$2/Watt & Rethinking Solar Financing with Atmos CEO
About this episode
Ravi Mikkelsen doesn’t mince words. If you're still treating financing like an afterthought, you're leaving megawatts (and money) on the table. In this episode, he dives into how smarter tools, lower soft costs, and real customer trust can transform solar sales from clunky to scalable. He's also throwing a $2-a-watt taco party to rally installers around doing things better...because fixing solar finance shouldn’t be boring.
Transcript
I will say that our business is stronger than it has ever been.
Ravi:The success of growth and where I see companies growing consistently really is your people.
Intro:I mean, the story is not does it make power? Because they all make power. The story is what does it power?
Ravi:This is what solar installers need to know with your host Herve Billie and Joe Marhamati.
Hervé:Hi there. It's Herve and Joe Lourdes, Solar Installers Need to Know, where we interview solar CEOs and experts on how they run their business on the solar cluster. We ask their private revenue numbers. We give actionable advice and learn about trade secrets so you can run and grow your solar business. Joe and I built a solar company from 0 to 12,000,000 sales and got successfully acquired.
Hervé:If you'd like to do the same or do better, go to sungo.com/blog to get actionable behind the scenes lessons on running and growing your solar business. And now without further ado, let's jump right into the next episode.
Hervé:Hi, Ravi. Welcome to the podcast.
Ravi:Thanks, Herve. Long time listener, first time caller as they say. So excited to to get on the show finally, and thanks for having me. So quick little fun fact about me. My first name means the sun.
Ravi:I was born in India and named by a monk there. So I like to say I was destined to get into solar by having the first name be the sun. I've been in the clean energy space for two and a half decades. Started in the material science lab, then went into deployment, and finally switched into finance after learning the golden rule. Whoever has the gold makes the rules, and so I knew I needed to get in there to, use that lever to accelerate, solar and battery storage adoption.
Ravi:And this is what Atmos is is here for. At this when we got started at the beginning of the pandemic, less than one third of banks or credit unions had even a mobile app. They're definitely not doing digital instantaneous solar loan approvals. And so, you know, that's what we as the industry needs when a solar installer is at somebody's home or at their business. They need to know, can this person obtain financing to put solar battery storage, electrify their home, improve HVAC, etcetera?
Ravi:And so we said, okay. What do they need? What are banks, credit unions? You know, they have across the world. They have $500,000,000,000,000 in assets now.
Ravi:If we can activate and it's very cheap capital too because they're using our deposits. So if we can activate that, we can dramatically accelerate the the adoption of solar and battery storage and and other electrification measures. So we built technology in the business development pipeline so that banks, credit unions, green banks, CDFI lenders, government agencies can deploy their capital, you know, at the kitchen table. And so our installers can use that and basically have an instantaneous marketplace at their fingertips when they're talking to somebody. So it's not like we send them off, and then they still take their sweet time in providing that answer.
Ravi:It all comes through our software. So within milliseconds, that person is is seeing what they qualify for. And one difference about us because we don't do the dealer fee interest rate model, it's somebody can come to us directly, get prequalified, and then we introduce them to one of our vetting installers. So we can act as lead gen for our installer base as well with fully financeable customers.
Hervé:Alright. That's clear. So you have your customers on the other financial institutions, and you provide the best rates of different financing models, loans, and and and so on to to that homeowner. So can a homeowner also come to you directly?
Ravi:Yeah. They can come to us directly, although and that's definitely increased over the last year, but our primary path to those borrowers is through our installed network.
Hervé:Can you give some more information about Atmos? How many employees, maybe how many installers you work with, how many banks and credit unions? Give us some some numbers.
Ravi:Yeah. So we started at the beginning of the pandemic, and they wouldn't let us do the lending. We started offering a competitive deposit product. So you open a checking or savings account with us. We would move that money into another bank or credit union and then finance solar that way.
Ravi:That's how we got our start. And then in December 2022, we we got our very first loan through through a bank in New York. They said, we'll we'll end through you. And then then we got a few more lenders in '23 and then '24. We're up to about seven seven banks across the Northeast and some in the Midwest.
Ravi:And then early this year, Clean Energy Credit Union came onto our platform, and now we expanded nationally. So we are we are across all of The United States with deploying Clean Energy Credit Union's capital. So solar, battery storage, heat pumps soon. We've got small business in some of our markets, and soon we'll have that national as well. And we are an 11 person team.
Ravi:We're we're heavily focused in in software so that we don't need a very large team to to do what we do, you know, processing tens of millions of dollars with a very small team because we let software do it. It's very simple process. Does this person meet these qualifications? If yes, move them forward. If no, either provide more information or say, sorry.
Ravi:Not right now. I mean, that's the basic flow, and software can do that most of the time.
Hervé:So we also coming up to the r plus. So you are organizing the two dollar a watt taco party. So tell us more about that.
Ravi:Yeah. So, you know, it's on taco Tuesday even. So September 9. And on LinkedIn, I've been writing a lot like others on, you know, getting the getting the industry to $2 a lot after the ITC. And Mhmm.
Ravi:I really think that we needed the, you know, we needed the expiration of the ITC to do it because too many of the predatory sales and finance and sort of played into that and made use of that to inflate the overall cost of the system. And we have focused on bill savings, and that's really grown the industry, but it's not providing the most value back to the grid and ultimately to that homeowner. It doesn't provide any resiliency. It doesn't provide any shared resources with neighbors. That's battery storage.
Ravi:That's other activities in there. And so when you shrink the the cost of the solar side down to $2 a watt or less, which is possible in The US, you know, now you're you're you're reducing the cost of the electrons that are going in that battery. So let's say, you know, we're selling at $4.05, $6 a watt in some instances in The US, and now you're putting those electrons into a battery, you might deploy it once or twice a year because you're waiting for $6 a kilowatt hour or $10 a kilowatt hour in that market. But if now it's it's $2 a watt, maybe you're doing it much more frequently. And it's actually you know, it's not these giant peaks of of demand capacity going in there, but it's it's it's smooth out the it smooths out those peaks in those curves.
Ravi:So it becomes a much greater value to the grid. And so this $2 watt taco party is about bringing our installer network together, other parties like SunVoy, most open solar solar app. So the the four Cohoes right now is Atmos, open solar, solar app, and Wattbot. And, you know, we want to keep the conversation going. It's like, hey.
Ravi:How can we increase the margins for our installer network? How can we reduce the cost for the end customer? How can we improve the value of these services to the to the larger grid? So it's those three things that we're going after, and it's really about starting the conversation and eating delicious food together because that's really where magic happens. It's like when you break bread or eat taco.
Hervé:Yeah. Exactly. You may have noticed on on LinkedIn, my my cofounder, Joe, and I, that's all we write about on LinkedIn these days. It's all about, like, how can we put us back in when we were running our solar companies? How how would we reduce the cost in going to $2 a watt?
Hervé:So to us, it's a lot about focusing on reducing costs in your own processes. And we always say, like, focus on what do best automate the rest, which they come through the little asterisk that SunVoy provides automation for solar companies. Right? But but in general general, you need to relook at your business and see where you wanna be good at. You could also argue about, like, five different things, adding a roofing business, adding an HVAC business, which is the opposite of focus on what you do best, automate the rest.
Hervé:It's more like diversified. But at the same time, you kind of need to this is a moment where you need to check out different options and see what works best for for US solar company. So going to $2 a watt, do you have some extra ideas or or advice for for people?
Ravi:Yeah. I mean, first, it's sort of like going to that that first bullet point in what you said. You know, focus on what you do best, and it's about increasing the margins for our installer network. So much over the last decade plus of, hey. Let's have a target of $2 a lot.
Ravi:It's, hey, installers. Where can you shrink your margin? Where can you take the brunt of it? And that's not the focus and never should have been. It's, hey.
Ravi:You know, we're trying to get our fees down to zero and the financing cost there. It's like, How do we shrink that? How do you shrink customer acquisition costs? Focusing on so there's the installers, they have to focus on what where where they can. It's like, hey.
Ravi:Can you do 10 k w a day? I think that was the number that Tesla said, like, an efficient crew should be able to do or maybe that's perhaps it. You know, how much can you install per day? And if there's a good benchmark, are you close to that? Injuries.
Ravi:Are you avoiding injuries and the workers' comp payouts? Are you holding equipment for a long time? Like, that's that's a sunk that's a cost, and that should be avoided as much as possible. We're using automation tools like SunVoy. And then there's us collectively.
Ravi:We need to focus on permitting reform, inspection. You know? And permitting is broad. It's not just get the permits through the installation, but the inspection of that of of that work. I was talking to an installer here in California who basically got rewritten because, you know, the types, you know, use three eights bolts instead of one quarter bolts on hanging up a Powerwall.
Ravi:And they're like, oh, you know, that's not on spec. And he's like, it's bigger. It's stronger. I'm like, yeah. But it's not on my list.
Ravi:Yeah. Do it again. You know? So it it it is insane things like that that we need to carry. Or maybe we can do a virtual inspection.
Ravi:So there's those things where we need to collectively advocate and push for reform, permitting inspection, and inter interconnection as well. Yeah. So there there are those things. Use better financing. Don't just chase chase the tax credits and use a a $5, $6 a watt TPO product because it has the tax credit.
Ravi:If you can install it $2 a watt, you know, that is cheaper than that than that $5 a watt with the 30% tax credit. You know, let let us use all the different aspects of that of that, you know, that value stream to drive down costs, you know, improve value, the grid, and increase margins, you know, for our our installer network.
Hervé:That gives me an idea of, like, where we reduce costing a solar company. Maybe you should make a bingo card about, like, did you check every department that is just needs to be some a little bit of a a optimization everywhere? You mentioned install times. It's not about running on the roof or being unsafe. But if you if you look at your own process in your company, if you know days ahead what needs to be installed because you have another pipeline, designs are well done, then your installers, the COOLIETE, can see ahead of time what needs to be installed.
Hervé:The material is there ahead of time. And so the COOS have everything. They've looked at a project before going out. They have the material they need because they know what they're gonna install. So there is less runs to Home Depot, for example.
Hervé:And then you can install a 10 kilowatt in a day safely without doing crazy crazy things. So if everything is structured, it is totally feasible to get to to 10 kilowatt a day. Actually, we had multiple crews doing 20 kilowatts in two days each at the same time that was running Ipsen. Interestingly, it was a moment where things were not going to perfection. And so I also went back out installing batteries in my guys.
Hervé:It would it took five days to install a battery. It was, like, way too long. So standard was two days. I think that we got reduced to even one day. But, I mean, that first is also complicated.
Hervé:Right? So now we installed batteries every single day. I'm not talking about, like, two, three years ago. Yeah. As a CEO, I went back out with my crews installing batteries because the conversation was like, oh, let's see how long is it gonna take.
Hervé:No. Batteries, two days. That's it. And so I went back out with a cruise and showed that it could be done in two days. No.
Hervé:I prepared for it. I didn't just show up unprepared. So, you know, it it was installing two days. And since then, you know, okay. I've told the guys, like, well, maybe I got lucky on this one.
Hervé:I'll also help on the next one. So I did another project, again, in two days. And so there was no conversation about how long is it gonna take. Because the cost to you as a company, if it takes more than two days to install a battery, like, the cost is gigantic. So Yeah.
Hervé:To bring down the cost, make sure that you are very streamlined in all your operations. Insurance. There's, like, we had another podcast about the insurance. Make sure you don't overpay for insurance. So there's a lot that can be done, and maybe we should create a bingo card about each that needs to be optimized, like a new fresh look.
Hervé:What do you think?
Ravi:Yeah. I I I think that's a great idea. Maybe we'll print some out for the for the the taco party. And and and and also it's like in that, I've heard you know? So I can't reach that goal because of x or y.
Ravi:Right? There is this you know, there there there is this hesitation to reduce the cost sold because of the the implication that I'm gonna make last month. Right? And so we have to sort of, like, again, look at it like, where's the inefficiency, and where's, like, increased margin? Right?
Ravi:And it's just like, do I need a human to fill out this form? Can this form be done online? Can this form be done by software? So permitting, inspection, interconnection. Let's push for all of that so that we don't have and even before that, does somebody inside of your company need to do that?
Ravi:Is there an outsourced company, you know, that that can take on that role and significantly decrease the costs while maintaining or or increasing margin for you, without decreasing quality to the to the end customer? So these are the things that we have we have to look at as an industry. It's like, what do we wanna do in house? What has to be done in house? Where where where can we provide more value?
Ravi:And it's that relationship. It's making sure you know, we're not selling electrons. We're selling trust. I heard Natalie Kanell on LinkedIn. It's like, hey.
Ravi:Let's make sure that we're doing that. It's like, give them the best value. Don't just, you know, put in a process in place because that's way we've done it for twenty years. It's like we didn't have the same technology we had twenty years ago. So let's let's evolve, and let's do better for for all of us.
Hervé:I didn't hear that one, but we don't sell electrons. We sell trust. I think that's that's a good good one. Like
Ravi:Yeah. Good point. Paraphrase. There's a there's a paraphrase. The the key point was that we're selling trust now.
Hervé:Yeah. And saving cost is also on on my mind. At SunVoy, the next piece that we bring out is like a document tool, what you just mentioned. One, you can avoid, like, DocuSign cost and PandaDoc and all those. But two, even if those those softwares were for free, you still need to have a person fill those out.
Hervé:And so the next piece that we could be our billing, Lily, to save cost and time and effort is is where everything's prefilled automatically. Since we already have all the information, so that is the next major release that's coming out for us. So it's it's top of mind, not just for solar installers, but everybody that serves solar installers too. Yeah.
Ravi:I mean, this is this is rather you know, like, here's another it's like, here here's a relatively small thing, but it's just a gross example of sort of waste in the process. It's like you're talking to a customer. You collect their address to do the initial review. You send them over to me. I'm collecting their address to then, you know, do the do the prequalification on the financing.
Ravi:Then you're submitting for a permit. You're filling in the per the address again, and then on the inspection form, and then on the interconnection reform, and then on the the the shipping manifest for the the equipment. It's like, you know, it's a one piece of data. Once it's in the system, it should just be passed along via, you know, like, you know, the system should just move things forward. And and so it's just like all of these little elements of waste as we bring them down, you know, we'll we'll do those three things.
Ravi:Reduce cost for the homeowner, increase margins for the installers, and improve value to the grid.
Hervé:And avoid mistakes. You can write every time you need to write that address somewhere, you can have a typo and and miss things. So I wanna have another question for you, Ravi. Like, what is one mistake that you see sole installers make that you'd like to if you had a magic wand, like, man, I wish every installer would would avoid that mistake. What what would it be?
Hervé:Or one one improvement that they could make?
Ravi:Yeah. I mean, you know, broadly, it's it's holding on to the past, and it's it's for all of us. It's like, oh, this is how we've done it. And it's like, wait. Why?
Ravi:Do we need to do it continue to do it that way? You know, do do we need to have, you know, a high paid employee do this one thing or going to have them do something else that's of greater value and have systems or another company take on that function. I think that's that is where you know? And and broadly speaking, right now, we're seeing this mad rush of, you know, oh my god. Resi Solar is dead unless you get TPO.
Ravi:No. Like, people were were doing this. It's like, you can still find value. You can still make a great installation and investment without TPO, without the tax credit. The these analyses are like, this market's just gonna dry up because, you know, the tax credit's gone.
Ravi:They don't have TPO. Why? You know? It's like, as long as you're not gouging on sales and and finance costs, you can make the economics work. We need more efficiencies.
Ravi:So it's like, we've been selling with the tax credit. So don't just, you know, immediately jump to, like, okay. Well, where is the tax credit now? It's like, no. There's great value here.
Ravi:Let's sell it. Let's do the analysis of what needs to be done and then make that work.
Hervé:Yeah. No. I I think I think we need to go to solar2.o. Like, okay. Like, a homeowner wants solar, and they pay you and you go install solar.
Hervé:I think now we need to start thinking about what else does our business has of value. If you have already trust of some homeowners, can you provide other services? I think we need to start digging deeper than just somebody wants solar, they pay us. We go install it. I I think we need to go one step further in providing more services.
Hervé:And and I and I believe too, like, if you added $2 or what, you can sell more of of it without the tax credit. People want it. People read the news too about, like, what's happening to our grid in The United States. So if you can provide resiliency, there are some some of our clients that that are in the battery first mode. Like, they don't sell solar anymore.
Hervé:They sell batteries, and they happen to attach some solar panels to that thing. It's it's a different way of of thinking about it. So listen to your your customers. See where they are at, and don't make assumptions. Like, it's time to kinda listen to those customers again.
Ravi:Yeah. It's like self we're selling storage, and then fill it with the chief electrons from the solar. Okay. That's that's where the the real value is coming from is that dispatchable electron. But there's a great agile electrification group out of UCSD run by Andrew Krausz of Northern Pacific Power here in the Bay Area.
Ravi:And, you know, it's this sort of this this, like, just thinking of solar led electrification. This is like, okay. You get solar down. And it's like, well, if you're getting solar and your historical use is this, but if you're getting the heat pump, it's this. And, actually
Hervé:Yeah.
Ravi:The ROI improved. And it's just like, okay. Great. Now you're you're you're you're cooling and heating your home with electrons from the sun, and everything is cheaper because you're sort of doing this deeper analysis. And it's like, okay.
Ravi:You get this down. And even in places where cheap natural gas is, you know, you you get those solar electrons down cheap enough, now you can buy you can still have bill savings in the areas with cheap natural gas. It's it's most people don't get a heat pump because of bill savings. They get it because it's more comfortable, better control. It's safer.
Ravi:But, you know, there is going to be a bill increase in many many parts of The US unless you could bring in cheap solar. So it's like, hey. Here's this way to increase your sales by combining these things and learn how to do that analysis.
Hervé:Very good point, Ravi. What do you wish more installers understood understood about financing? Because you've been in the financing world for a while, and you even had, like, multiple small businesses and multiple venues. Right? It started with three years ago.
Hervé:You were with MyEnergyAdviser, and then you also did EnergyWise. We developed a new financing model and then ClimateLink. So so you've been around in the industry for for quite some time. So what are some what's misunderstood in the financing world that you wish more installers understood?
Ravi:Yeah. So my energy adviser was not actually in the financing. It was a home energy modeling tool we built o '7 to 2010, build the bill scrapers before green button. A a lot of, you know, a a lot of hand built tools that now there are APIs for. And Enerwise was what I got into the SunShot program in 2015 with, and that's really sort of the the precursor to that.
Ravi:I was like, let's use the mortgage event and and refinance solar with mortgages. But and then ClimateLink is a network that we built, and it's really a community. And it's still ongoing. I just need to have time to organize more events here in San Francisco. But we did help startups raise capital and see that side of it from the more the equity piece of the of the capital.
Ravi:And and, really, for me, why I switched into finance, it sort of goes back to the Archimedes quote. Give me firm ground to stand upon and a lever long enough, and I can move the world. And that's really what capital is. And so if you have access to this cheap capital, then you can make those electrons cheaper. So the dealer fee, we have to move away from just selling bill savings.
Ravi:That helps us grow, but that's not really what's the value here of just cheap electrons between 10AM and 2PM. It's dispatchable energy, and that means we have to bring down the cost of those electrons, which means you can't use high dealer fee financing. That is that is not the high value finance. It's as close to that cash cost as possible, leveraging your local capital, your credit unions, banks, green banks. That is gonna be the cheapest capital.
Ravi:And so either go direct or use a platform like Atmos that is connected to these financiers across the country, you know, that can then serve you better and is transparent and brings forward that finance.
Hervé:Alright. Understood. Ravi, before we finish this podcast, I wanna ask you as Ari Plus is coming up, what are you looking for at at Ari Plus besides delicious tacos? What are some maybe vendors or partners you wanna meet, or what are you hoping to learn something about?
Ravi:Yeah. You know, on on the learning side, there's two things. There's one, we have so many installers and partners and many that haven't met before coming to the taco party that it's just like, okay. What are the ideas? What are the you know, you and I are coming up with this nine by nine square on our bingo card, or maybe it's only six by six, but we want it to be nine by nine.
Ravi:So it's you know, what other squares will these other installers and partners provide to that bingo square so that we can provide this template for for everyone else? Like, hey. Here's maybe it's only, yeah, six by six. Here's 36 square that Herve and and Ravi thought of, but we wanted to get to 81 squares, and all these other people brought that in. And now all these installers and people in the industry can can think on that.
Ravi:So, like, I'm I'm interested to learn what are these other techniques and and to bring down cost, increase value, increase margin. And then I'm I'm got meetings with other potential funders to bring onto our platform, partners to deploy faster, and and then lots of installers. It's like, hey. Let's get the word out. Let's bring down costs.
Ravi:Let's not chase the past, but let's really, you know, drive value going forward.
Hervé:On those advice, George, Ravi, I thank you very much for the podcast. See you after I plus to have another podcast where we can discuss what we learned at I plus.
Ravi:Herve, looking forward to seeing you next week in Vegas. We'll eat lots of tacos together and come up, you know, with as many squares as we can.
Hervé:Thank you. See you there. Cheers.
Hervé:If you'd like to do the same or do better, go to sunvoy.com/blog and get actionable behind the scenes lessons on running and growing your solar business.