Uncovering 4 Thematic Challenges in the Solar Industry

Over the last several months after founding LCOE.ai, my co-founders and I have interviewed perhaps hundreds of experts across the solar and storage industry.

We've spoken with independent power producers (IPPs), private asset owners, financiers (debt), investors (equity), insurance, EPCs, developers, etc. We've spoken to CEOs, CTOs, CFOs, VPs, Directors, and even technicians and analysts—from operations, asset management, design, construction, finance, and beyond.

Over those hundreds of conversations deep diving the challenges and pains they've experienced, we've categorized them into 4 buckets—"themes" as I like to call them.

Let's dive in.

Fragmented and Siloed Data

Perhaps it's my experience as a consultant to Fortune 500 companies and a technologist in startups selling and building products to high tech that I have an appreciation for data. Or, perhaps it's from my past and undergrad at Georgia Tech where the concept of being objective and leveraging data are so important in driving decisions. In any case, no matter where I've gone, fragmentation of data and the siloed nature of systems plague so many industries. Solar is a big one.

This industry has been growing so fast over the last 10-15 years, especially, that I liken this industry to manufacturing—perhaps 15-20 years behind. The data here is incredibly fragmented. The stories and cases I've heard of how technical systems and tools are countless. Most tools and applications in the space that have any traction really found success, in most cases, "accidentally".

Specifically, systems were designed just out of the necessity to do a job (a "function"). However, given the relative newness of the industry (the "solar-coaster"), the tools serving this industry were built based on the requirements of very technical experts. They were software engineers or UX professionals… but, they built a tool that did the Job-to-be-Done ("JTBD") and it worked well enough that they caught fire.

Fast-forward to today, those tools have been around for a while but built on legacy infrastructure, technical UI and UX, and oh, they don't talk to other applications. They work. They work well. But, they do a job for a function, and… well, that's about it.

Though, you might also find some tools saying they do more—or, at least, at the company-level. This may be true if only because many companies are betting on having the suite of tools to rule them all. What you get is a hodgepodge of tools that kinda work, still overly technical, and still don't pass data across the gaps.

Limited Understanding of Project-Level Financials

What? No, that's not possible, Daryl. How can there be limited understanding of project-level financials when this industry is all about financials? With IRR / hurdle rates, large investments, little way to continue expanding revenue once a project is in the ground (or on the roof), isn't it all about financials? Yes. And here's the funny part…

What we've uncovered from executive and financiers is that they may know two things: 1. Power. Everyone speaks in energy—kWh or MWh. It's the default language. However, speaking finance in terms of costs / expenses, IRR, etc., it's much more specific to the finance roles. But go outside this group, and financial terms and true ROI are everywhere and nowhere.

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