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EXECUTIVE TALK SERIES:
The Importance & Impact of the New Energy Information Infrastructure for Solar Installers
Jan Rippingale – Founder & CEO of Blu Banyan, talks about the importance and impact of the US Department of Energy’s Orange Button Data Standard, and how it is fueling the future of solar with faster deployment and higher profitability for installers.
Why this is important:
This presentation highlights the initiatives driven by the US Department of Energy to enable residential, commercial, community, and utility-scale solar installers to deploy more solar faster, and more profitably.
It is important that solar installers understand this industry wide digital transformation that will deliver:
1. higher productivity in their business,
2. more bandwidth to take on more projects,
3. increase access to capital, and
4. lower soft costs to deliver higher profits.
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Full transcript:
I am Jan Rippingale, the founder and CEO of Blu Banyan, and today I’m going to talk about the new energy information infrastructure, starting with the United States Department of Energy’s Orange Button open data standard. This is an absolutely essential concept. It effectively is the wiring in the walls for us to do a digital transformation for the solar industry. I think everyone is going to enjoy the new information.
So why do we need to do this?
The United States residential solar PV market is expected to grow at a compound annual rate of 15.4%. This growth rate is tremendous and huge. It is absolutely what we want and need to affect climate change and the stress and the strain on supply chain and labor costs and system development and accounting is tremendous. This needs to get automated and harmonized so that all of the innovations can diffuse quickly throughout the entire ecosystem of solar installers, so that we can do this successfully at quality and scale
We are set up for massive growth since 2000, but in 2022 we had a substantial setback with our supply chain problems that have been significantly offset by the Inflation Reduction Act, which is going to kick in a little bit in 2023 and then substantially over the next five years. So, we are expecting tremendous growth in this industry absolutely worth everyone’s time in learning how to do this, and it is only going to get harder to do it later. As you scale and develop new systems, the sooner that you do it, the sooner you gain the benefits. As you scale even more in subsequent years, you reap all those benefits of having the clarity that you defined initially to get going.
So, in order to reach the 40% of the US electricity demand that has been put out there as the goal for the Biden administration for the solar industry, this is what we would need to do to meet the United States requirements for the Paris Climate Accord.
In order to meet that goal for 40% supply by 2035 and 45% by 2050, this is how much solar we have to deploy. We need to double the amount of installed solar between now and 2025, so that’s an average of 30 gigawatts per year, and we need to make up for our miss in 2022, and then we need to double it again between 2025 and 2030 to 60 gigawatts a year on average.
This is a tremendous amount of solar to install, and it’s going to take the entire ecosystem to do this at quality and speed that is required. So, the pace of this change demands new approaches and technologies. If we think about this, and you look at the oil and gas industry, they took 120 years to build this level of infrastructure, and we are going to do it substantially in a decade, and then we’re going to do it again, and again.
So, the only way to compress that amount of change requires new approaches and new technology. This is how and why we are so committed to the digital transformation of the solar PV industry.
The US Department of Energy started the Orange Button Initiative and it is specifically meant to drive down soft costs for residential, commercial, and utility scale projects.
The players that are actively engaged are Blu Banyan and Sandia National Labs. We are co-leading the working group.
The SunSpec Alliance had the initial implementation and was a grant recipient from the Department of Energy and continues to be actively involved. And then, over time, we’ve got other industry players that are making this happen.
You’ll notice that it is financing companies and software companies who are driving this innovation and all of the installers are going to benefit from having better software and better pricing on their financing by doing this. There are several pieces that we’re going to talk about in the taxonomy working group. And to be totally transparent, we started with just the taxonomy definitions, the main things that we needed to have common terms for agreeing with each other about what needed to be the universally defined terms to move forward and speak apples to apples to each other.
And what we found is that we needed to extend that to the reference data sets and then common tools. So, this started as a smaller group with a smaller scope, but the scope has enhanced and the group expanded substantially.
So, the Orange Button Initiative, this is the original data set and the key players. Blu Banyan was the lead developer of the Orange Button Working group, working with all of these software companies – Enerflo, Aurora, Ecogy Energy, to deliver and integrate with SolarSuccess, the software specifically for solar installers to run their business. And we need each of these specialty software companies to interface with and integrate with in a harmonized way.
NREL and ddditional government agencies are also producing tools like SolarAPP+ to automate permitting. So, these players together are working on this initiative to actively make it a reality for the entire industry.
So, what is the energy information infrastructure?
As I mentioned, when we started out, we thought this would be enough that we could have the Orange Button as a data standard, and it would take off somewhat like SCORM or XBRL or the Financial Data Exchange.
SCORM is the standard utilized for learning management systems, to enable you to send educational materials across from any company and be displayed in other software.
XBRL has been successfully implemented to take all of the SEC’s financial data across 30,000 publicly traded companies over the last decade and a half at this point. And they have successfully got all of these disparate companies to speak in a common language so that the SEC can compare and contrast the different business opportunities for all investors.
An FDX is used to interface specifically with the banks. Every time you use an ATM, you’re using an FDX exchange.
So, these common terms in those definitions are very powerful and have made industry-wide changes in the past.
We thought this would be enough, but we were wrong.
We also need common data sets with the AHJ Registry and the Product Registry being the first ones that we have pulled in together. These common data sets are solving particular problems for everyone and have been the primary driver of adoption for the energy information infrastructure.
I’m going to talk about these two in depth in subsequent talks.
With these common terms and common data sets, we have begun to build tools used for the entire industry that are also in common. This is enabling substantial and tremendously leveraged change for the entire solar industry.
And the permitting changes that I see in SolarAPP+, I am expecting are going to end up driving how our permitting is done in construction in general in the United States of America, bringing that area of our industry up to the 21st century.
And of course, all of this has to be wrapped in cybersecurity protocols.
So, this is the energy information infrastructure that we need that is working, that is driving adoption and making game-changing systemic shifts at scale. This is what we are bringing to the solar industry and the first adopters will experience the advantages sooner, and eventually everyone is going to need to move to the new model in order to compete because it is such a substantially significant improvement in operational efficiency.
So, what are common terms? Why do we have these?
In the Orange Button Initiative, the primary interest in having common terms is that we need to have easy data exchange. Very much like you need the wiring in your walls to work a specific way, you’ve got color codes, you’ve got ways of making connections. There are a tremendous number of standards involved in specifically what you need to do to wire up a house.
In the same way we need the same data exchange standards defined so that we can wire up our software to talk to each other well. This reduces project costs. We lower the project costs because we are speaking the same language. We understand each other the first time. Everything is clear and crisp as we move through the lifecycle expected, and so we can get the easy handoffs that you would expect from qualified electricians, for instance. And it enables us to extend for new technologies, just like the electricians have extended their knowledge about main panel upgrades in PV to include storage, and they are fundamentally operating on the exact same vocabulary and the same principles.
By having these common terms defined in the Orange Button standard, software is able to extend from that common foundation and move forward as we move into the Internet of Things (IoT), electric vehicle charging, and the many, many smart housing optimizations that are here and coming.
What exactly makes the Orange Button open API work versus any others? What is it that we needed to do to have this be coherent and compare apples to apples?
So, I’m going to dive in just a minute to show you what we needed to do. If you’ve got any experience merging Excel data sets, you will recognize the value of having a fully defined term right from the beginning. And fundamentally, this is the key innovation of the Orange Button API that is then brought forth and utilized across each of the terms and elements specifically.
But what we are doing is we are fully defining EnergyAC, for instance, and that makes it able to have the field of value and the units are included, right with that energy unit. Start time and end time are for production and decimals and precision. By pulling in this information together, particularly the units, we’re able to have the same energy measurements work for the Internet of Things (IoT) where you’re just doing watts based on the lights that go through the walkway that are motion triggered, and you can see how long they were on for, and you can plan and organize and optimize intelligently based on having a completely defined unit there.
You can do this in kilowatt hours if you’re doing a residential home or megawatt hours for utility scale implementation. And the same energy AC unit, because it’s a fully defined term will work to describe what has happened historically and what’s going to happen now and what’s going to happen in the future so that we can compare and contrast and learn from each other, which is where our biggest innovations are going to come.
So, these common terms results in us having a completely defined term, which is why Orange Button works. This is the core as everything as you would expect, just like where you were wiring up the walls, it actually comes down to a few simplicities. But having this complete term is the key simplicity for the Orange Button, common terminology.
Blu Banyan is leading this initiative, but who is playing?
So, we built SolarSuccess, which is the award-winning business management software that supports residential, commercial, and utility scale solar installers and developers. We have over 50 companies, including the top three residential solar contractors in the US on SolarSuccess, and more than 33% of the top 100 residential solar installations in 2022 is already on SolarSuccess and utilizing it.
Our clients have on average gained 50% higher operational efficiencies by having a single source of data from project management and accounting.
SolarSuccess has the core elements of running a solar company, and we recognize that our clients want and need to hook up with specialty software that are optimized for particular areas like lead generation with GetTheReferral.com and dialers, proposals, signatures, financiers.
Each of these areas are partners that have their software of their own, and we are able to hook up our clients to these software tools, so they are able to function much more efficiently and harmonized.
By bringing in the property data directly to the project, you will know the assessor parcel number for the project, and don’t have to go and spend the five to 10 minutes to look it up on the website for the county. You just know it automatically and can move forward to the next step when setting up your design and permitting documentation.
Customer engagement, file services, warehouse management, equipment, distributors, other connecting systems, Department of Energy tools, monitoring systems, asset management, field service.
Thus, you can see there’s a lot of specialty players in the solar installation market, and we want to be able to bring them in, harmonize their data right up front so they’re actively engaged in the workflows so that we have that optimal operational efficiency internal to the solar company and across all of their partners.
And you can see that the Orange Button is starting to flow across multiple areas of these software vendors. It’s very exciting.
These are the common tools that we are applying to address the soft costs breakdown and improve these operational efficiencies.
Reducing soft costs is actually our metric, so it is really tough. All of the different pieces need to work together well and consistently in order for these soft costs to really go down.
These are the different technologies and tools that we hook up with that you can see reduce each particular area to reduce these soft costs.
So having common terms really does help the entire industry across the entire cost stack to improve its level of play. Everyone benefits from having the common terms and the digital transformation for the industry.
And those of you on SolarSuccess are benefiting now, and those of you who come soon will benefit sooner than everyone else who’s going to follow.
So here is everyone that’s benefiting to date. Blu Banyan is all focused on the solar installers. We see the solar installers as the primary mover, increasing the capacity to get the job done, to deploy more solar faster, and everybody else around the circle is supporting them to make our solar energy infrastructure a reality.
So, data harmonization, integration, and automation will help us to deploy more solar faster.
Our number one metric for that is that higher productivity – you have accurate data through standard formats and with seamless integrations you get more revenue per employee – you can run more jobs, you can do more projects with fewer people on the backend who do the job.
The client experience is better and the company is better. You sleep better at night. It is the world we all want to go to. This also increases the bandwidth so that you can complete more projects faster. And when you are doing that, you could actually take on more projects and retain the same staffing levels and just get those projects done. The same number of staff can handle more projects. And that in makes everyone excited.
You get more sales, it’s a very virtuous loop to lead to growth and scalability.
The third major piece of this is that you get more financing and better financing. By operating on these data standards where we have complete terms that are defined and the clarity that the financing companies need to know that their dollars are not at risk.
Every step of this that we do, that automates and builds up to scale and to standards where you can demonstrate that you’re consistently meeting those standards, you get better financing and it reduces the cost for the homeowner. And you simply get more jobs done, better use of resources altogether.
And this is where you get the higher return on investment. Lowering soft cost delivers tremendous ROI for solar businesses, enabling the tremendous benefits of unit economics being optimized. So, the number of projects that you can run and what the cost are in those projects are known, clarified, and then harmonized as you go through and optimized across each of these areas.
It’s fun, exciting, and makes you rich. What isn’t there to love?
What we’re going to talk about next is how to improve your project execution, specifically with the AHJ Registry, the Solar Product Registry, what it is and why we need it, and then how we’re tying both of those together to give you the SolarAPP+ integration and automation so that we can take the 27-56 days permit times and make them one day and then eventually, 30 minute permit applications.
That is the vision. So, lots of exciting things coming forward, and I want everyone to understand the foundation and the fundamental wiring that enables us to discuss these innovations with credibility.
Thank you.
