Aaron Nichols talks with Lisa Shulock, Director of Commercial Programs at the Philadelphia Energy Authority. Lisa is a policy expert dedicated to proving that solar is a powerful tool for economic stability and poverty reduction (and not just for hippie tree-huggers). Listen to this episode on: * YouTube * Apple Podcasts * Spotify Connect with Lisa on LinkedIn here. Expect to learn: * Why commercial landlords often hesitate to invest in rooftop solar. * Why seasoned executives who know how to buy real estate still find solar proposals intimidating and difficult to compare. * How changing state regulations in Pennsylvania could transform empty warehouse roofs into local clean power plants. Quotes from the episode: “For commercial property owners, procuring solar is something most companies have no experience with... It doesn’t usually reach the top of an executive’s priority list to figure out how to do it because they don’t know where to turn for guidance.” — Lisa Shulock “80 years from now, I don’t think we’re going to be using fossil fuels any longer... the technologies we’re using now to convert the sun’s energy are going to be ubiquitous and incredibly inexpensive.” — Lisa Shulock Transcript Aaron Nichols: Lisa, there is so much available commercial real estate that we could put solar panels on. What do you think has held commercial solar back? Like, why don’t we see it on every warehouse in America? Lisa Shulock: Aaron, that’s such a good question. And I think there’s a number of different reasons. One is, historically, solar has a reputation of being expensive and only for elites or tree huggers like myself. But that’s not true. And I think this is a perception problem that the industry is confronting—has gotten better—challenging that, but it’s still a legacy with solar. In fact, the program that my organization, the Philadelphia Energy Authority runs called Solarize Greater Philadelphia, in our program for homeowners, in the last few years when we started offering a low cost lease option, more than 80% of the contracts signed for solar on a homeowner’s roof were with low and moderate income homeowners. So we’re totally blasting that misperception, but that’s certainly one factor. For commercial property owners, procuring solar—and this is true for residential as well, but for focusing on commercial, which is what I focus on—procuring solar is something most companies have no experience with. Like, they know how to buy office equipment, know, go buy a Xerox machine, they know how to do that. They need a vehicle, they know how to do that. If they haven’t done it at work, they’ve certainly done it at home. If they manage many, they certainly know how to lease or purchase buildings if that’s necessary. But very few people have experienced purchasing solar. And I think it’s kind of intimidating and it’s—doesn’t usually reach like the top of an executive’s priority list to figure out like, okay, if I wanna do this, how do I do it? Because they don’t know where to turn for guidance, I think. There’s two more things I would want to say. One is that even if it does get to the top of somebody’s list, it’s not always easy to compare solar proposals. So different companies, different solar developers, solar installers may make different assumptions about how much electricity they think is going to be used over the course of the 25-year lifespan each year, or what kind of financing solutions are offered, or what the rate of increase of utility prices will be. So when you’re looking at solar, one company might be comparing it to a different price than another. And sometimes, although fortunately very infrequently and obviously not Exact Solar, there are some unscrupulous actors in the market. So I think that is an impact as well. The program that we run that at again, Philadelphia Energy Authority in partnership with the Pennsylvania Solar Center, we’re addressing this problem by providing free technical assistance, including developing feasibility studies, distributing requests for proposals to solar developers, and then helping property owners to select the solar installer that provides the best value for them. So making that apples to apples comparison with the different proposals from solar developers. That’s one way we’re combating that particular issue. And then lastly, and maybe most importantly, I’m not really sure what order I would put these in, that again, I’m speaking of commercial properties. Most are owned by a developer or an investor, and then it’s rented to tenants. And it’s usually the tenants that pay for their utilities. So, while installing solar reduces electricity costs for the tenant, the owner is the one that needs to recoup the cost of the solar investment. So you’ve got this mismatch between the financial incentive. Even when a property owner has a lease that allows them to pass along the cost of the solar investment to the tenant, those leases, excuse me, are usually significantly shorter than the lifespan of the solar. So there could be a period when the owner is still paying back the cost of purchasing solar and maybe they don’t have a tenant that they can pass the cost to. So that is a significant barrier to solar on commercial properties. In Pennsylvania, we don’t have great financial incentives for solar. If you’re like me and you, when you travel and you, whether you’re driving over to New Jersey or up to New England and you look around for solar panels wherever you go, you’ll see that certain states have much more solar than we do in Pennsylvania. New Jersey has like all the same, you know, in terms of how much sun we get, it’s the same. What’s different is that some of the incentives are different in New Jersey. And even though it doesn’t feel like it right now, our commercial electricity rates are relatively low. They’re going up. We don’t want high electricity prices, of course, but higher prices do make the economics of solar pencil better. I mentioned a couple of the solutions to these problems. I can go into a lot more of them if you want me to, but that’s why we don’t see solar on every warehouse in every parking lot as much as I’d love to. Aaron Nichols: Yeah, I like to joke that, you know, a lot of people will say we don’t want solar in our neighborhood because it’s ugly, but you know, it’s very hard to make the case that you’re going to make a commercial warehouse worse to look at by putting solar panels on. Lisa Shulock: Yes, and I actually haven’t heard the ugly part before about solar. I’ve certainly heard it about wind turbines, but yeah. Aaron Nichols: Yeah. Yeah, we deal with a lot of homeowners who say like, we don’t want it on the front of the house because we just don’t like the way it looks. We deal with that. And thank you, by the way, for just, I noticed that you added that little caveat. You said there was a lot of unscrupulous actors, obviously not Exact Solar. So thank you for putting that in. I’m very— Lisa Shulock: Mmm. Some. Right. And I think there’s fewer in the market now. I think it’s a more competitive market. When we first launched Solarize in Philadelphia back in 2016, 2017, in the residential space, there were a lot of companies that were taking advantage of customers. We don’t see that nearly as much anymore. And I think that’s in part because we’ve been able to grow the market working with Exact Solar and some of the other Solarize partners in the Philadelphia region. Aaron Nichols: So going back to business owners, why do you think, like when we’re talking about the education gap, the knowledge gap, and also the lack of incentives for them to spread the word, I mean it seems like if a business owner does go solar and they dramatically lower their operating costs, they’re probably less inclined to tell another business owner about it just because of competition than say like, Jim would be if he put solar on his house and he lowers his bills and he tells all his neighbors. I think that’s one aspect. I also know that business owners are just much harder to get in touch with, but what do you think the average business owner doesn’t know about how much going solar can actually help them? Lisa Shulock: Yeah, I think a little bit back to what I spoke about earlier, I think most businesses don’t know that solar can really help their bottom line. And it’s interesting that you think that maybe they would be reluctant to share with their competitors. Maybe. But I also think that I certainly—like I think there’s lots of associations where best practices are shared. I’m not sure that it’s not like it’s an industry secret that solar can help reduce the bottom line. I think they also don’t know that it is affordable and that there are financing products that make it possible to go solar. And I certainly don’t need to tell you this, Aaron, but I think one of the most significant things about solar for anybody who has to pay for electric utilities is that it stabilizes and makes your electricity costs predictable and stable for the next 25 to 30 years. You’re hedging on the electricity market and you know whatever you’re paying to pay back a loan that you’ve taken out or if you’re paying a third party leasing company or paying through a third party like a power purchase agreement, you know what that cost is going to be every single year. We have no idea what electricity rates are going to be 20 years from now, no less, just one or two years from now. So it gives you predictability and stability. I think that is probably even if in some cases, maybe somebody would be paying a little bit more now than they might to PECO or to another utility where they are, but what they can be guaranteed is it’s gonna be a better rate than at some point soon in the future. Aaron Nichols: Yeah
