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Publish Date: June 10th, 2024
At the end of May, we caught up with two solar industry veterans, Jason Sharpe and Matt Johnson, to talk about the future of the solar industry and what lessons we have learned since Namaste Solar first started in 2005. Jason Shape is a co-owner and CEO at Namaste Solar, and Matt Johnson is our Vice President of Residential and a co-owner as well. Combined they have 45+ years navigating the ups and downs (which are often sudden, frequently startling) of the “solar coaster,” a term used by people in the industry to describe the unpredictable nature of the industry. This is a pivotal moment where we’re seeing the intersection of climate change, grid instability, and utility obstacles.
How long have you been involved in the solar industry?
Matt Johnson: I have been involved for 16 years and started in 2008 at Namaste Solar. Namaste Solar is my experience in the solar industry.
Jason Sharpe: I have an electrical engineering degree with a focus in renewable energy and solar, specifically. I started studying solar in 1992. I built a solar electric car and raced it from the World Trade Center to the Liberty Bell in 1994. I left the solar industry to pursue other interests including cheese mongering. And then I professionally joined the solar industry in 1998. As a part of the Y2K movement, I designed off-grid, battery base, solar electric systems for a mail order company. So, I worked in that technical design industry from 1998 until 2002ish, when I left to become an electrician. And I joined Namaste Solar in 2006. We didn’t really have job titles at Namaste Solar back then. People just showed up and did what needed to get done, whatever that was.
What do you see as the biggest obstacle for the solar industry right now?
Matt: I think the net metering ongoing policy fight is the biggest one. In my experience, the solar coaster is driven because we don’t have control over all of those policies, and there are lots of other forces at work that can really disrupt our business. You can really change things when you have governmental support. Political support behind renewable energy is crucial.
Jason: So, last year Holy Cross, which is one of the municipal utilities in our state, was moving forward with a rate case that ignored net metering policy. COSSA, which is the Colorado Solar and Storage Association, went to Holy Cross and told them that they’re pursuing an illegal rate case. COSSA threatened to sue if they move forward. The governor stepped in for a “time-out” and formed a task force rather than battling it out in court.
Can you explain what you mean by “rate case” for our readers?
Jason: Utilities create what the cost of electricity is for consumers. There are multiple components that could make up what that is. A rate case is the makeup of the utility bill for the consumption of electricity for its consumers. In Colorado, we’re lucky to have net metering – which is the equal credit for charge of energy generated. So, if you generate a kilowatt hour (kWh), the utility company must credit you the same amount for that kWh that they charge you. There’s sort of this one for one exchange for kilowatt hours generated and kilowatt hours consumed. True net metering, that one for one value, is protected in state law.
And, so, Holy Cross was presenting a rate to charge its customers that was not one for one. That was the grounds that COSSA was threatening to sue. There’s also verbiage like “nondiscriminatory” in state statute which means utilities can’t create electrical rates that discriminate against people who invest in solar on their home to offset their utility bill.
For example, we all pay a fixed charge to have the opportunity to connect to the utility grid and receive the benefit of electricity. They couldn’t say the fixed charge is $20 for a non-solar customer but $100 for a solar customer, for example. That would be a discriminatory type of rate.
Thanks for that explanation. Let’s jump back to where you were. You were speaking to the Governor’s task force and your involvement in it.
Jason: So, the governor stepped in and created a task force to see if we can resolve this. He called multiple stakeholders to the table. I think there’s around 30 stakeholders. It’s utilities around the state including municipalities, cooperatives, and investor-owned utilities. And then the solar industry which is represented by COSSA. COSSA was allowed to invite three contractor members, and Namaste Solar is one of those members with a seat at the table.
Namaste Solar has a long-standing track record on policy. We’re a relatively well-respected entity within the state. We’ve been here a long time. Namaste Solar was officially incorporated in 2005. Leading up to that, Blake Jones, our cofounder and original CEO, and the other founders were helping to build up support for COSEIA, the Colorado chapter of the Solar Energy Industry Association (SEIA) and supporting the passing of Amendment 37. And COSEIA was renamed COSSA or the Colorado Solar and Storage Association. To Matt's point, Namaste Solar has maintained a pretty high level of engagement at the policy level since that genesis of the industry.
With this task force, we were one of the three contractors selected. It was Namaste Solar, Sunrun, and SunPower. SunPower and Sunrun are very large, national brands – some of the largest solar installers in the country. So, that’s the weight class Namaste Solar is invited to play in. We represent the local, small provider in that conversation.
And the other groups involved in the task force are the environmental and equity justice entities. There’s a ratepayer representative that wants to ensure ratepayers are charged the least amount. There’s a green Latinos group and Energy Outreach Colorado, which represent low-income community members.
So, there’s a few other stakeholders that are trying to participate in bringing a well-rounded solution to the future of net metering.
With these ongoing negotiations, what do you see is at stake for the future of solar in Colorado?
Jason: Everything. There’s a couple different factions in the solar industry and what we’re speaking to specifically within net metering is what we call distributed energy resources. That often means rooftop solar for the residential homeowner. There’s two other big factions in the solar industry. One is utility scale. So the utility says that they’ll do it best and cheapest for everyone. They’ll be the only ones that do it. And that’s what they want in California. They think, “we’ll end net metering and we’ll meet our climate goals with large scale projects.” And then the third faction is the community solar gardens.
And so I think the net metering conversation is really about the health of the distributed energy resource marketplace and the ability for homeowners to invest in solar on their own homes. So that's what's at stake.
And unfortunately we're the smallest entity within those stakeholders. There's a power differential for consumer choice and the ability for small businesses like Namaste Solar to sell projects to homeowners.
However, we (distributed generation solar) are 80% of the jobs and I think that's an interesting paradox - that we're the job creators. There’s a lot of benefits of solar beyond climate that small companies and distributed resources bring. And that’s part of the conversation.
Where do you think you are in the conversation? The beginning? The messy middle? Close to a resolution?
Jason: The messy middle. The goal is to have a recommendation to the governor by August 1st. We’ve gone through a series of presentations, and people have shared their perspectives. Now, we’re starting to draft what the potential groundwork for a solution could look like. We’re considering what building blocks could be a part of the future solution. COSSA’s perspective is that it isn’t time to change. California changed net metering, and it’s been very controversial. It caused very negative impacts to the solar industry. From a utility’s perspective, they want it changed as soon as possible. In our next meeting, we’re supposed to sit down and talk about real compromise, real options, and what a future solution could look like.
Well, it sounds like a pretty exciting time.
Jason: Yeah, we call it the solar coaster because of how much volatility we’ve experienced over the years. To Matt’s point, we’re dependent on federal policy, state policy, and utility policy. We have debates. I’m not going to call them fights. But there’s been tension between utilities and the solar industry since inception. I think when it started, utility companies thought, “Oh, that’s cute. Y’all want to put solar panels on people’s houses? That’s really cute.” Fast forward and now the solar industry is a rapidly growing, large-scale, multi-billion dollar global industry. And now we’re actually more of a threat. The more of a threat you become, the more obstacles you have to overcome.
On the flip side of obstacles, what do you see as the biggest opportunity for the solar industry right now?
Matt: I really see solar going mainstream. It’s hit a more critical mass where not just early adopters are seeing the benefit. It’s become much more accepted by consumers. We’re scaling. And I think that’s one of the threats that the utilities see is that this is actually going to start to scale. There’s a big push for solar systems to be installed in conjunction with the adoption of battery storage.
It's something that’s exciting and consumers are interested in. When we have these continued natural events – wind, storms, fires, those kinds of things – they help drive that push to resiliency within the home. Having storage plus a battery system can make you pretty resilient to some of those natural occurrences that are happening. So, I think that’s a huge opportunity.
And how do we as a company continue to scale and get better while being able to provide these services, especially to the low to moderate income population?
There’s a huge untapped market there that could really be great to help scale. From our standpoint, we have to figure out how to provide financing mechanisms and still work with really high-quality products to stick with our value proposition of high quality, high integrity systems and practices.
Jason: Yeah, on top of that, the Inflation Reduction Act (IRA) was passed really late in 2022. The majority of that funding has not yet hit the market. So, the primary drivers right now are net metering and the 30% tax credit. Support for financial mechanisms that will help open up these other markets and the scale is hard to get your head around. The Greenhouse Gas Fund released awards in the order of $27 billion focused on trying to create financing mechanisms that help support low to moderate income households. That money was just awarded two weeks ago from the 2022 legislation. And so we have another six months to a year before that money starts to turn into programs that actually impact our industry.
So, I think there’s this wave coming that we haven’t even started benefiting from. The solar industry was accelerating without this funding. We passed the largest climate support bill in American history, and that funding isn’t even in the market yet. So, that just shows how much opportunity there is for the solar industry to grow.
Are you concerned that any of that funding is threatened if the political atmosphere changes?
Jason: Absolutely. We’re so dependent on policy. A change in an administration at the federal level can have significant impacts. I think it’s hard because the way the IRA was designed, it benefits a lot of different people on the political spectrum and a lot of states with different political interests.
I think the hope is that there’s enough benefit for a lot of different stakeholders in the IRA that it’ll be difficult to repeal the whole thing.
However, targeted repeals about things that more directly impact us is certainly a risk. The other risk is that large amounts of money can attract bad actors. So, if the money is easy to get and abundant, how could that affect high-integrity solar contractors like Namaste Solar? I think that’s something we need to be diligent about.
What’s important for the public to know about how the solar industry has changed over time?
Jason: Costs have come down significantly. The fact that, during my career, solar energy has gone from so cost prohibitive that it’s unobtainable and could not be viable in a capital market to, right now, the cheapest form of kilowatt hours on the grid is something I’ve witnessed.
Matt: A lot of consumers still have a perception that it’s expensive, that it’s unattainable, that it causes difficulty in selling their home, things like that. I think we’ve done a good job to try and address those issues. And I think these are things that we’ll have to continue to talk about to help the market scale. The other things that have changed over time is that there are a lot more companies in the marketplace that don’t necessarily have the consumers best interest in mind. And so we have to do a good job of educating the consumer that not all solar contractors are created equal, and it does matter who you work with. It’s a long-term investment and you should enter into an agreement with the contractor who takes a long-term approach. I mean, these things will last 25 plus years if taken care of and built with high quality equipment.
Solar has gone mainstream and you can go solar with no money out of your pocket if you have decent credit. Instead of renting electricity, you’re owning electricity. I think that concept is something we need to continue to send into the marketplace.
What’s important for the public to know about the future of the solar industry?
Jason: I think the other piece is storage and electrification. You look at AI, you look at electric transportation, you look at home electrification; those three trends are going to increase electrical demand significantly in the coming years.
We’re expecting electric rates and that demand to increase at unprecedented levels in the next decade as we convert from carbon intensive fuels to carbon free electricity. The big question now is, how can utilities keep up? That’s a big trend nationally that I think people should be aware of.
And then we’re seeing more grid resiliency issues related to climate change. The Texas grid shutting down, the wildfires in California, the wildfires in Colorado, and we just recently had a wind event last month that shut down over a hundred thousand customers in Xcel territory.
So, the increasing demand with the increasing impacts of climate change and the threats to the resiliency of the utility grid at a time when electricity is becoming more important are an interesting confluence of factors.
What keeps you motivated in the face of solar coaster struggles?
Matt: Personally, I love helping individuals go solar. I designed and sold systems for 10 years, and it was just awesome to meet with people who were wanting to save money, go green, and help the environment. I was always into saving the world one roof at a time.
And with Namaste Solar, I’m passionate about business ownership. The opportunity here is for anyone to become a co-owner and have a say. We strive for excellence in all that we do. The transforming energy and transforming business [Namaste Solar’s tagline], both of those things have always appealed to me.
It’s not without challenges. And that’s part of the fun. It can be exhausting, but then also can be super fulfilling when we see how much solar we’ve installed over the last, almost, 20 years and how many people we’ve helped.
And you know what? We’ve done this as a small business in a market that is full of companies that are sharks – they’re trying to eat us for lunch.
It’s all a great challenge and makes it exciting. I still just love the concept of solar. Like, wow, the sun can really provide all the energy we need, and why are we not doing it even faster?
Jason: We’ve been working on understanding our business and how to articulate certain elements. And I think, what is our purpose? And that goes back to, what is my purpose? I love our tagline, “transforming energy, transforming business.” And I think that speaks to exactly what Matt is saying.
I took a gap year after high school in 1989. I was living in Australia, and I had this epiphany that electricity was the most important thing to humankind. Electricity can do anything. Refrigeration, communication, transportation, you name it. Electricity can do it. And if you took away electricity from modern day humanity, we would crumble. We can’t survive without electricity at this stage in our evolution. That’s why I became an electrical engineer.
And then in that epiphany, I was like, “Well, if electricity is the most important thing to modern humankind, we better figure out how to do it sustainably.” So, then I became passionate about renewable energy.
Finding Namaste Solar, I started falling in love with the transforming business side. I think the world is inherently unfair. And there’s times in my life where that’s harder to deal with than others. But I’m passionate about trying to create as much fairness as possible within my spheres of influence. There’s just so many cases of unfairness – power differentials, racism, and other inequity in the world.
So, I’ve become more and more passionate about being a part of a business that is trying to transform business in America. I do think capitalism is powerful and creates really wonderful outcomes. But there’s deficits. I couldn’t do solar in a way that wasn’t creating more fairness and transforming business.
