For the last few decades, rooftop solar was like Ford’s old Model T…..you could have any kind of system you wanted as long as it had black rectangles bolted to a frame on your roof. But, what if your roof could generate the electricity directly, without any panels at all? Host Bill Nussey talks with Martin DeBono, President of GAF Energy, about how and why the world’s oldest and largest roofing materials company is pioneering the shift from PV panels to PV roofs. Martin shares how the solar-specific technologies and services are woven into GAF’s existing 5,000 roofing contractor partners and what that means to the market.
Here are some of our favorite quotes from Martin’s interview:
You show [solar panels] to 50 consumers and 45 will not be able to distinguish the all- black panel between a typical front contact panel with a silver frame. What they’re going to see is a wart on the back of their home.
The existing model for electricity is based on a broken social contract between utilities and the constituencies they serve, and we need a new one
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Transcript
Bill Nussey:
Well hello, and welcome to everyone in the Freeing Energy world. We’re so excited to share a new and incredibly interesting and super duper local energy podcast guests with us today. We really appreciate all the time you share with us, and we hope that what you hear will help inspire you to continue this great movement towards local energy and all the benefits that it has. And I think today’s conversation is going to get all of you just as excited as I am that this stuff is happening now, it’s real, it’s happening at scale, it’s being done by really serious people.
Bill Nussey:
And to that end, my guest today is Martin DeBono. He’s the president of GAF Energy. Now you guys might’ve heard of GAF in a different context because this is the largest roofing supplier in the world, and they provide the materials for over two million new roofs every year. And this is a great example of one of the companies that have been around for years that is taking a bold big step into clean energy and into the new technologies, and GAF Energy was created, we’re going to hear all about it today, and Martin runs it, and they’re basically bringing together the world of rooftop solar, well, with rooftops. So Martin, welcome to the Freeing Energy podcast today.
Martin DeBono:
Thank you very much and very happy to be here.
Bill Nussey:
So we’re going to talk a lot more about GAF Energy solutions in a bit, but like we always want to do, we want to hear a little bit about your story. Now, for those of you that haven’t read ahead, Martin is a decorated officer, having served in the United States Navy on the Ohio class ballistic missile submarine, the USS Georgia. And thank you very much for your service. But this is a really unique career, and for folks like me, it sounds unbelievably cool. How did you find your way into a nuclear-powered submarine and what was it like?
Martin DeBono:
So at the time I made the decision no different than that of millions of others that have made the same choice. I had no idea how much it would influence my life. Everyone in my family, all the males in my family, had served. Think about this. My grandfather emigrated from Italy as a teenager, ended up being drafted and sent back to Europe in World War I against Italy. So a lot of family history. But probably more relatable to many in the audience, the idea of taking a desk job was anathema to me. I worked as a sysadmin at the University of North Carolina computer science department, and I literally could not stay awake. And coincidence with my time there I received collateral from the Navy that had a picture of a desk with an expert and said, “Don’t drive a desk when you graduate.” Enough to get me to a local recruiter’s office.
Bill Nussey:
Nice. A lot of the folks that we’ve talked to over the years that I’ve met who are in clean energy have a background in the military and in particular nuclear submarines, which is kind of amazing, since I guess there’s not a ton of people that have done that. What is it about being on a nuclear submarine that opens your eyes up or changes your worldview towards energy and maybe clean energy going into the future?
Martin DeBono:
When you’re under water for 80, 90 days at a time, and the sole source of your life is a power plant that happens not to generate any carbon emissions… There are other byproducts that are created, but you become very familiar with running power plants. One of the challenges people face in getting the clean energy industry is just the vernacular. We have made it so difficult as an industry to attract outside talent, that people who have a background in watts, in kilowatt hours, in BTUs actually interview better than those who have no clue, and I think that’s what happens. You have experience running a power plant, you have experience in leadership, both of which are needed in the clean energy industry, and thus it makes it get home.
Bill Nussey:
Thank you. Great answer. All right. So let’s talk about GAF. How did a giant pillar of the American building industry decide to branch into something as new and differentiated, maybe risky as a rooftop solar? It’s a huge move and you guys are now, I guess, one of the biggest, if not the largest companies doing this integrated rooftops business. So what led to the creation of this business and how did you get involved with it?
Martin DeBono:
Yeah, certainly. All the credit has to go to the leadership, David Winter and David millstone believe that there is both a business opportunity and a social obligation to address the ability for roofs to generate energy. From the business perspective, it makes sense. You’re having a discussion with the consumer about the home and why not extend the value of a very critical component of your home, the roof, to providing you clean energy? It is completely logical that solar will migrate to the roof, and being one of the largest roofing companies in the world, they are in a position to be disrupted by rooftop solar. So rather than be disrupted, be the disruptor. So that’s on the business side.
Martin DeBono:
And then on the social obligation side, GAF Energy is a subsidiary of Standard Industries. Standard Industries is a family owned company, it’s been around for 130 years, and it’s their intention to make sure that Standard Industries is around for another 130 years. And if you take that long view of planning, take that much of a long view, maybe not 100 years, but 20, 30 year planning cycles, you realize that investing in clean energy is the right thing to do.
Bill Nussey:
In the industry of roofing, where does GAF sit?
Martin DeBono:
Yes, so GAF is a subsidiary of Standard Industries. So Standard Industries is the parent company. GAF Energy is an operating company. GAF is an operating company. But Standard Industries also owns the largest roofing company in Europe. It’s Braas Monier, BMI. They also have large roofing companies in the Middle East, in Africa, in other geographies as well. So globally, Standard Industries is the largest roofing company in the world, and in each of the markets in which it competes it is the largest roofing company.
Bill Nussey:
Wow, the scope of that is just hard to get my head around and the fact that an industry or a company of that scale is going after this is really exciting. So what do you think the hardest part for a large company that’s been around for forever to jump into something as new and cutting edge as rooftop solar and building integrated photovoltaics?
Martin DeBono:
I think the most difficult part is how do you carve out the space to go after a new endeavor that requires significant investment? In order to be the largest roofing company in the world, you have to have fantastic operations, you have to have fantastic scale, and tremendous focus. And while that focus is incredibly valuable in the context of being the world’s greatest roofing company, it would dilute management’s ability to focus on new endeavors. So what Standard Industries did is create an entirely new company in order to go after that opportunity. So we are relatively unburdened by the things that might burden an existing companies or a management’s existing priorities. And I think that’s the genius of it. Rather than try to shoehorn solar into an existing operating company, recognizing that this is a new opportunity that may one day end up eating the lunch of an existing operating company, prepares us to be successful. We’re not encumbered by what the company has done for XYZ number of years. We’re able to attack this new challenge in the way that we see fit.
Bill Nussey:
That’s a really big deal, that they were that committed to create a carve out. My favorite business book, Innovator’s Dilemma, really makes the case about how large companies with established customers and customer bases struggle to embrace new markets. And the prescription in the book at least is to do exactly what GAF has done, which is to create a wholly owned subsidiary or something entirely firewalled off from the core business, at least until it matures. So textbook 101, but unbelievably hard to do, and the fact that you guys are off to such a great start is a testament to the leadership of the company. And you, obviously. How did they find you, by the way?
Martin DeBono:
Yeah, so I was in the solar industry for a number of years and like many people that switch jobs, a recruiter called me up, had several discussions, and was really attracted to this idea of going after the BIPV market. I feel that traditional solar has been installed the same way for 30 to 40 years. If you look at solar installations from 1976, they don’t look much different from the solar installations of 2020. And the reason for that is existing solar companies are really focused on things like efficiency, cost, and trying to scrape out a profit in a very, very competitive industry. However, if you take a consumer’s perspective of what they want, there are things that consumers want that the existing solar industry I believe is not attending to, and when you combine solar with roofing, you’re able to address those needs much greater than a standalone solar company is able to.
Bill Nussey:
I think it’s a very important differentiation that may be lost on a lot of people, and I want to make sure we hit it hard here, is that GAF Energy is not just taking panels and sticking them on the roof. You’re innovating one of the most cutting edge approaches to rooftop solar, which is you’re actually making the roof into solar panels. So can you tell us a little bit about how that works and why it’s different and why it’s hard and why it’s important?
Martin DeBono:
Absolutely, absolutely. Why don’t I start with why now, because the concept of integrating the solar into the roof has been around for a while, and a lot of companies have failed in this endeavor. And what’s happening, just similar to… If you think about the first smartphone or the first smart device, people talk about, like the Apple Lisa, it didn’t really take off because the factors around it did not support a handheld ecosystem. And similarly, 10 years ago, when people tried to do building integrated solar, they weren’t successful because, for example, 10 years ago, the cost of a solar cell was a dollar, and today it’s 15 cents.
10 years ago, the software to design a system in 15 minutes didn’t exist. The design was hours and hours. So there’s a confluence of factors that make now the right time to invest in building integrated solar. That’s part one. The reason it’s so hard is that you have to create a roof, a water barrier, a fire barrier, and a power plant in one structure that will last for 25 years. That’s really hard. It’s a confluence of events that makes it possible now, yet we have to wrap our hands around all these things that makes it really, really difficult.
Bill Nussey:
But at least, in my estimation, I can’t fathom that once this catches on, we’re still going to be putting square rectangles on aluminum racks. Do you think the market’s going to always have both kinds of solar or do you foresee the integrated roof really taking over?
Martin DeBono:
No doubt integrated roofs will take over. There’s literally no doubt in my mind. And the reason for that is how many people are still taking their horse and buggy to the office these days? A solar panel is a 40 year old relic, and the reason it hasn’t been advanced upon is just the way that the solar industry has developed, but with the entrants into this market of well capitalized, totally dedicated companies that take a very long view, [inaudible 00:12:45].
Bill Nussey:
One of my good friends, Dr. Ben Damiani, he’s a solar PhD and just a real genius, and he’d been in the space forever. He likes to say that the solar industry is like the old initial car industry. You could have any option of Model T as long as it was black, and in the case of solar, it’s a square rectangle, and as long as you want that, you’re fine. I’m going to have to make sure I tell them all about Martin DeBono and GAF energy, because you guys are completely breaking that mold. And I agree with you that it’s hard to see any other future than my roof is my solar panel.
Martin DeBono:
Here’s another point to think about. So you mentioned the fact that a solar module is a square rectangle. Very common components are aluminum and glass. Aluminum and glass are commodities. Commodities over time can increase in cost. The technical part of it, the microprocessor that is effectively the power plant, the solar cell, that decreases in cost. So what you’re seeing now is when you look at the installation cost of a solar system, it’s no longer the cell that’s the single biggest cost. Now the glass is cheap, but think about the cost to take a piece of glass, manufacture it in Asia, ship it across the ocean to a port, put it on a truck, go to a distribution center, send it to a warehouse, and send it your consumer’s home. What you’re finding is the cost to actually ship a solar panel, on a marginal basis, is almost as expensive as the solar cell itself. So this idea that we’re going to continue to change the way the world is powered using basically flatscreen TVs manufactured in Asia is yesterday’s thinking,
Bill Nussey:
I love it. Love it, man. Great vision. I was in a fascinating strategic meeting. It was a group of large solar manufacturers in the US and installers, and the idea that was born that I hadn’t heard, and I think is exactly what you’re living, is that if you want to really innovate and you want to break out beyond the black rectangles, you need to be making the products where they’re being installed. Like any marketplace, if you want to get customer feedback, you want to be able to embrace it rapidly and iterate the products accordingly, and if you’re going halfway around the world to do so through multiple different languages and governments and currencies, it’s just going to be slower. If you’re in one country, you’re going to see that iterative cyclical a lot faster. It’s not the only way to go, but I do believe it’s going to be a substantial advantage for you and others for the coming years.
Martin DeBono:
I completely agree to that. I mentioned earlier that Standard Industries has a global presence. We have 184 factories around the world. We build our materials where they are used. The ability to integrate solar into those materials at the point where they are created is phenomenal. We often talk about solar as a green industry. One of the things that I would like to see is more solar manufactured and built where it’s going to live the rest of its useful life. Because look at shipping costs for anything.
Martin DeBono:
And why are shipping costs going up? Because there’s high labor content, there’s high fuel content. These things are not being delivered by electric hovercrafts. They’re being delivered by diesel and gasoline powered rigs. So there’s tremendous benefit to do it locally. And then of course, you’re hitting on… When you build it locally, you can craft your offering to the local tastes of the consumer base. And that has been completely disregarded by solar companies because they’ve outsourced design to a standard. And that’s where we see a tremendous opportunity. You build it locally, you craft it towards local tastes. I don’t want that thing on my house to be eliminated.
Sam Easterby:
Okay, here it comes, another clean energy acronym, BIPV. Breaking it down, that’s building integrated photovoltaics. And when it comes to local energy, this is about as local as you get. According to the Solar Energy Industries Association, building integrated photovoltaics are dual use materials that serve as both the outer layer of a structure and generate electricity for onsite use or export to the grid. Importantly, building integrated PV systems are planned when buildings and homes are being designed and they get installed as part of the original construction. BIPV systems lack the racks and mounting equipment of traditional PV systems. With BIPV, PV is not added to the building, it is the building.
Sam Easterby:
What are some applications for BIPV? The most prominent example is rooftops. In these applications, PV material replaces roofing material, or in some cases, the roof itself. Additional examples include building facades. PV can be integrated into the sides of buildings, replacing traditional glass windows with semi-transparent thin film or crystalline solar panels. In Freeing Energy podcast 37, Laura Sartore from Italy’s Ecoprogetti describes how photovoltaics were incorporated into the facade of the firm’s new world headquarters and how rapidly BIPV is growing in Europe. The value of BIPV goes beyond aesthetics and helping the environment. By integrating PV directly into building materials, it is actually less expensive than adding PV later. Now back to Bill and Martin for more.
Bill Nussey:
A recent podcast guest was Dr. Becca Jones-Albertus, who runs the Solar Energy Technology Office for the Department of Energy, so she’s essentially the senior solar person in the Department of Energy. We had a great conversation, and I was surprised deeply by two things that I left with. One was that the degree to which they are working with young, fast moving startups through something called the American Made Solar Prize and some other great projects like that. And the second was, they’re just absolute laser focused on manufacturing in the US and how important that is to the Department of Energy and funding innovation. So I think everything you’re saying resonates across all the lines of the Freeing Energy universe, and I’m really excited to see it yet again here and to see it being successful as you guys roll it out.
Bill Nussey:
Well, let’s talk a little bit more about GAF Energy, because one of the super powers you guys bring to this marketplace is a massive network of people who know how to install roofs. And as I try to put myself in your shoes, I’d imagine that that is an unbelievable advantage and it also has some challenges. There’s probably quite a few people that put roofs up that aren’t familiar with what solar is and how to tie it in. So how does that work to your benefit and how do you navigate through some of the challenges that emerge with an existing massive workforce you can leverage for this?
Martin DeBono:
Yeah, certainly. So why don’t I speak to the benefits first, and I’ll be happy to address some of the challenges. The benefit is there are far more roofers and roofing companies than there are solar and solar companies. The second thing is, as a roofing company, we’re able to create a product that a roofer can install. So for GAF energy, we said we’re going to let the roofers do what they do well, that is sell things and waterproof things. And we’re going to let GF energy do the things that we can do well. And again, because we are freed from the burden of install base, we don’t have to think about the way that traditional solar companies think, we’re actually designing this for a specific task, and we have had the luxury of designing it basically from scratch, we are able to create a how would you create services, design services, PTO, or permission to operate services, interconnection services that would work where somebody else’s doing the installation.
So our offering to a roofer is, “Hey, Mr. Roofer, all you need to do is get the customer and install the roof. We will take care of the design. We will take care of the paperwork. We will take care of any rebate forms. If you need any training for any reasons, we’ll provide that as well.” So we built a very nice services organization to go hand in hand. So if you think about, again, the cost of solar, in case one I put a new roof on, then two days later, a new crew drives up, gets on the roof, sets their safety gear, puts the solar on. Versus I get a new roof and the solar happen at the same time. We’re eliminating duplicated car trips. We’re eliminating duplicated trips up and down the roof. We’re eliminating duplicate safety inspections. We’re eliminating the homeowner having to deal with duplicate contractors. That creates value. And as a result, homeowners that choose an integrated roof were able to get a better product for the same cost as a traditional solar plus a traditional roof.
Bill Nussey:
That’s a great pitch. And I can imagine as you guys get better and better at this, it will be even cheaper than a roof and traditional solar panels. So what do you find as the challenges to working with an existing workforce?
Martin DeBono:
Certainly. So earlier on you asked, we had questions about why I joined the military, et cetera, et cetera. Really what we all should do… Now, it’s very, very hard work, but if anybody really wants to be successful, they should go start a roofing company. Roofers are very successful. It’s brutal work, but they’re very successful. They’re profitable. And the challenge for us is how do you convince a roofer, rather than installing one more roof, to doing solar plus a roof. And that is our biggest challenge, because roofing, it’s in short supply. Labor is hard to find and roofs are… When you need a roof, you need a roof. It’s not an optional purchase. And roofs are such an important part of a home that need to be done. And the number of people that can do them right is fairly limited.
So our biggest challenge is educating roofers on the opportunity that solar represents, straight up, and then if the opportunity, i.e. the margin they can make from selling solar doesn’t excite them, then we instill a little bit of fear in them in saying, “Hey, if you don’t get in this business now, solar companies are coming in this business,” because what we’re seeing is solar companies are migrating into roofing because the roofing helps increase the margins of a solar company.
Bill Nussey:
Wow, great points. I had solar put on my roof recently and it was done by a solar company and nearly all of the questions that my wife had for them were around the roofing dimensions of it. The look. Squirrels is a big issue for us. And of course the leaks. So the head of the solar installer, who’s good friend now basically convinced my wife that their magic system would prevent leaks in our roof. Probably should have waited a few years so we could have got an integrated system where it was all taken care of, but I was eager. So it’s up there now, and we’ll hope that the squirrels and the water leave us alone, but I love the idea of having all that taken care of at once. Now, if you’re leveraging more than 5,000 partners that GAF brings to the relationship, GAF Energy, you’re adding your own people into that mix at an installation. Are you integrating electricians and designers? How does that work and how do the teams work together?
Martin DeBono:
So first, as a small company, we’re not going after all 5,000 partners at the same time. We select partners based upon a geography, their willingness to embrace solar, demonstrated excellence in dealing with the things just mentioned. Waterproofing is paramount. So we are hiring electricians and we are hiring designers. We have a design service that will provide designs for our roofing partners in less than two hours. We have electrical services whereby we’ll do… The majority of the installations we do, a GAF Energy employee will actually do the ultimate electrical hookup. Which is great from a consumer’s perspective, because imagine you’re buying a system, and remember solar adds to the cost of the roof, and you can say, “I’m your local partner. I breathe the same air you breathe. I drink the same water you drink, and I’ll be here as your is your interface.”
Martin DeBono:
But then once it’s done, someone from the manufacturer is going to come in and hook it up so that you have a local contact plus the power of the world’s oldest, largest roofing company behind it. So it resonates well with our consumers. And the challenge there is hiring electricians. Hiring designers hasn’t been that much of a challenge. We have a great culture, our design team. Not going to give out any names on this podcast. I don’t want the recruiters to come calling. Design team is doing really well. Hiring electricians is challenge, hiring all the trades is a challenge, and we’ll continue to work through that.
Bill Nussey:
I have many, many friends in the installation world and electricians are always the most in demand and hardest to find. And that’s also an industry that’s been around for decades that’s having to reinvent itself and think about things in a new way as a trade. Let’s take the lens a little broader and think about the things that go with the solar solution. So the first one I love to ask about is batteries. That’s a increasingly interesting and do you want fries with that kind of add on to solar installations. Is GAF Energy getting into batteries?
Martin DeBono:
For sure the home of the future and our offering of the future will include batteries. Right now, we don’t offer batteries and it’s twofold. As a nascent company, we’re really focusing on the solar integrated development of roofing products. But also, being very familiar with batteries, and we actually have an investment arm at Standard Industries that’s evaluating batteries. Unlike solar, where I did mention earlier that this is like a 40 year old technology that’s going on the roof, there is little chance that the primary component, the poly-silicon or mono-silicon solar cell will change. Silicon is the second most abundant element on the Earth surface. It’s cheap, it’s plentiful. It’ll be there.
Battery chemistry is very much up in the air. Very much up in the air. So much so that I can put a battery, and I live in California where you think you’d want a battery. I wouldn’t do it right now. I think that the changes that are going to happen in batteries over the next five years will be so monumental that if you wait for those five years to get a battery five years from now, that any savings you might accrue between now and then will be wiped out by how much less expensive it is at that time. So to that end, there’s much more exciting battery technology. I would say safer battery technology. I believe that lithium is explosive, if my time in the Navy taught me anything. One of the reasons that lithium batteries are so big is the controls they have to build around it to prevent it from exploding. Not that they’re explosive, but the risk is there.
As opposed to other chemistries that are just much more inherently safe. So I think that there going to be a lot of change in batteries and where would we go to market today, is if you’d like a battery, there are great batteries out there today. We will work with their local batteries provider and we’ve done that, but we probably won’t offer our own battery until there’s a couple of generations of change in the chemistry, and then for sure you could imagine a GAF Energy ecosystem being composed of a battery, a solar system, car charging, other things that one can do on a roof.
Bill Nussey:
That’s a great insight. It is a, I would say, not the most popular answer to the Freeing Energy podcast guests, and as I’ve been accused of being called Battery Bill a lot of times, and recently installed a couple of battery units in my garage, along with my solar installation. That being said, I can’t argue with you. The price of batteries is going to decline rapidly, and if you’re making a price first decision, batteries are probably not the most cost-effective way to save money right now. And I think lithium ion, well I would certainly argue that it’s locked into cars and electric vehicles because of it’s energy density. It might be metal lithium or other variants of lithium, but I think for homes, and residential commercial, I think it’s up in the air who’s ultimately going to win. There’s a lot of benefits to flow batteries and other technologies that handle the unique requirements of a residential and commercial situation, like three or four days of rain. So you might trade off the energy density that’s the benefit of lithium ion for the ability to have tanks and flow batteries and things like that.
Speaking of the American Made Solar Prize, a really interesting company just won. A couple of companies won, but one is called… Basically make a flywheel that acts as a phase, and it basically ties to the inverter and it makes a phase that you could actually operate a solar inverter without having any battery capacity and still charge and run your house, even though you have no battery, which is as far as I know, more or less on the drawing board of most of the inverter manufacturers, but they’ve done it with a very inexpensive, shockingly brilliantly simple mechanical solution, which fits in the size of a suitcase. I do think that all of this world for residential is going to be up for grabs and the architectures and technologies are hard to predict today.
Martin DeBono:
The other think I’d point out to your listeners is as an industry we need to do a better job in setting expectations. I don’t take great pleasure in this, but I do read the Facebook groups of various battery suppliers and most people who buy a battery feel like their life is going to be able to go on when the power goes out, and we know that it’s simply not true unless you’re spending over a hundred thousand dollars in batteries, because you can’t run your AC system, your refrigerator, your battery is going to be drained really quickly. And the number of people that have disappointing stories because they went batteries I think is something that we need to look at as an industry, just as early solar installations where people would not tell their customers, “Hey, when you go solar and the power goes out…” They would let people think that they’d still energy, which is not the case.
Martin DeBono:
So make sure you really understand what you can and can’t do when the power goes out. The other thing you’ve said, what’s important to note about the chemistry, the reason that solar power is so inexpensive is because we’ve achieved incredible scale. Once, basically, we decided that it’s going to be some type of silicon that’s going to make the panel, prices have come down 90%. until the battery chemistry equation is decided, we will not see the scale in manufacturing that will allow prices to come down so quickly.
Bill Nussey:
All great points. Thank you. I want to loop back to a point you made a little earlier that I think is really key. When I was getting my solar panels installed, I had to get my homeowners association to approve it. I’m the first person in my neighborhood to be so cutting edge, big surprise. And their main concern was that the panels not be visible to the street, and that limited the amount of solar I could put on my roof, the potential of building integrated photovoltaics is that they don’t look like traditional ugly panels. In defense, mine don’t look that ugly, but they’re definitely sitting on top of my roof. So what does GAF Energy’s vision for the aesthetic side of this? Where do you see it going? And what do you guys do?
Martin DeBono:
So let me tell you that as a solar company people talk about aesthetics, they do the head nod towards aesthetics. As a roofing company, aesthetics is a huge influencer in what we do, how we build it, where it’s built. It’s remarkable the infrastructure that GAF has to do consumer testing on aesthetics, and the ability to tap into that has been eye-opening. So you’re right. In the solar industry, you look at an all black panel and you’re like, “That’s a good looking solar panel.” You show that to 50 consumers and 45 will not be able to distinguish the all black panel between a typical front contact panel with a silver frame. What they’re going to see is a wart on the back of their home.
Bill Nussey:
A wart on the back of their home. I’m going to remember that. That’s good.
Martin DeBono:
So we’re really focused on aesthetics. Now, you can’t look at aesthetics alone. You have to take into what can you aesthetically do and still provide a value proposition against the utility bill. I think that the market for people who provide purely an aesthetic solution, where it would cost more than the electricity they buy from the local utility is a very small market, but we are doing some very, very cool things to make your homeowners association not even have an issue to put it on the front of your home. I’m not at liberty to say now, but the idea would be to make a very, very good looking solar system that is waterproof, that is 25 years in energy production guarantees, and people will just be like, “That’s the way solar should be.” They’ll see that, and they’ll say, “Yes, of course. Of course every house in the future will have solar.”
Bill Nussey:
That vision is so compelling and I can’t imagine that you guys aren’t going to deliver on it and you’ll have many others doing it as well and it’s going to change the world. Why build a roof when you can build a roof that will power your house? One of the last things I wanted to ask you before we wrap up is you guys were not necessarily the only company going after rooftop integrated solar. There’s a company a few people might’ve heard about in the West coast, Tesla, I think. So they are obviously installing regular old panels, but they have an offering which is more of a shingle looking technology, and they’ve gone through a few iterations. There’s sightings of people that actually say they’ve had one installed on the roof. So I’d love to get your take on what it’s like being in a market with a company that’s making so much noise lifting the tide for all the boats, but what’s it like to be in the market with a company like Tesla?
Martin DeBono:
Yeah, it’s good. Rising tide lifts all boats. The attention that Tesla is bringing to integrating solar into rooftop is fantastic, and the more people that recognize, “My only choice is not a flat screen TV bolted on top of my home,” the better. Because once they start looking around for solar roofs, solar roofing, building integrated solar, then they’ll come upon us, and now we’re able to educate consumers and they can choose whomever they choose. So at this point, given the size of the BIPV market versus the size of the solar market versus the size of the roofing market, it’s probably an order of magnitude each step. The BIPV market is one 10th the size of the solar market, and the solar market is maybe one 20th or one 30th the size of the roofing market. So it’s good to have Tesla out there raising awareness, and from a competition perspective, it will only make it better, and when that happens, consumers will win. It sounds very trite, but it’s true. The market in its nascency is going to undergo a lot of changes and we’ll hopefully make each other better.
The other good thing about having Tesla, it’s not like you’re having a small company. Tesla, I believe this morning, is the fifth largest capitalized company in United States. So it’s not just like any company out there. You have one of the largest companies by market cap in the world going after this market. That means that they will drive innovation. They will drive people towards this market, which means roofing companies and solar companies need to take heed. And to my point earlier, when you have a company that big saying, “Hey, the future of solar is building integrated solar,” you may want to listen to that. When you have large market cap company, world’s largest roofer saying the future of solar is building integrated solar, I believe people should take heed to that. We have a lot of work to do. As I mentioned, the building integrated market is only one 10th of the regular solar market, but we’ll get there. No doubt.
Bill Nussey:
Yeah, I think it’s like a two fish arguing over who’s going to get the next sip of water in the middle of the ocean. The opportunity is so large that you don’t even notice the other fish if you don’t look around for him or her. But it is interesting that Tesla is making a lot of noise in this space, and GAF Energy already has a huge number of installations, so you’re already toe to toe with Tesla. Is that right?
Martin DeBono:
I would say in the BIPV market, absolutely.
Bill Nussey:
Good, good. Keep them honest. Don’t let them run away with it. The automobile industry started a little too late, so they’re having to really play catch up. Hopefully in the solar roof side, you guys can keep them more on their toes and get modest competition all the way through. Well, this has been fantastic, Martin. I love the stories and the vision that you guys are building, and you have some great insights that I think our listeners are going to love. We always wrap up our interviews with a couple of four quick questions. We ask everyone the same questions. We call this the lightning round. So the first question is what excites you the most about being in the clean energy industry?
Martin DeBono:
The immediate impact one has with the delivery of their products.
Bill Nussey:
That’s awesome. And if you could wave a magic wand and see one thing change in the transition to clean renewable energy, what would it be?
Martin DeBono:
Have all energy sources compete on a level playing field. That means tax them the same, incorporate all externalities the same, incorporate the impact on health the same, put them all on a level playing field, and let the best energy with all things considered win.
Bill Nussey:
Absolutely. I love it. I love it. I’m right there. All right, third question. What do you think will be the single most important change in how we generate, store, and distribute electricity in the next five years?
Martin DeBono:
This sounds self-serving, but I truly believe it. It’ll be the products that companies like GAF Energy create to integrate energy with roofing materials. For too long we have relied upon a single method of solar power, that being the module, and we have to create a new method, and I think that’d be super exciting to people.
Bill Nussey:
I would expect no other answer, and I completely agree with you. Building integrated photovoltaics, solar roofs, absolutely going to be one of the biggest changes. Last question. A lot of people ask me, and I’m sure ask you, that really care about this movement, this transition to clean energy. What can I do personally to help make a difference?
Martin DeBono:
I’ll steal note from your book. Call it local energy. Understand the costs of getting energy and then lobby your local politicians, your public utilities commissions to say, “Hey, I want local clean energy.” Because we didn’t say what’s the most frustrating part about being in the clean energy industry. The most frustrating part is the politics or the entrenched interests and what people will do just to keep making money the way they have made money for a long time, as opposed to if it were truly a free market where the market would evolve to. So if someone asks, “How can I help make the change to clean energy?” Listen to your Ted talk, understand how the energy market works, and then lobby and elect politicians that would say, “Hey, you know what, the existing model for electricity is based on a broken social contract between utilities and the constituencies they serve, and we need a new one.”
Bill Nussey:
Man, Martin. Dropped the mic on that one. And I’m going to have to use some of those quotes in my book because that’s a big topic I’m covering in it, and I couldn’t agree with you more. We need the utilities for sure. They play an important role. But the role that was constructed a hundred years ago, Sam Insull, Thomas Edison, those guys would never imagine the technologies. They never fathomed that your house could generate all its own electricity. The model just needs to change. This has been an absolute delight. I love talking to you. I love your energy. I wish everyone could see you talking as I’ve been able to because you make all the points even more compelling and I’m totally bought in. I’m now a true believer. GAF Energy, you guys are going to rock, take on the world, and I’m glad we’ve had the privilege of hearing your story today, and in a small way, helping get it out there so that people know that there’s a great option emerging and a great visionary behind it. So thank you very much for sharing your ideas with us today.
Martin DeBono:
No, thank you very much. It was my pleasure.
