Cinnamon on solar

If you’re in the solar biz in California, you’ve likely at least heard of Barry Cinnamon.

Cinnamon is a long-time solar advocate who started his career in the late 1970s as a researcher into new flat plate and concentrating collector designs at MIT. During the late 1970s and early 1980s, he designed and installed active solar, passive solar and ground coupled heat pump systems. In the mid-90s, he founded and led a software company, inspired by solar power computer modeling, to IPO.

Cinnamon has a BS in Mechanical Engineering from MIT and an MBA degree in marketing from Wharton. He’s a NABCEP-certified solar installer, a licensed California C-46 solar contractor and president of the California Solar Energy Industry Association.

And, he’s a dirt-bike rider.

Cinnamon tears it up on a solar-powered bike. Look, ma: no engine!

He’s also at the helm of the leading publicly-traded solar power installer in the U.S., Akeena Solar (OTCBB: AKNS). It’s a fast growing company, “somewhere around 75 people,” based in Silicon Valley, with offices in Fresno, California, New Jersey, and New York.

Akeena is headquartered in the tony foothill community of Los Gatos, California. We caught up with Cinnamon there, and found neither hoit nor toit – Akeena’s unassuming office and warehouse are in an industrial area nestled beside auto body shops… and in truest Silicon Valley startup fashion, employees work cheek-by-jowl in a tiny modest office space.

You’ve said it’s a misconception that the silicon supply shortage has been a bad thing for the solar industry, pointing out that higher silicon prices have put more money in the pockets of silicon makers, cell and module makers. Has the silicon supply shortage been good for you as an installer?

If there’s anybody happy about the shortage, it’s the module manufacturers. They love it. Most of these guys were able to make a profit when the product was selling at $2.65 a watt. Now it’s selling at $3.80 a watt. Yes, their costs have gone up, but not by a dollar.

We, as an installer, are actually making less money.

A big factor is that the incentives in solar that have been provided from states like California and the federal government haven’t been keeping pace with the increase in the costs of solar equipment. When the cost for solar modules goes up, solar becomes less attractive to a homeowner. In order to keep the market growing, incentives should increase to offset the higher module prices. If you keep the incentives the same and raise the price of a solar system, a homeowner sees a lot longer return-on-investment (ROI) and sales go down. Incentives can be lowered when the price of silicon comes down again. But they should be raised today.

We are now under enormous pressure. It’s hurting our business to no end. We’re not making more profits, we’re making less. When you’re in an environment where your costs keep going up and you’re selling a fixed price ‘something’ to a customer, by the time you get around to actually doing an installation, your costs have often gone up. The difference has to come out of your margin.

You can’t pass that cost along to the customer?

Not after the contract is signed. There’s no way to pass it along.

As to the conspiracy theorists who say that oil companies are behind the silicon shortage, I think big oil is so totally disengaged from the solar module industry that it’s not at all a factor. Nobody in this business is smart enough to be involved with any conspiracy.

You’re fond of saying one needs to learn the solar business “from the roof down”. Tell us more about that.

I’m a believer that whatever business you’re in, you’ve got to understand things from the customer standpoint. The only way you’re going to do that in solar is to meet with the customer, sit down with them, and understand their needs, their environmental motivations and economic motivations. And to be successful in this business, you’ve got to be efficient. It’s important to know all of the tasks and activities and problems in getting a system installed. A lot of solar companies have executives who started literally with a drill and a ladder, doing the work themselves, and going from there. I learned an enormous amount in doing that.

I think it’s important that virtually every single employee of ours, regardless of the department they’re in, spends a day or two on the roof. It’s one of the questions we ask in the interview; we don’t ask about your age, marital status or sexual orientation, but we do ask ‘are you afraid of heights?’ When they’re done, they have a whole new understanding of what a quick-connect is, what a module is, why it’s hard to put it on, why you need a rack, and why we have such a high appreciation for the guys that do the hard work.

Given your expertise as a leading solar installer in the U.S., what are makers of solar modules doing wrong? Put another way, if you had the opportunity to tell solar vendors what they need to do better, what would you say?

I’ve said it. They don’t care. Really… I’m being honest.

All solar modules, or virtually all, are mounted in a two part fashion. You put an underlying aluminum rack structure on the roof. Once that’s done, you bolt aluminum frame solar modules with aluminum clips to these aluminum racks. Three years ago I went to one of the biggest manufacturers in Japan and asked them, “why don’t you just build the racks into the solar modules?” And they said, “we’re just trying to build these modules as cheaply as possible. The mounting of it is your problem.”

They’re trying to make a solar module with the lowest price per watt. As opposed to thinking about it from a total cost of ownership, or full systems cost perspective.

So, when the Japanese said “that’s your problem” (they, of course, said it very nicely) I took that to heart, so we’ve developed some technology that we’re advancing that will hopefully come out in a year and a half. Essentially, it’s a solar module with a built-in rack. They’ll snap together quickly, like Legos.

What more could solar vendors be doing better from your perspective as an installer?

For the most part, the major crystalline module vendors are doing things right. But not all new vendors have their acts together. A lot of thin film companies out there are concentrating on making their cells as cheap as possible and apparently haven’t even thought of how to get the cells into modules, let alone getting the modules onto the roof.

For big commercial roofs, thin film looks great. There are a lot of big commercial roofs. That’s where thin film belongs. But until the efficiency of thin film gets up into the mid to high teens, it’s not going to be of interest for residential installations. Why? You’ll be able to put a crystalline product on a residential roof for higher efficiency. What do I mean? I know people that have three kilowatt residential systems on their roof that used thin film material, and now say, ”gee, I wish I had a crystalline system and had six kilowatts.” It would have cost them about double, but they could have pretty much wiped out their electricity bill.

Between monocrystalline and polycrystalline, there's a few percent efficiency difference that doesn’t make that much of difference. If you charge customers a little more per watt, you can talk them into it. They want the best. They want that car that gets them 40 miles per gallon instead of 35. When you talk about thin film and ask them, “do you want to save $100 a month on your electric bill, or $200?” - they’ll go for the bigger system. Almost always.

Here's the fundamental breakdown: the economic premise of thin film is that it’s much cheaper per watt to install, but it doesn’t turn out to be. If you put a 3 kW thin film system in on a residential roof, it’s going to take up 600 square feet of roof space. If you put a 6 kW polycrystalline system in, it’s also going to take up 600 square feet of space. So you’ve got twice as much labor per installed watt for thin film because it’s half as efficient. You’re installing twice as many panels. If the cost of packaged thin film modules were half as much, you’d be okay. But they’re not pricing it that low.

And with respect to thin film, outside of Uni-Solar (United Solar Ovonic), I’m not sure who’s really selling a lot of it. We sell a lot of Uni-Solar. We put it on school roofs - it’s the only place it works. Why? Not only can you throw rocks at it, but you can skateboard on it! That’s important, because a lot of these kids get onto school roofs to skateboard. Solar manufacturers don’t necessarily know that.

Is there undue emphasis on thin film technologies in the solar industry today?

One thing that really concerns me is how the industry is maybe making too big a commitment to thin film as the savior of solar. If thin film doesn’t ‘click’, if efficiencies don’t get competitive, I’d hate to see everyone get disillusioned about the business. Crystalline is still a great technology. And, frankly, I think we’re going to be swimming in silicon in two years, given all the silicon plants that have been built, or are in the final stages of being built.

What sorts of things SHOULD the industry be excited about? Is concentrating solar the next big thing?

I guess I’m old fashioned. I think the biggest payoffs will be in incremental improvements to what works now. I think concentrators are good – I worked on them 26 years ago in college. I just don’t see any moving parts moving for long on a roof without a lot of maintenance. I only trust metal and glass.

Why? Here’s an example. We only do code-compliant installations. We follow the national electrical codes. When you’re running wires on a roof, you need to use waterproof conduit. The easiest to use is UV-resistant PVC conduit - it’s what’s sold at electrical supply stores and Home Depot, and is what’s rated for use in wet environments and in the sun. The problem is, it’s just not good enough. After three years on the roof, it crumbles. There’s a good example of something that was even approved and still isn't good enough.

There are a lot of companies working on new products in the industry. Maybe more today than at any time in the history of the solar business. Do you follow new technologies and are you enthusiastic about them?

It’s important for us to buy the products that we install from reputable companies. If a new module comes in, new latest and greatest technology, I’m going to wait. I’m going to wait until I’m sure they’re going to be around. What do I look for? Things like very, very deep pockets and an unquestionably good product.

Remember, we’re obliged to provide warranty support for these installations, in some cases for as much as 25 years.

New products I’d avoid? I’m not going to do anything that rotates or moves, for instance. I’d wait five years and make sure everything’s still moving. It’s tough to do moving things well on a roof in a cheap way. We don’t do small trackers for the same reason. They work good for a while, until a windstorm, snow or ice causes them to jam up or bend, or their controllers go, and you’re out of luck. We just won’t do them.

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