Sifting out the fly-by-nights in solar solutions for homes – PowerPulse

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In the sixth episode of the Standard Bank PowerPulse podcast series, BizNews founder Alec Hogg is joined by Kevin Ssemwogerere, Corporate Venturing Lead in Wholesale Clients Digital for the Standard Bank PowerPulse platform, Nafisa Fareed, the Chief Executive of Power4Less and Nick Roche, Chief Product Officer at Rubicon Cape Town, to discuss how the PowerPulse platform is going to be extended to residential homes. As many South Africans are looking for alternatives to power their homes and to make them less reliant on Eskom, there are tips on how to sift through the many new suppliers to the solar PV market and the booby traps to watch out for. – Linda van Tilburg

Kevin Ssemwogerere on how trusted suppliers are vetted:

As was mentioned in previous episodes regarding the commercial and industrial client segments that we are currently addressing with the PowerPulse offering, we definitely vet all our trusted suppliers we introduce to clients. So similar in the residential space, in terms of the two that you’ve mentioned, they have definitely gone through extensive vetting and we’ve made sure that given all the dynamics we have in the residential solar market with the various fly-by-nights providers that are out there, that they meet the test in order for us to have the confidence to introduce them to our clients as they seek residential solutions regarding their homes. So, you can rest assured that any supplier that as a client you meet through the PowerPulse process has definitely gone through the right checks and balances.

On whether the residential solar market is like the ‘Wild West’:

When it comes to sourcing reliable power for your home, at the end of the day, that’s a place you reside in all the time. You wouldn’t like to be in a situation where your home, in essence, is put at risk, right? Power is essential for everyone’s daily needs. So, with regards to your question about it being the Wild West, I think there’s a big business opportunity given the power challenges that we are experiencing in our country. So various suppliers have definitely entered the market from all kinds of directions and are taking advantage of the opportunity regarding residential homeowners looking for alternative power supply for their homes. So, there are some fly by knights who are creating, I think, a wild west side of the market. But at the same time, there are those suppliers, such as the two we have with us today who are definitely well vetted who have the right qualifications licencing and memberships in place who you can trust to come to your home and give you the right solutions so that you don’t find yourself in a sticky situation, given the Wild West part of the market that does exist.

On the maturity of the South African solar power market:

It’s very difficult to say exactly where on a scale of zero to 10, if I was to give it a personal opinion, I’d say we’re probably at a five, just touching a six. And the reason why,  is similar to how we’ve addressed other segments regarding businesses in the commercial and industrial sector. There are a lot of moving factors that are in their infancy. For example: How mature the technology is, how available are solar panels, what is the price point and essentially who are the qualified suppliers or solution providers in that particular space. So, when it comes to residential,  similarly to other sectors such as commercial and industrial, the economics need to make sense for the homeowner. Affordability, definitely, I think, is still a key issue to the maturity of this market. But I think, as we see demand for alternative means of energy around the world, we are starting to see much more participants entering the country from a manufacturing perspective as OEMs, but also from a solution provider perspective as installers and other facilitators who are in the market. So hopefully over time, we will see this market mature even more as once again, the supply and demand factors start to make much more sense for the homeowner.

On how Standard Bank chooses and vets the PowerPulse suppliers:

So, it’s quite a lengthy process, which I think can take a long time to unpack, but we look for the essentials. First of all, track record. Do these suppliers or entities have the right track record in terms of what is heard about them in the market; what we hear from various participants in the market about the services they’ve provided. Secondly, do they have the right certifications in place given that this is a very technical process where your home is going to be electrified? You don’t want any sort of sort of Tom, Dick, and Harry for lack of better words, touching your electrification system and having your home catch fire. So, we check on those particular certifications. And then at the same time, we take them through a due diligence process where we look at various legal aspects and operating risk aspects in order to eventually have confidence that this is a supplier that we can introduce to clients. And then we go further to contract them. So, we have master service agreements to onboard them into our list of accredited providers as an institution. But at the same time, regarding the Power Pulse solution, specifically, we have a service level agreement which you put forward to them, which governs how we introduce them to clients and how we make sure that the client journey at all times is in the best hands. So, from a legal and let’s say execution perspective, that is how we ty to mitigate against some of the risks and therefore have the confidence given that process that I’ve outlined to put them forward to clients that need their services.

Nafisa Fareed, the Chief Executive of Power4Less on what questions solar power buyers should ask:

My suggestion would be that they apply a five-point compliance checklist, and part of those five points is number one, as Kevin mentioned, track record. You do not want to be that individual’s guinea pig when you’re installing a PV solution, either in your home or your business. Track Record basically gives you an idea of the performance of that business, how long they’ve been established and what their name is in the industry. The second thing is contactable references. That’s very important because that gives you an indication of how that company has engaged with and provided for clients, the service that they’ve delivered. And it also gives you an indication of how they’ve maintained that relationship once the solution has been delivered. Accreditations is very important, especially in the power industry. When you are in the power industry, the minimum expectation I would have, is that the company is registered with the Electrical Contractors Association (ECA) Personally, my experience with the ECA, they  police company very, very well, and they help individuals that are in this industry to accredit themselves and educate themselves further. And it’s important that anyone that is doing the wild thing, especially installing PV in your home, can provide you with a valid certificate of compliance (COC)  that is non-negotiable.

Another thing that I would suggest is, you have to have a service provider that has the ability to listen and understand. And I think that is a problem in this industry where, when a client is looking for PVs, they are given a host of options without an individual actually understanding what is the generation requirements that the client has. So, it’s very important for the service provider to understand, to audit the client’s home, as well as audit their generation requirements and then advise them on what is and what is not possible. Now, if you are an accredited supplier in the scheme, you would be able to understand what is and what is not possible. And that is broad, that is related in relation to structure, in relation to direction, in relation to whether the supplier can have a solution that delivers that particular output. And another thing that’s very important is efficiency. You would want to have a company that talks efficiency because when you audit a customer’s requirements, sometimes the PV solution required can be enormous, but that can be reduced substantially if the service provider makes the necessary steps to understand how the customer can become more efficient and by becoming more efficient, reduce their demand and thereby requiring a smaller PV solution. That would require a less capital-intensive exercise for the customer.

Nick Roche, Chief Product Officer at Rubicon Cape Town, on how 50% of solar power systems don’t make it to market:

It makes all the difference. We spend an enormous amount of time testing product. We’ve been in the industry for quite a few years now, and we’ve seen where the risks are and we’ve got the battle scars to prove it. To mitigate that and to make sure that, you know, we’re protecting everybody in the value chain from poor quality or faulty equipment, we do a huge amount. We invest massively in testing every year. That means bringing in new products, testing them, looking for, you know, what’s good, what’s bad and that kind of thing. And interestingly, as much as 50% of what we test doesn’t end up in the market for some reason, either for regulatory reasons, for quality reasons, for commercial reasons, all sorts of different reasons. So, it’s an enormously important part of what we do.

Kevin on how homeowners are shifting to solar power:

So, we’ve actually kicked off a proof of concept to prove the residential business model as a PowerPulse platform. So that has gone live, and we are, at all times waiting to see how the demand picks up for this offering as we seek as a core value proposition to, in essence, educate residential homeowners more about their energy profile, especially from an economic perspective, similarly to how we service businesses. We would take them through what we call a residential calculator and do an economic feasibility analysis on their energy needs in order to determine, are they a viable candidate for solar and will solar make the right difference for them. And then after that, we then take them through a full journey, which is site visits all the way to achieving a proposal from the relevant solution providers such as the two that we have with us today until eventually they get a proposal which they have to accept, which is the first step to contracting with the solution providers for solar installation. So, we are running that process currently. And if it proves to be successful, we will then look to build it as a more fully fledged and I think, a more sophisticated offering as part of the PowerPulse platform, evolving beyond servicing our businesses, but also looking at residential homeowners. So, at the moment, that’s what we have. But I think during this time of loadshedding, the demand definitely is there. We even have staff members who are saying, I would like to have solar in my home. So, I think the need is now more than ever.

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