BIGGEST RISK with Josh Goldberg
J Darrin Gross I'd like to ask you, Josh Goldberg, what is the BIGGEST RISK? Josh Goldberg Well, I'll throw you a bone first. So when you go solar, we actually require that all of our borrowers have insurance on the system. A lot of times it's covered in the underlying property insurance, but it is a great asset. You do want to make sure it's insured. Weird things happen, like hurricanes and whatnot. So there's, and we actually have had a casualty event where something happened to the system, unfortunate, but insurance covered it, and we got made whole. The borrower got made whole. Everybody was happy. So I think, like for us as a business, you know, we're 40 person startup, and so there's a lot of risks. Some of them are execution, right? Like, can we continue to deliver a great we sit in between three parties. We partner with capital providers to deploy capital, we partner with solar installers who offer our financing, and we partner with business borrowers, right? We have to deliver a seamless, efficient experience as we grow, and we have to keep getting better and better and better at it. So the our biggest risk, I think, is just execution. Can we kind of control it? But at the end of the day, like, like interest rates, right? Interest rates, their problem for a lot of for a lot of reasons. As rates rise, our cost of capital rises, as our cost of capital rises, we have to pass that on, right? And so, I mean, we've seen just like, an innate and an 80 basis point increase in Treasury rates in the past month. Unfortunately, despite the fact that rates were coming down, right? And so that that at some point makes our our capital more expensive, and at some point, if, if our cost of capital keeps getting more expensive and utility rates don't rise, the deal is not quite as good, right? So that's like a risk that it's kind of out there in the world. I think another risk is this is a relatively immature market, right? And so I mentioned like referral all works, like, if the one business owner has a great experience, they'll offer folks. If they don't have a great experience with us, or with the installer, or with solar in general, they will detract folks don't go solar, right? And so I think it's incumbent upon us to help, and then we spend a lot of time helping make sure that our borrowers are getting what they think they're getting right. We're a little parochial, because we want them to have, like, a fantastic experience. I think as the market matures, though, that'll be less of an issue, because, you know, you'll have higher quality installers, and some of the newer entrants who aren't good will kind of filter that out. But really it's like, this is everyone's first time doing it right. And so you just you can't afford to have bad experiences. You can't afford to have buyers. You know, they think they're saving 20% they only save 10. Well, they're gonna be upset, right? So how can we kind of nip that in the butt? Or they think that their utility is going to pay them for the surplus, but not that they don't, right? So how can we make sure that they're kind of getting what they felt they're getting? And really, I think that's that's key, because if I think this, if done right, it's a fantastic experience for everyone involved. The installers create local jobs in their communities. We deploy capital and make a decent return and grow our business. Our borrowers save money. They can save money and they can up. They can invest in their in their properties. They can get higher sell prices. If they're owner occupied, they get more cash flow for themselves. Maybe they can grow their business. They can, if you're a farmer, you can hedge your rates into the future. That's great, as long as it works, right? And so really, it's just great customer experience, expectations met, which is all about reducing risk, right? High quality installer, long term financing. Make sure the proposal is accurate, get it insured. So if you know,
