a great story. Well, I want to thank you, Nick Kadlec, for coming on the show. Please check it out all of our content at Clean Power hour.com. Give us a rating and a review on Apple and Spotify. Tell a friend or colleague about the Clean Power Hour, please share this wonderful resource we bring to shows to you week in week out we do this for you solar professionals, energy professionals who are interested in our mission, which is to speed the energy transition, subscribe to our YouTube channel and reach out to me you can find me on LinkedIn or on the contact page at Clean Power hour.com.

00:47:35.099 --> 00:47:38.340
With that, Nick, how can our listeners find you?

00:47:38.760 --> 00:48:01.800
So I am on LinkedIn. I don't have my handle memorised to be honest. But the best place to find our company, which I think is most important is www.nm solid group.com. I'm on LinkedIn and at Facebook, it's I think it's Nick Kadlec CEO and I'm solid group. But again, our websites the best place for people to find our company, which I think is most important. And thank you so much for having me on the programme.

00:48:02.099 --> 00:48:14.280
And for reaching out to me and connecting in let me tell our story of an insular group, the employee ownership part but also just the other parts of our company that set ourselves apart. And just let me tell a story. So thank you, Tim.

00:48:14.938 --> 00:48:23.128
Absolutely. I want to thank all of our listeners for joining us and I'm Tim Montague. Let's grow solar and storage. Take care

Nick Kadlec, CEO, New Mexico Solar Group | EP144

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