31 July 2013 — It’s time the solar PV industry and the energy efficiency industry put aside their rivalries and started to work more closely together, argues Gavin Gilchrist. Here’s why.
This is the story of a business run by a brother and two sisters, all of whom were fighting for power in the business. The way they wanted to service their market was very different. The three were hopelessly divided about the direction they wanted to take the business.
Our story involves the brother, Warren, and his two sisters, Cindy and Jane.
Warren was much older than Cindy and Jane.
Cindy was the pretty one. Everyone loved her; everyone wanted a bit of Cindy. She looked terrific, she was elegant, slim and everyone wanted to be seen next to her. She was an absolute hit on Instagram!
On the other hand, Jane was Plain Jane. She was not a looker. She was chunky, took up space, and could be noisy. She preferred to be indoors, working hard, without fail. Jane was a bit of a plodder. But she delivered great business outcomes.
Because of their personality differences, Cindy and Jane simply didn’t work together.
And that left Warren unchallenged.
As the oldest, Warren felt he had the right to run the show. Sure, his business style was old fashioned, he spent very little on innovation unless he got a government handout, and he was plain smelly. Nobody liked him.
And deep down he knew it! That made him angry, and even more aggressive.
Sometimes, when he was asked to represent the business publicly, he’d force Cindy to attend… so she’d be the pretty face of the business while he stayed at home, belching and farting his way through another working day, chuckling to himself about people thinking Cindy was in charge when he was back at the office, pulling all the strings.
How did Warren get away with this, you wonder!
Well, everyone had the impression that he ran the show. That without him the business would fail. So he relied on that false impression.
And Warren was really, really well networked.
And with Cindy and Jane squabbling between themselves, it was easy for Warren to play “divide and conquer”.
And why couldn’t Cindy and Jane work together? They were just different. Cindy was pretty, a show pony, and everyone loved her. Jane was a workhorse. She wasn’t flashy but she actually did her job really well.
Governments loved Cindy. When she wanted government support, she got it. Politicians loved being photographed next to her. She was forever getting invitations to schools, hospitals, TAFE colleges – places Jane would love to have visited. But invitations rarely came addressed to Jane.
Nobody wanted to be photographed next to Jane. Plain Jane. And of course she really resented that! It drove her mad how everyone loved Cindy yet she more than pulled her weight.
And she also had a different approach to business to Cindy. She liked working hard with her clients, day after day, over the longer term. Cindy just wanted to jump in, sell them something, and move on.
Then one day, Jane decided: “Enough of Warren.” Enough of his grubby approach to business, enough of him pulling the wool over the eyes of politicians, governments and consumers.
She knew she and Cindy had a lot more in common than they had realised. They shared a common goal, a common moral view about the future.
They would work together to bring Warren down.
And that’s what they did. They worked together and changed the face of their market. Warren was forced to take early retirement.
But this is really no fairytale. In the real world, Cindy is the Solar PV industry. Jane is the energy efficiency industry.
And you can guess who Warren is.
I represent Plain Jane, the energy efficiency industry. Many of us do, I admit, resent the support the PV industry has had in the past. Everyone thinks what we do makes economic sense so there’s no need for government support.
But, in fact, as anyone will tell you who’s done a bit of research into it, there are many, many market barriers to the adoption of improved energy efficiency in our businesses and homes.
So here’s what we need. We need Cindy and Jane working together to beat Warren. Because in the real world, that’s how we all want this story to end. That means solar PV companies promoting their services while marketing energy efficiency too… and energy efficiency companies promoting efficiency and solar PV as being part of the solution.
If any of you have looked at the business case for commercial PV, it’s usually nothing like as good as it is now for household PV. There are not that many businesses paying the around 50 cents a kilowatt hour that’s becoming less uncommon for peak residential power… at least in Sydney where I’m from.
Big Switch Projects did a study last September of the real price of energy our clients and business friends were paying for electricity. We looked at 66 bills for mainly commercial buildings, in June and July last year, after the carbon price started and network prices rose.
The average price per kilowatt hour – that’s the total bill divided by total kilowatt hours – ranged between as low as 13.6 cents up to 41 cents.
So those selling PV have something with a great return on investment for the office building paying 41 cents, indeed for those office buildings paying over 20 cents a kilowatt hour.
While getting this data wasn’t easy for some clients, we did get it. And so there’s one immediate reason why the solar PV industry and the energy efficiency industry can deliver a better solution together. The energy efficiency sector has the data and the relationships the PV industry needs. And together we can deliver some very strong clean energy solutions.
These days when Big Switch Projects is doing energy audits we always include a look at the business case for PV in commercial.
We argue the case for PV for a few reasons:
- It looks good and sends a visual statement – Cindy is indeed cuter than Jane
- With rising power prices, you can find a business case for PV when peak prices are over 20 cents, thanks to the decline in PV prices.
- It cuts peak demand – something we’re only beginning to explore as a feature (This is something Warren definitely won’t like)
- It can be done in small chunks. 20kw here, 10kw there
- You can get Green Star points for the reduction in peak demand
So the business case is going to be different for every commercial client. It’s not as easy as with residential customers. Energy efficiency is the delicious cake you’re paid to eat… and PV is the cherry on the cake.
While we do have different business styles, just like Cindy and Jane, if we worked together collaborating with sharing clients and providing advice and solutions that those clients wanted, our two industries would be so much stronger.
So that’s our task. Start working to create collaborative alliances with the energy efficiency industry. We have the clients you need… and with power prices the way they are… increasingly you have the products our clients wanted.
And let’s make things even tougher for Warren.
Gavin Gilchrist is Managing Director of Big Switch Projects. This is a speech he gave at Clean Energy Week in Brisbane on Friday 26 July.