Herve Billiet (00:00)
Hi everyone, and welcome to the podcast about What Solar Installers Need to Know. I have the great, immense pleasure today to invite people from over the Atlantic Ocean. Jerónimo, welcome to the podcast.

Jerónimo Lozano (00:13)
Thank you very much for inviting me. It's also an honor for me to be here and talk deeply about the solar market here in Spain.

Herve Billiet (00:22)
Yeah, fantastic. So, Sunvoy is a platform built by solar installers, and little did I know that common problems solar installers face in the US are actually the same problems all over the world. I think you're the first one that's a non-US solar CEO. So a little bit information about SolarYou based in Madrid, Spain.

You guys did about one million in revenue last year. You had two million this year. You operate everywhere in Spain, and you have around 22 people. Jerónimo, tell us a little bit more about SolarYou, how you got started, and what you guys are doing.

Jerónimo Lozano (01:00)
Nice. The data you just said is perfect. We're only two years and a half old, which was actually a bad year for the solar industry here in Spain. But in the beginning, how it all started, I used to work in consulting, doing energy projects with one of, we're three co-founders.

We used to work together with one of them, Edu. I worked in consulting, doing energy projects. Not self-consumption, but big utilities and stuff. He then went to a big utility in Spain to do self-consumption for B2E. And then I moved to the alarm industry here in Spain for homes.

Herve Billiet (01:43)
Mm-hmm.

Jerónimo Lozano (01:43)
And this is where I met my other co-founder, Raul. He was in the sales department, the sales area.

And we always wanted to start the business. So we started to think and did that and stuff. we found that in, actually in the US, there were some alarm companies that had started solar business. For example, I remember Vivint Solar,

Herve Billiet (02:01)
Sure.

Jerónimo Lozano (02:06)
which was an alarm company, started Vivint Solar and afterwards. ADP also acquired the company called Sunrun, I don't remember. And so there were a lot of synergies between the commercial approach in alarms and solar. So we said, okay, maybe we know how to sell alarms, we will know how to sell panels. We needed a genius from self-consumption, that was my other friend, Edu,

Herve Billiet (02:25)
Mm-hmm.

Jerónimo Lozano (02:31)
who I worked with before. So we started the business in, I think it was April 2023, with no money, just the three of us, starting to sell at the beginning, outsourcing absolutely everything, and validating that we could sell, which is like one of difficult part here in solar. And then our first year, we started, it was just the three of us in a free coworking

Herve Billiet (02:52)
you

Jerónimo Lozano (02:57)
with no money and in the first year we could sell more than 1 million euros which was like a great success. And then in the second year which is to 2025, like the first full year and the second full year we're gonna reach 2 million hopefully and so we're very happy and what we do is basically solar self-consumption for single family homes.

Herve Billiet (03:10)
Mm-hmm.

Jerónimo Lozano (03:20)
We also do heat pumps, batteries, EV chargers, evaders, panels, and then we give additional services afterwards. And that's what we do, we're currently more than 20 people. We're based in Madrid, but we, as you said, we do installations in all Spain, even the Canary Islands or Islas Baleares too, Majorca and all this stuff. Yeah, that's more or less what we are.

Herve Billiet (03:46)
All right, and who's your typical customer? Is it just residential, maybe some commercial?

Jerónimo Lozano (03:51)
Like our typical customer is a home owner person, 60 years old. But we've also done some commercial, not a lot yet. We're going to get into it. But we wanted to focus on this commercial model for residential, which is different than when you go for bigger installations. And it's more similar to the alarm process that we knew before.

So we mainly do homes.

Herve Billiet (04:18)
So there's a lot of commonalities. You mentioned that in 2023 was a bad year for solar in Spain. Tell us more about like what happens kind of policy wise in the past and today, and then why start a solar business in a bad year.

Jerónimo Lozano (04:34)
Okay, that's a good question. Like in Spain, solar grew exponentially. I'm pretty sure it was in 2022. So it was a great year and we had a lot of subsidies from Europe because after the start of the war in Ukraine, in Spain, for example, and in all Europe, natural gas.

And in Spain we have this market for energy which is a competitive market where the marginal technology entering sets the price, okay. So whenever natural gas is very expensive then you get energy in your house very expensive. So high prices and subsidies from Europe was like the perfect storm for the solar market to explode in Spain.

Herve Billiet (05:09)
you

Jerónimo Lozano (05:18)
in and I think also 2021. And in 2023, subsidies started to disappear, which is something that I also kind of like because I don't want to market completely depending on subsidies. And there was still a lot of room for growth because in Spain you have penetration of around 10% in maybe in single family homes. That's why we also wanted to enter this segment.

And so after these subsidies from Europe, instead of doing, I'm going to talk about big numbers, okay, but instead of doing 300,000 installations in Spain, that was like the market volume, it was like half that volume, maybe 150. Okay, so it's not that bad. And now it's maintaining its stable. And for me, it's the typical market it can go fast, it can go slow, but it's going to go because it's

Herve Billiet (05:56)
Mm-hmm.

Jerónimo Lozano (06:11)
when you put money into it, you get a great deal. So it's going to work for sure. Maybe fast, maybe slow, depending on how much subsidies it gets. But it's running good nowadays. It is true that by that time there was a lot of new solar companies appearing. And obviously some of them, the market is half the size it was, have to close.

Herve Billiet (06:33)
Let's speak about some data points, some numbers. So in the US, you have electricity prices to residential homes.

In Virginia, you need to count around 15 cents per kilowatt hours. You have places like in California with like 50- 60 cents per kilowatt hours. You have some cheaper markets where you go like close to 10 cents per kilowatt hours. But that's kind of the range. Expensive places like 50- 60 kilowatt hours, the bottom price is around 10. And then you have a lot of states like 30, 40 or 20 cents per kilowatt hour. So what are the prices that you see in Spain?

Jerónimo Lozano (07:09)
That's a good question. America is huge so that happens. Spain you have the same price for all the area. And it depends, but in the year when the Ukrainian war started, maybe you could get 30- 40, 25- 35, something like that. Depending on what you have is different prices around

Herve Billiet (07:30)
huh. Yep.

Jerónimo Lozano (07:35)
the 24 hours of the day

Herve Billiet (07:37)
You pay more depending on the time of day.

Jerónimo Lozano (07:40)
It depends, because you have this regulated market where your prices are indexed to the pool, to the real prices. And then you have this pre-market where retail companies can say, OK, you're going to pay $0.12 per kilowatt hour any time of the day. So currently, are some we can be paying between 10 or 15, depending on the retail company.

Herve Billiet (07:46)
⁓ huh.

Jerónimo Lozano (08:08)
But there lot of tariffs between 10 and 15. Last year it was a bit more, but maybe next year natural gas gets expensive again and you have 30. But yeah, something like that, which obviously is an important data and information for the solar market. If energy is very

Herve Billiet (08:16)
Okay.

Jerónimo Lozano (08:27)
cheap, then your installation, maybe you need more years to get the payback, but

you get certainty. For me, the big problem here is uncertainty in the future. In Spain, you don't know what you're going to pay the next year. panels

Herve Billiet (08:43)
So you guys sell on that? Is that one of the reasons why people buy Solar from you? Because once you pay for it, it's cash deal or maybe loan deal?

How do you sell? What are some key sales arguments? And what are some financial mechanisms you guys offer? Loan, lease, cash.

Jerónimo Lozano (09:00)
Definitely that's a big argument. Some people tell you, but this year energy is cheap. And you tell, okay, look three years ago, which was expensive, and then look 10 years ago when it was cheap, and then look 15 years ago. So you see there's not a stability at all. Also, if you calculate the payback here in Spain, get without any subsidy between, I don't know, four and six years for a system that is going to last

maybe 30 years, so it's the best place where you can put your money on. You're not going to find a better investment, definitely. So, that's one thing and then also in Spain, there's still some aids, some subsidies. Most of them are tax incentives. Some of them in the income tax, which in Spain is very high, probably compared to the US.

Herve Billiet (09:29)
Hello.

Jerónimo Lozano (09:50)
Also in your property tax you pay every year for having a house you have to pay. Then you get some discount on that tax. So that obviously helps a lot. And then you also asked me "How do people pay?", right? How do we offer this? Most of, normally 50% of our clients pay in cash and 50% pay in loans.

Herve Billiet (09:55)
Mm-hmm.

Yep.

Jerónimo Lozano (10:17)
We have some partnerships with Spanish banks, so we can offer their financing products. That's great because one of them, an argument that I like a lot is, you're currently paying, let's say, 100 euros a month. You are going to get this installation and pay 60 euros a month, and you're gonna have no bill or 10 euros a bill. So you're gonna start saving the next month

Herve Billiet (10:29)
Okay.

Jerónimo Lozano (10:46)
without investing a euro. So that's like amazing because you are not selling more spend. You are selling savings.

Herve Billiet (10:49)
Okay.

Jerónimo Lozano (10:57)
And selling savings is for me something incredible.

Herve Billiet (11:02)
Do you have specialized loans like solo specific loans in Spain? Like, are your loans with specific local Spanish banks?

Jerónimo Lozano (11:12)
Normally they are like, I don't know how to say it English, normal consumption credits because maybe you ask for 10,000 euros. They know, like the banks know that we install solar panels. They know who we are. They know why we offer financing to clients. I cannot do a financing to buy in a car. This is not me. I can't do that. I sell financing for solar systems.

Herve Billiet (11:18)
Mm-hmm.

Jerónimo Lozano (11:41)
Normally between 3 and 15 years, that's a typical bill that is worth for clients. That's how you get like every small payment per month below your electricity bill, which is like the good thing. And that's how it works.

Herve Billiet (11:56)
Okay, so more about numbers. In the US, think solar installers, EPCs that do both engineering, procurement, construction, they do it all. The typical price, I think, is around between $2 and $3 a watt. I think there's a lot of companies that are at a $250, $270 a watt range, some are above depending on the markets, of course, but that's kind of like, I think $250 a watt. So let's say you do a 10 kilowatt system, which is a typical

size, I think our average at the time was like 11 kilowatt system. 10 kilowatt system, you pay $25,000. That's roughly where we go at.

Jerónimo Lozano (12:32)
That's pretty cool. I wish it was like in America. Now in Spain, there is a big competency on prices and then systems are typically smaller. Like average system in Spain can be between 4 and 6 kilowatts.

So it's not as expensive as it is in the US. Probably it helps that in the US, the energy is much more expensive than in Spain, as we just said. So yeah, maybe typical system is sold for 8, 9, 10,000 euros, for example. It depends a lot, because it depends if you have batteries or not. I'm talking about systems without a battery.

Herve Billiet (13:06)
Yeah, without battery.

So maybe you said around 10,000 ish. I don't know. So what is the battery that can spot fire? What is it now? Like 10 or 13 kilowatt hours of battery for Tesla. Just taking one data point.

Jerónimo Lozano (13:17)
Okay,

Okay, in Spain you would set probably a 7 kilowatts hour battery of capacity and that would be around 6, 7,000 euros. Like, it's still very expensive in Spain. I think probably more than in the US. Yeah, like installation is not complicated, like the product itself is expensive.

Easy to have a small payback with batteries in Spain, yet. But it's improving a lot. It's completely changing right now. This year is completely changing.

Herve Billiet (13:45)
Yep.

Okay, so a 5 kilowatt system at a dollar 50 a watt or like you sell around like 7,500, so projects are like just 10, 000 dollars if you add maybe some some other costs in there, or maybe with a battery you are like 15, 000 ish something that range

Jerónimo Lozano (14:07)
Yeah, something like that. In Spain, I talk about prices including the end-to-end of the installation. We include all the permitting, all the management of the aids. If you have to do something in some local administration, we do it. Obviously materials, installation, everything you need to do here in Spain. Yeah, maybe 8,000, 10,000. If you go to batteries, 13,000, 14,000, something like that.

It depends a lot, If it is off read, on read, there are very different types of installations.

Herve Billiet (14:34)
Yep.

All right. right. So what are your competitors? Are your competitors like two guys in the truck, small fellow companies? Are they more like rock national players? Are they like the local electrician that can also do some solar? What's the landscape look like for you?

Jerónimo Lozano (14:54)
I love the landscape in Spain, not because I love it, because I think it's very interesting, okay. More than half of solar installations in Spain are done by SMEs, maybe an electrician who has started its own business three years ago because he knows how to put a solar panel. There's a big market, I want to enter that market and I make money and now, each month I earn lot of money and I'm doing that. And that's like more of half of the market.

Herve Billiet (15:17)
Mm-hmm.

Jerónimo Lozano (15:20)
For me, those like the SMEs, then you got big utility

Herve Billiet (15:22)
.

Jerónimo Lozano (15:24)
companies in Spain, Endesa, Naturgy, very big utilities. For them, I think it is not like a very interesting business. First, because it is like you need a lot of capillarity. It's like installation gives you a lot of cases,

is really granular and there's not that much money as they have in other business. And secondly, because from my point of view, and I know it can equalizes their business of retail. So once people get to our partners, they

Herve Billiet (15:51)
Mm-hmm. Thank

Jerónimo Lozano (15:53)
pay less in retail. There are actually some big companies in Spain that have to stop doing solar installations for residential. They only do B2E, which is like something make you think about. And then you have some kind of

startups like SolarYou and some others, which try to grow very fast, a lot of focus on the customer, a lot of commercial focus, maybe access to money, know how to scale or try to know how to scale companies, try to digitalize everything, use servers, whatever. So you are not a big utility, but you don't want to be

the typical electricitian doing 3 or 4 installations a month. Let's see what happens in the next years because the landscape in is interesting because there are probably, I don't know, 50, 100 companies that completely stopped their activity in the last one year, for example, so it's difficult here in Spain.

Herve Billiet (16:41)
Okay. Okay.

Why is that? Why do you think they stop their activities? Is it like a common reason or?

Jerónimo Lozano (16:57)
Well, first of all, as I mentioned before, big market three years ago, half the market now. That's like a big reason obviously. And then for me, the problem is if you don't maintain your cut below something that makes sense. And in Spain, there were a lot of people wanted to gain market share selling free installations, not making money out of it. They thought those

Herve Billiet (17:03)
Yep.

Yeah.

Jerónimo Lozano (17:18)
installances were going to give you money in the future, but if you don't do it really good, it's a one-off. You lose money and you lose money forever. Then the cases of your installation start, you get some incidences and you have no money in your bank account. So it's very difficult to do it. So, I think it's first of all, very important to maintain cash really low. You have to make money when you sell. If you lose money when you sell, you have a problem,

and this problem has been very common in Spain. And then you need to think about your recurrent additional services after the sale. The post-sale is very important and then you have some things you can do to make more money afterwards. That's what I see has happened in Spain, which is such a difficult topic, obviously.

Herve Billiet (18:03)
Yeah, well you brought up the topic of cost of acquisition tax. So I'd like to ask you, how did you find Sunvoy, like what's the benefit to you?

Jerónimo Lozano (18:14)
Yeah, okay, like to be completely transparent, from the very beginning, we were completely obsessed with doing additional services to our clients after the installation. For me, was kind of, first of all, giving a better service and be different from the rest of our competitors. So it was really important for me from that point of view. But secondly, because you want to have recurrent

earnings, and revenues all the time. You don't want to just do one off. And so we were looking for an app like Sunvoy for a service like Sunvoy, where our clients could interact with us, tell us directly with their app, all their concerns, anything they need. So they can open a ticket, they can talk to us, we can give them advice or whatever. They can also monitorize their app

the installation, which is amazing. Like in real time, you can see what is happening in your rooftop in the Sunvoy app. That's for me is amazing. And also we thought it was a really interesting service because it allowed our clients to fight for referrals easier. For me, one of the most important things in our industry is

to give a good service so that clients are very happy and they refer you to their colleagues, neighbors, family, whatever. And in Sunvoy we found all of these things. You have interactions with SolarYou whenever you want in an easy way. You can see what is happening in your rooftop in real time whenever you want. You have the SolarYou branding and then you can also do referrals and some other things which are coming. So it was like the perfect thing we were looking for.

We couldn't find it and so when I met you and Joe and the company, I was completely in love with the product.

Herve Billiet (19:55)
Cool. Well, the next piece that are coming is like e-signatures and also you mentioned permitting. So a lot of documents still need to be signed and filled out. So the filling out is going to happen automatically with placeholders, means we have access to information from your CRM, from inverters, from design software. So we're gonna pull all of that in. So everything's pre-filled for you and then you can send it automatically to your customers and other people to get it signed.

Control of batteries, what in the US is called a virtual power plant. In Europe, it's called the energy management system of home energy management system where you can turn things on and off based on the signal. Signal from like, it's this time of day, I want to shut the heat pump or the water heater off. Or a signal from utility, like the market, the utility price is negative. It happens more in Europe than in America,

where you have, once you have negative prices and you produce solar with a negative price, you'd like to push that on the grid, you need to pay for it. So, we'll have information from the grid saying like it's a negative price and that we should down your solar for you, that energy management system or home energy management system, HEMS, that's coming next.

Jerónimo Lozano (21:09)
Let me just complete that. For Europe, that's amazing because you have a lot of different places along the day. And, sometimes you want to maybe buy, even if you just have a battery and two panels in your rooftop, maybe you want to buy energy from the grid at 2 p.m. and you want to sell it

at 10pm, and then you can compensate in your electricity bill. And that's amazing and it's something that like physically can be done but we do not have like really good software or systems doing that or at least I don't know them. So that's like a big thing for Europe definitely as long as batteries are penetrating slow but these are we are feeling that they all want batteries so it's going to be bigger and bigger.

Herve Billiet (21:55)
All right. Well, better end the podcast and start working on it. But, just kidding. I have few more questions. For example, I like to keep comparing the US market to the Spanish market. So let's talk about hardware. What are some sort of panel brands that you guys install and maybe some prices of those panels compared to the US? So do you guys have a Q-cell? Is that around in Spain?

Jerónimo Lozano (22:20)
I think it's beginning, but not yet. It's not common, at least. Not very common. In Spain, this year, solar panels, the module, the technology, is the main one is N-type panels, which have over-rising 23% or 22.5% efficiency, which is good. Every year it gets a bit better.

But I don't know how different is that in the US. I guess it's similar.

Herve Billiet (22:44)
Well, I would say we have REC is a big one, Qcells is another one. We have J Solar, we have Jinko. There's a lot of SEG, but then the price I think a large utility scale like big commercial is like pretty low but residential I would say is around 40- 50 cents Sometimes even more 60 cents, but I think that's kind of where the prices are at of our solar panels.

Jerónimo Lozano (23:08)
Yeah, like, I don't know.

Obviously, we have to see the change but I think it's still cheaper here,

Herve Billiet (23:14)
Yeah, I know we have every time I tell people that they are shocked. I think it's like a 20% difference these days. But then by moment is kind of more like parody the same, but roughly speaking, it's about 20% difference now at 16%.

But then, there was huge tariffs. So interestingly enough, I spoke a few years ago when I was still learning Ipsun Solar, I bought QCell panels. This is like 320 watt panels, I think, at the time, or 350 watt panels. And a friend in Belgium bought the exact same panels. And I paid more than double, was a huge difference in price. don't think Qcell makes any more money. Maybe some distributors in QCell, but I think it's mainly tariffs.

I'm not an expert in it, but I do know he's surprised me because he's massive.

Jerónimo Lozano (23:58)
Yeah, yeah, definitely.

Herve Billiet (24:00)
Which batteries do you install?

Jerónimo Lozano (24:02)
It depends, I think Tesla. Everyone knows Tesla in Spain, but batteries for home are not that popular. They are very expensive here. And so, normally, sometimes you put like example, if you install Huawei, which is like the Huawei battery, and it's completely compatible, or however it's called. And maybe if you install other inverters, it depends on the inverter,

but I don't know, they also has their own batteries. There are plenty in Spain, the thing is that they're very expensive and it's getting cheaper and cheaper. And like at the beginning, we were installing maybe 10% of our installations had batteries. Currently, it's probably over 20%. So we have the feeling that this is getting more and more popular in Spain.

And I hope the prices keep going down, so people can have an interest in payback on their investment for batteries.

Herve Billiet (24:56)
So if you want to expand and go beyond the Balearic Islands, Majorca and the Canary Islands, if you want to stay in Spain, it's all Spanish anyways. So your app is in Spanish, everything is Spanish. If you want to enter Puerto Rico, I think it's a hundred percent attachment with no batteries there.

Jerónimo Lozano (25:11)
Yeah, I think that would be how it should be also in Spain in the future. I love batteries, actually.

Herve Billiet (25:19)
How do you see your company grow? What are some places where you invest or you need to work on for the company to grow or grow even faster? What's on your mind?

Jerónimo Lozano (25:27)
Okay, so in terms of places, like in the Spain there's a lot of room for growth, as I said before. There are two big challenges for me. One is maintaining low-cut, and secondly, scale the operations. Scaling the operations, it gets more and more difficult once you get bigger because you have more different problems everywhere.

So that's the difficult part. On the commercial side is pretty, I wouldn't say easy at all, but we really know, we think we know the path, how to grow there. But for me, one of the pillars of growing has to be referrals, for sure. It has to be good service for clients. And so,

If we start giving an amazing, we already do, but you can always improve. If you give an excellent service to your clients, you're going to have free clients coming to you, for sure. And you have to promote that. And once you finish the installations, you need to call your clients and give me the phone number for your family. I don't care. I'm going to give you money, whatever. I'll give you incentives, whatever. To grow, you need to do referrals,

Herve Billiet (26:16)
Yeah.

Jerónimo Lozano (26:38)
in order to maintain a low-cut. To grow you need to do upselling. All those clients which are only installed inverters, maybe next year you can call them and say, hey, I have a battery and it's gonna be, it is worth for you. So you need to do that. And that's on what we are focused right now. For sure, scaling operations is a challenge. And I have my colleague, Edu, working on that.

But on the commercial side, we need to give these additional services that we said before an amazing service. And I think we will be able to maintain low tax.

Herve Billiet (27:17)
All right.

Jerónimo, thank you very much for being part of the podcast. What's the Solar Installers Need to Know. I hope installers around the world learn more about the different markets they are in and maybe some common problems and maybe some common solutions they can implement. So thank you, Jerónimo, Gracias.

Jerónimo Lozano (27:33)
Thank you very much. Talk to you soon. Thank you very much to everyone in the podcast.