Herve Billiet (00:01.074)
Hey everyone, welcome to another episode of What Solar Installers Need to Know. Today, my guest is the general manager of Arch O&M, the dedicated operations and maintenance division of Arch Electric, one of Wisconsin's largest and most respected solar companies, founded in 2003. What makes Michael unusual, his background before running a commercial solar O&M business unit, he spent his career applying Lean Six Sigma and organizational leadership principles to complex field operations.

And now he's bringing that thinking to solar. Michael Schwarz, welcome to the show.

Michael Schwarz (00:34.734)
Thank you, Hervè. It's an honor to be a a part of the show here and I I think we've got a great topic here for us to discuss.

Herve Billiet (00:40.75)
Absolutely. Well, since you're on O&M I think it's gonna be all about O&M So so maybe since we have a lot of residential installers listening, and some CNI, but not everyone has like a dedicated commercial O&M division. So maybe walk us first through what a commercial solar O&M contract actually covers. What what other services that you provide?

Michael Schwarz (01:02.158)
Sure. No, and that's a great question. I think a great starting point. So when we approach a solar OM contract, we're looking at that whole system, that whole array. So there's ancillary benefits or services. When we think about vegetation management, that's a big topic when we're in these larger solar fields that maybe are not on a rooftop and they're out in a solar field. So we partner with subcontractors based upon our geography in the Midwest, understanding

what is required from a vegetation management standpoint. Now that's that's some of the the I think the big impact things that over the course of summer can really make a huge negative impact, right, on the either the aesthetics or the production of of that asset. But overall, commercial-wise, when we're thinking about those larger systems, you know, we're we're really looking at it from a two-phase approach. What are the preventative items that we can take care of to get ahead of those those corrective issues?

in a commercial O&M contract, it's it's pretty standard for us to define up front what what is considered corrective, what is considered preventative maintenance. Just because those two go hand in hand, we always want to prevent that following piece. So when I'm thinking about preventive maintenance on the larger commercial fields, we're thinking about what's the right schedule for those right assets,

depending upon what equipment is on a field, whether that's the modules or the inverters and and what tracking systems they have, or all things we're considering when putting together that preventative maintenance lunch menu, as I would call it. common pieces in that lunch menu, you're gonna have your IV curve traces, you're gonna have your IR scans. We are gonna look at the inverters, what servicing can be done on those? Is there any warranty issues with past experiences at other sites?

You know, that's looking at more the day to day piece of it. How how do we help with that, you know, not being on site is really making sure we have a good monitoring platform set up and that we have a a good solution to notify us in a timely manner when something does go awry, whether that's automatic or whether that's part of our a rock solution.

Herve Billiet (03:14.596)
Okay. It's funny when you said O&M you have two phases that are like, Well, it's usually three phase three phase that big, but anyway. well about the size. You you go What's your smallest and what's your biggest installation you you have on a contract?

Michael Schwarz (03:30.156)
Yeah, so we we will do a lot of the smaller ones. So if you got 100 KW, those are some of the smaller sites. We're really, I think our sweet spot is from one megawatt up to 10 megawatts. Right now, the our largest single site in our portfolio is is 20 megawatts. So though that seems to be kind of that good sweet spot and it's very manageable. And we look at our skill sets and our our practices and SOPs.

Herve Billiet (03:42.034)
Mm-hmm.

Michael Schwarz (03:57.292)
They really adhere to that solar size system and that seems to work very well for us.

Herve Billiet (04:02.482)
Okay. what about thermal imaging and drones flying over to do check things up? You guys use it already?

Michael Schwarz (04:10.892)
Yes, thermal engineering and drones is is part of the standard practice. What's nice about the preventative program is is probably much like other folks, is we do have some options. The right, it's not a one size fits all, it is a lunch menu. But thermal imaging just seems to be a very effective way to see the health of the system where there might be defects or where there's areas that need further review that we can't always see with the naked eye or

Are we going to spend the labor checking each individual piece? Right. That allows us to kind of utilize some efficiency and get ahead of some of those issues or downtime.

Herve Billiet (04:46.29)
Okay. What about trackers specifically? or or or that? Maybe first about trackers, like you do like regular maintenance and greasing and checking things for for for structural issues or or what what it what's the maintenance on that kind of equipment?

Michael Schwarz (05:01.664)
Yeah, so the trackers right now we're kind of handling manufacturer by manufacturer. Not all trackers are created equal. There's there's a number of different topologies out there. But really what we're doing either in the preventive maintenance or through sitewalks is we're looking at the health of it. Any of those moving parts is is going to be an opportunity for a failure. So and we're looking at some of the the hinge points on top of the posts. are those bolts remaining torqued?

Is everything in the same location? Do we see any stress on torque tubes? You know, are some of the common items we're looking for? in addition, I mean, you have a tracker system out in this this field moving and it's out there in Mother Nature. So some days are beautiful days and it's working great. Some days have storms, some days have snow, some days have rain, what have you. now you've got this big integral system that's constantly moving.

So there's always going to be failure points. So we're really reviewing that whole system top to bottom, looking at slew drives, looking at those drive shafts, looking at the weather stations, right? Is there a sensor that we have to make sure is set up appropriately so it doesn't go into stow mode when the vegetation management gets too high? So really we're we're looking through that whole system from front to back, and we do have a customized checklist for each manufacturer because we tried the one size fits all, but it it doesn't always it's a good guideline, but doesn't always work that way.

Herve Billiet (06:31.12)
No, and the checklist on the commercial that we did, we looked at, I mean I w those checklists become pretty long. my My experience with some developers are some of them are like very, very picky and other developers are a bit less picky. I assume your clients are developers or or are they like asset owners or who's a typical client that you work?

Michael Schwarz (06:37.911)
Mm-hmm.

Michael Schwarz (06:53.378)
It's a little bit of both. So we have some owners and we hit typically have probably more of the the asset managers. and really, I think from requirement standpoint, we look at our customer base, it is all over the board. what we've tried to do is create a standard list out of that that really is all encompassing from cradle to grave, looking at all the details. And I think what the our team has learned along that journey is, you know, really having it broke down,

piece by piece on those trackers, whether we're looking at the knuckles, the drive shafts, the slew drives, what have you. But that granularity has been able to give us a a very good operating procedure when going on those sites just to make sure that we're we're connecting all the dots. Because what we don't want to do is do multiple visits. We'd love to go there in one visit get that done and and optimize that travel time.

Herve Billiet (07:42.18)
Yeah, absolutely. So let's speak about Lean Six Sigma. I think you you spend your career applying lean and operational excellence to manufacturing and industrial environments. And so what made you bring that toolkit to the the solar O&M business?

Michael Schwarz (07:57.666)
Well, I I think what's very interesting about it is right, Lean as a whole is all about value mapping, right? What value does a service or product bring to what market? and And what's the best way to create flow to make it happen? So when I think about the solar market, it it seems like it's little bit newer market, maybe than your traditional industrial manufacturing. In industrial manufacturing, everything kind of maybe seems straightforward.

Herve Billiet (08:22.289)
No yep.

Michael Schwarz (08:27.479)
What I've seen in in Solar O&M is we have some best practices, we have some strategies, but do we have the whole value stream mapped out? And where are the gaps in that value stream? So what Lean Six Sigma has really been able to, you know, teach me is what's the value stream process? Now applying that really that same toolbox in Solar O&M is overall it's it's a it's a very similar process. You have a a product product life start, product life end.

And then you've got the product life in there. And from a service perspective, you're ultimately applying. How do I apply the best service on this piece of equipment that, you know, is gonna have scheduled downtime and unscheduled downtime? And what are the gaps or or sale service failures for us to get there?

Herve Billiet (09:14.098)
So so maybe let's dig a bit more more deeper, maybe a concrete example, like how do you apply Lean Six Sigma principles to a team of solid technicians? And then they're also traveling seventy five percent of the time. So how do you apply when when you came in, did you do the value mapping and do you remember some some some special moments? Yeah.

Michael Schwarz (09:32.237)
Statistics. Yeah. So I think one of the fun pieces is you look at other service industries, maybe as a benchmark. So as I came aboard trying to understand, you know, what what does HVEC companies do? What what do car, you know, service shops do? And high level, there might be a similar process there or similar framework. really coming to the solar world and look looking at that that process map and saying, okay, what's what's time that we're working and non working?

Looking at where the geography is, and very quickly in that value stream, you could see that there's a large geography area. And what's different about, like, say the automobile industry is the car comes to the service shop, right? In this case, we got to take our service shop to the car. So even through our practices last year, as we put this value stream together, it was very, very evident very quickly that we're spending a ton of time behind a steering wheel instead of behind a computer or behind a wrench or i in that that field. So

Herve Billiet (10:16.786)
Mm-hmm.

Michael Schwarz (10:31.201)
Very quickly, you know, what came out of our value stream was a KPI around percentage of travel time versus work time. And and now that we are monitoring it, we're aware of it, and we continue to improve that just because I wouldn't want to pay someone to be driving on a vehicle if I own my own solar farm.

Herve Billiet (10:49.212)
So what are some solutions? You have teams kind of more spread out depending on where you have larger contracts or you give them faster cars. Like what are some some some options for you?

Michael Schwarz (10:58.573)
So really what that strategy boiled down to us is trying to do more talent set by geography. So we look at where we're attacking new sales, we're trying to stay within our same parameters, the same field from a geography standpoint and grow our density. That also was layered in with our training program. So we have our own internal Arch Academy for tech level one through four. what we try to do is make sure there's a good blend of that support.

Herve Billiet (11:08.028)
Uh-huh.

Michael Schwarz (11:28.083)
Of technicians one through four within a g given geography, just to give us that flexibility so that if we need to plan maybe more strategic milk runs where we're leaving on Monday and coming back on Friday, that that's the only way for us to optimize that travel time. The unfortunate piece is our technicians spend more time away from home, right? So we haven't quite got there yet. But as we build our density based upon that KPI, the expectation is we can start to reduce that travel time versus work time.

Herve Billiet (11:57.306)
All right. Well let's speak about KPI. So so clearly one one travel time is a a KPI, you you're tracking do you track something else in in the commercial O&M Division?

Michael Schwarz (12:07.52)
Yeah, and we track a ton. we've got a ton of internal KPIs. I think that the biggest, most meaningful one at the end of the day is going to come down to a dollars per watt for those systems. We're tracking a lot of uptime and downtime. Those are important pieces and lost production. That falls maybe more on the reactive side, you know. So the reactive side, your uptime and your downtime, your percentage, I think is one of the higher, more valuable KPIs on the preventative side.

Just looking at that cost per watt, right? What does it take for us to go out there to do a preventive maintenance? Cause if we're doing it right and we're hitting that target and weather's fair to us, right, we should prevent or reduce those reactive maintenance pieces. So the the one I've always continued to resonate with was a a dollar per watt metric.

Herve Billiet (12:57.434)
All right. and We also added in in the in your Sunvoy portal we added a lost energy production last month and lifetime. So you you have that too. You can use that as an extra KPI.

Michael Schwarz (13:10.752)
Mm-hmm.

Herve Billiet (13:12.108)
And then we also you you want to have weather adjusted data. So we also have that now to to check the the estimate production, right? That comes from your contract or your your your design tool, and then the weather adjusted data is like that estimated with the weather factor. And so you see if you underproducing, if you produce less than it than than than designed, maybe just because of the weather. So that takes that that variable out of it too.

I think a lot of a lot of people listening are interested in the O&M part because it's a recurring revenue stream. What do they not understand about what it actually takes to do it well?

Michael Schwarz (13:53.867)
Yeah, it is a recurring revenue stream. Finding the happy balance between preventative and corrective, right, is that magical crystal ball solution. So the preventative piece, if we can get out there and proactively have a schedule, great. Right. We talked about travel time, we talked about uptime, all those things are very controllable. It's having a schedule put together of preventive maintenance, and then your reactive maintenance creeps in.

So really what what that comes down to is you have to have a a a process developed system, but there has to be an off-ramp for agility. you know, Even the best maintained systems, weather happens, mother nature happens. And what we're trying to focus on from a service perspective is how do we make sure we keep that uptime? So it seems, you know, seems easy at 10,000 feet. I think once you start flying lower into the weeds.

What you run into is those day to day complexities of here's the here's the block of work we have that's scheduled, here's the unscheduled work, here's where our technicians are, what's the greatest priority? And that that's what creates our our day to day opportunities as I can call them.

Herve Billiet (15:03.858)
Opportunities or headaches, depending on how you're looking.

Michael Schwarz (15:06.636)
Yeah.

Herve Billiet (15:11.014)
Well we we haven't spoken much about the the sales part of of of maintenance, right? So you have corrective and preventative, but how do you make the case to a commercial solar owner that preventive maintenance is worth paying for? If there are large assets owners that that makes it easier because they've done this before. But do you sometimes have people that just don't understand and don't want to pay for it? How how do you handle that?

Michael Schwarz (15:35.308)
Yeah, absolutely. And and really I think at a high level, the biggest piece that we're looking at is at the end of the day, a solar farm is an asset, right? It costs a X amount of dollars. there is not a lot of moving parts, right? In trackers, you're gonna have moving parts and ultimately when things move, things are gonna wear. aside from that, th there's still other there are other electronic pieces that are heating up and cooling down and heating up and cooling down more on the micro level.

But ultimately, at the end of the day, that's an asset that's producing value, right? Through generating electricity. and when we can preventatively get to a field, that uptime is going to be that big measurement for us that makes sure that that asset is producing where it should. and then on the flip side, with the reactive maintenance is the unfortunate cost of that is that cost of downtime. Something goes down, even if we can dispatch quickly, just because we get somebody there.

in a timely manner doesn't mean that we're gonna be able to fix it. An inverter might have some blown IGBTs or what have you, and we'll have to go through an RMA process. so unfortunately, what that means for the customer is that is now sitting until we can execute the RMA process with the manufacturer, get that back on site. We require another site visit. in the meantime, especially in a time like now where we're we're getting into June.

this is production time. You're hitting the longest days of the year. They're only getting longer for you know a period here. so the I think the biggest piece is just you're looking at that cash flow and what that ROI looks like. And and it does cost money, but when we look at the downtime, that can cost more money.

Herve Billiet (17:17.362)
Absolutely. Now th those technicians are on the road quite a bit. I think up to up to seventy-five percent of of travel time. How how do you hire for for people like that? Because they need to have it all, right? The the technical backgrounds and yet being able to to to travel that much, how do you do that?

Michael Schwarz (17:37.032)
Mm-hmm. No, and then that is that's very tough. So at least at Arch, the approach we've taken is building out a program, Arch Academy, to help train people with the technical skills. And you know, really what we're looking for is someone who enjoys the travel piece, maybe doesn't have the technical. That's okay. We have a support system and we've got Arch Academy to train you and teach you. really just trying to find the other piece of the behavioral part of who

enjoys that travel in their lifestyle. And if you leave on a Monday and come back on a Friday, you know, we're always striving to have people home on the weekends. solar farms do go down on the weekends, so that doesn't always work out, but it's it's a goal to strive towards. So it it's been a very challenging journey and and continues to be because it takes a unique kind of talent set for someone to learn the technical skills but have the ability in their schedule to travel and have the right lifestyle for that. So

don't have a magic bullet for it, but what our approach is is focusing on how do we train people the tech the technical part and allow others to bring you know, their lifestyles to Arch.

Herve Billiet (18:45.242)
in y So you train the technical part... do you also train like the lean six sigma methodology?

Michael Schwarz (18:51.695)
We don't really get into that. We do some value stream activities, but we haven't gotten that far down the road yet. Now, just 'cause we don't do it now doesn't mean that's not the future of us. Because you know, Lean Six Sigma teaches a lot of values and process and and I honestly, you know, what I've I've learned through my career and through my training is that that right process is gonna give you that right result for your customer.

Herve Billiet (19:13.712)
I I think so much in business is around processes. And when I when I grew up in in in Belgium, went to to college there and university, then did some some work in some engineering companies, so much was about ISO norms. I ISO norms and it It's super common in in in in Europe. I haven't seen it much in in America, maybe just because I'm not connected to it, but it seems that that is like the

That's the way to go. I think you you're familiar with ISO terminology too, right?

Michael Schwarz (19:48.246)
Yes, yep. So my my previous background is coming from manufacturing. So ISO has has been a part of what I've grown up through and and love to learn. and it's funny because I think depending upon who you're talking to, and you bring up the words ISO, you know, some people get those cold sweats and they cringe. and I think it happens that way because ISO forces you down a shell and kind of in a process. Now it's painful to get in there.

But what's nice is as people move around and you cross-train or other people learn different positions of the company, if you have a solid process to come back to, then the people part isn't as big of a factor, right? At the end of the day, we want to make sure that everyone's solar farm is producing. And if we don't have a process that when one person takes off that somebody else can't slide in there and it falls apart, that's not the best service. So

What's hard is is developing that process and sticking to it. Right. Then you get in the fun fun piece of teen dynamics and holding each other accountable and hey, there's a process for that, but we didn't follow it. Why? Right. but what I've learned is it really helps steer the ship in the right direction.

Herve Billiet (20:51.418)
Mm-hmm.

Herve Billiet (20:56.124)
But you you mentioned for example holidays. Like I I remember we came up with like a buddy buddy holiday sheet. So if you want to go on holiday, totally fine. Just make sure you find a buddy that that is not on holiday at the same time as you and can take over your roles and responsibilities. And so we kind of push it to employees to find their own kind of counterparts. Management doesn't have to do everything there. But but it was kinda like why do we had to come up with like that idea? We call it like the buddy list. And so

I I think the solar industry would be better served if if we all had just norms to follow because when you train to follow certain norms or at least you know the norms, you can also switch companies and you can hire there's more transparency and more it's more replicable. So I think yeah, the the big question maybe we don't have the answer, but like why isn't there like ISO certification for solar companies?

Michael Schwarz (21:51.894)
Yeah, no, that that is a great question. And maybe from a market perspective, maybe it's too new, maybe we're just not there yet. and you know, in the background, you could probably really use the framework of ISO to implement that, I think, into a solar company. it's a great question. It's a great thought. you know, we're not there yet. Maybe that's part of the journey we're on to next.

Herve Billiet (22:14.885)
Yeah, maybe question for the audience, right? Like send us your message, let us know why. or we which reach It's impossible that we're the first one to think about this. So why is isn't it like a certification for small company to be so certified? All right, next question about your tech stack. So so what is kind of some monitoring tools that that you use, maybe high level or like very detailed nitty-gritty detail level, but tell us like how do you monitor all your different assets?

Michael Schwarz (22:25.003)
Yeah.

Michael Schwarz (22:44.395)
Yeah, so right now we really have our monitoring combined in the in the Sunvoy portal. So with with the sites that we have on contract, what has actually been working out very well is all of the the different brands we have on one dashboard. So we can pull up a map and we can look at our customers every day and see, okay, who's green, yellow, and red. Now that at least high-level monitoring is gonna allow us to prioritize. So we're looking at this giant list.

We're going to be able to look at those reds first and dive into that on a daily basis. We've we have a person dedicated to reviewing those on a daily daily cadence. So the red, yellow, green, perfect way for us to prioritize. what's nice about that is you may not get the exact details, but that's gonna take you out to that manufacturer's portal and we can log in and and keep that troubleshooting process. But you know, from a flight standpoint, we're we take off from the runway, we know what runway we're going to, and once we get there, we're gonna see the details.

of what we need to dive into next. and that's really been very helpful for us because as we go down our growth path, what we don't want is 20 different portals to log into to try to figure out where the priority is and two hours into it, maybe we've got an idea versus, you know, in two minutes we can be there.

Herve Billiet (24:01.651)
No, I was kinda like a plug for Sunvoy right there. But maybe I expected you to say like, well, we also use other tools, but it's I mean the goal of Sunvoy is really to have everything in one one dashboard. So thanks for that. Maybe a last question about what's the single most important thing a sole installer needs to get right before trying to get build a commercial O&M division? Like I'm no I know the the the the recurrent revenue sounds amazing. The the they They may sell it, but then

Michael Schwarz (24:10.813)
Uh-huh.

Herve Billiet (24:30.215)
What do you need to do right before even thinking about doing it?

Michael Schwarz (24:34.686)
Yeah, I I think you have to get the the fundamental pieces, you know, put together first to build a foundation to jump off of. Right. We've got like if you're gonna play football, you've gotta figure out how to block and tackle, right? If you can't block and tackle, how are you gonna run offense and defense? same kind of thing here. I think having high level understanding of rules and responsibilities, who does what, kind of in that value stream. When you think about once you set your first foot on a

Solar Farm, what did it take to get there? What does it take to finish that job? And what does it take to get off that site? and I think what we've learned along the journey of if it's not the process piece, which I think we've discussed quite a bit, it's also making sure you've got the right tool to facilitate that process. we have a piece of software to help us where we put our dispatch, our scheduling in. That scheduling also allows us to put customer details in with property details.

And then build out those assets. We've built that foundation that is allowing us to collect the good data. So data that we can see common inverter failures maybe at sites or a common inverter across multiple sites. So we have that foundational piece to have data to make decisions. so that's what I'd refer to as almost that blocking and tackling.

Herve Billiet (25:55.507)
Alright. And I suddenly realized that maybe our first question should have been about safety, right? How is safety first? Although I think the the the rule of safety first it's just mentioned because when people got cost, usually they got safety first. But all joking aside. should we add something about safety on in the O&M field?

Michael Schwarz (26:19.252)
Yeah, how we our approach with safety is really safety is just part of the culture. Safety isn't a like a this afternoon thing or a tomorrow thing. It's a all the time thing. What we've tried to do to help promote that environment is every Tuesday, our team we do toolbox talks where really we're just sharing best practice, whether whether we're looking at how to read the appropriate calorie amount on a sticker, or if there's a seasonality thing coming up. We

Just talked about heat stroke awareness, right? As it's getting warmer here in the Midwest, that becomes a more and more popular thing. The hard part is is you go through these different cycles, whether it's weather, whether it's tools, whether it's different sites, on the O&M world, we can never take enough time to be ahead of it because you look at our technicians as they're they're jack of all trades. And we're looking at all sorts of different manufacturers and different sites every day. So

safety can be very redundant by us, but every Tuesday we're talking about some type of topic, whether that's something with s teammates on the field or it's something we have on our rolling calendar to get ahead of.

Herve Billiet (27:30.055)
Good. Well, thank you, Michael, for sharing your knowledge and experience in the solar industry. Thank you.

Michael Schwarz (27:34.836)
Thank you.