130 - The Path towards Localizing the Energy Transition

Clean energies used to be a novelty a mere 2 decades ago. Now they’re a highly essential part of the bottom-line, enabling industries and corporates to manage their demand economically. Join us, as we discuss this and more on localizing energy supply chains, manufacturing, jobs and economics in a candid chat with Russ Bates, Founder and CEO of NXTGEN Clean Energy Solutions, a consulting one-stop-shop firm acting as a single touch point for small and large business owners who want to take advantage of renewable energies. 

Host:  Chris Sass 

Additional Reads:

NXTGEN: https://www.nxtgencleanenergy.com/

Securing Clean Energy Supply Chains: https://www.iea.org/reports/securing-clean-energy-technology-supply-chains

Transcript

 04:27.73 

chrissass 

Welcome to insider's guide to energy I'm your host chris sass and today with me is Russ Bates Ceo of NXTGEN Clean Energy Solutions, Russ welcome to the program. It is a pleasure to have you on the show. 

04:39.00 

Russ Bates 

Hey thanks for having me Chris great to be here. 

04:45.99 

chrissass 

As we start every show I have an unfair advantage over the audience. At this point is I have some idea of who you are from both the pre-show and the background we have. Why did you start by giving the audience a little professional ah background of who you are and why you're on the show. 

04:59.46 

Russ Bates 

Yeah, certainly so ah, Russ Bates of nxtgen clean energy solutions. Basically my background is power generation and primarily Fossil Fuels so coal, natural gas and that was all before I transitioned into Clean energy. So now we've got nxtgen clean energy solutions which provides consultation work project development and owners representation services for clean energy projects with several different clients. 

05:29.86 

Russ Bates 

Big, small, large corporations, municipalities any and all so what we're able to do is be a onestop shop, single point of contact concept to completion solution for these organizations to transition into clean energy. 

05:47.48 

chrissass 

Now I've been living in Europe for a few years and coming back to the us in a few weeks. Um, you described a career journey where you were in more conventional energy production and you've moved to renewables. Um, what about the market? when I meet many americans, not everyone super excited about the journey to renewables. Um, how are you finding that. 

06:08.56 

Russ Bates 

Well, it's really has ah been a transition that started a long time ago and I'm talking about the industry in general and continues to this day so years ago twenty years ago you wouldn't have seen me as a fan of renewables of solar or wind because it just didn't seem as viable to me then. And as time went on and the ah the economic advancements making it more economical and of course the technological advancements now it it does make a lot of sense so that's where you see more people jump on board and of course the sustainability and the climate issues are part of it. But we look at it from an economic standpoint quite a bit. 

06:44.89 

chrissass 

And so when you say you're a fan. What does that mean the economics had to do to to catch your attention how did they need to evolve over the past twenty years to make it that a business owner today or a utility today would be talking with you to help help plan for the renewable transition. 

07:02.53 

Russ Bates 

That's a really good question used to be more of a novelty. Um it did make economic sense to have solar panels on your house or business. It was more of a statement if you will now that's not the case whenever we're talking to. The clients. Um the bottom-line matters and that's something we take very seriously. So um, you know the advancements in the tech. Ah the ah production of these um, clean energy technologies has made a huge difference and people are seeing that. And making that change not necessarily for the environment. That's a big part of it. Don't get me wrong but more so I would say ah they're looking at the dollars they can save. 

07:48.40 

chrissass 

So when when you're saying it like that those and people are people mid-size companies who who who are the target that that's looking to save money that you're you're looking to work with ah what kind of customers. 

07:59.70 

Russ Bates 

Really yeah, really any and everybody um you've got your big corporations that are publicly traded and of course um their shareholder influence on on making that that change. But again, they're seeing the the economic rewards of that. So. It's helping the shareholders. Um, you've also got in the supply chain that's being driven whether it's by the se by shareholders or whatever for those those organizations to also make that transition so a lot of mode is it really comes back down to to the bottom line and and what savings are they going to be able to have. Especially with the I'll say really volatile market conditions of ah the utility market I know here in Northeast Ohio um, it's going to be quite a sticker shock when people get their bills in July because of the the incredible rate increase ah purchase of electricity on the open market. Um, that they had a yeah oh an auction back in October it went from like fifty something dollars a megawatt hour to around 120 so I'm not saying everybody's bill's going to double. But that's goingnna go up considerably and that's going to make ah a big difference on the on the impact. 

09:09.74 

chrissass 

But the individual rate payer that that's regulated right is that so the the bay the rates can't just go up right? So how does that work. How does it trickle down to me somewhere in Ohio getting my energy bill. 

09:23.83 

Russ Bates 

Well like Ohio's an unregulated state. So it's it's a little bit different but you have options as far as where you can purchase your electricity but it's really what's what's the supply and demand um the demand continues to go up every single day. There's there's a lot more cell phones. Electric vehicles things like that which drives the demand up of the supply especially on the utility slot side. It's it's really going down. We're seeing a lot of these coal plants that are no longer going to be in service after a certain amount of time. Um I know too that I spent a lot of time on whenever I lived in Southern Indiana ah they're almost down to nothing they're down to I think 2 units out of 6 before. So yeah, the supply and demand is a big part of it as well. Which leaks. 

10:09.60 

chrissass 

Now other renewable are they renewable? Um, like are there Pv Parks or wind parks going up in the same regions that are trying to offset that that um coal generation going offline. 

10:20.88 

Russ Bates 

It depends. Um, Ohio there's some but Ohio's not a really ah a renewable, friendly state. They're not big fans of clean energy. Although a lot of developers want to do stuff in in Ohio other states Texas they've embraced it. Um, they're done a lot there Arizona Florida California ah, but even Illinois in the midwest there's great opportunity new hampshire and in the new England States Michigan there's there's a lot of them going in. Yeah. 

10:48.98 

chrissass 

And then the problem Statement. You just described so should individuals and companies be worried about continuity of their electric so electricity or is it just a cost concern What is is that you know we have intermittent renewable So and then if you're having base loads systems may be going down. Is there concern already or should there be concern of continuity of service. 

11:12.74 

Russ Bates 

I think that's definitely if you're just tied to the grid. That's that's a concern with brownouts blackouts and things like that that are becoming more prevalent with renewables. Yeah, they are intermittent so you have to either have that storage component in place. Which can make sense or maybe it doesn't it's it's all depends on each individual. ah ah situation um but you've also got ah oh I'm I'm going to say the the grid upgrades that that are a problem. The grid modernization is is not really in place. So that means it's tougher for these renewables to get online to provide that additional power. But even with ah you know, clean energy say you put a solar array. Um on your roof at your manufacturing facility or at your house. You're still going to be tied into the grid more than likely you're not going to be in Highland. So you still got that energy that you can use from the grid. 

12:04.20 

chrissass 

Now you in your intro. You said that you advise or help customers. So so what are you helping them with in this situation. So what's the problem statement. They're bringing to you and what? what's the solution right? So you said your're proponent of renewables because they're cost effective is what I heard you say. Um, you mentioned that you know there's going to be a number of people at least in Ohio surprised by the cost of energy because of some spikes that took place for the rate per megabot hour. So so what is it? they're coming to you for what are they looking to solve. 

12:35.93 

Russ Bates 

Um, it could be a combination of things. It could be 1 thing we work with some large global corporations and they have sustainability initiatives they want to accomplish. Um, so they'll put together a plan of ah, let's say goals they want to have a. Ghg the the greenhouse gas emission reduction by 2030 or 2035 or whatever their their particular goals are but they don't know exactly how to get there. What's that mean? Okay, we need to do something what is that and they're really looking at it from probably around a fifty Thousand foot view. Where we can get ground level and actually detail the plan and put together the pricing bring everything together. We don't do installation work. That's not what we're about, but we do put things out for competitive bids. So we'll work with ah incredible. Number of partners our engineering procurement construction partners to do that work so we'll put it out for competitive bid. Get the best fit form and then be that owners rep and project manage for that that client. So it's really turnkey. They can turn to us and say here's what we we need. Okay, here's. Here's some options here's some different solutions and we'll handle it. They can be as involved as they want to be but they really don't have to be we can send them reports. We can take them on ah on a job site walks things like that. It's really whatever they're they're interested in. 

13:56.35 

chrissass 

And so for a project like that. Are you building the performer outer are they already perform it out that they know that they want to go to renewables before they come To. You is that the problem statement or is it is they want more predictable energy costs into the Future. So It's better for their bottom Line. What's what's driving them to come talk to you. Besides the Esg angle. 

14:16.28 

Russ Bates 

Ah, it's It's the bottom line is a ah big big component of it so they they have an idea they don't know all right is this going to be cost effective or is it not and it really varies in whatever region the country that you're in what are the rates. What's the the anticipated escalation. Um, what type of system is going to go in is it is it a solar is it a microwind turbine system is it a combination of both and what do those financials look like so we'll put together a preliminary design and what we call a budgetary financial proposal to give them an idea here's here's what it it's probably going to look like. And run through that with them if they like that then we move on to the next step which ah is a limited notice to proceed. That's where we go out for the competitive bids and get the firm numbers based on that. 

15:01.92 

chrissass 

Um, and does this plan work with assets if if a company's in rental space or industrial space. They don't own How how do you handle a situation like that. So you're making ah a bet on renewables with long term Asset. You're putting in to generate. How does something like that. Will play out. 

15:23.17 

Russ Bates 

That's another really good question because a lot of people do lease warehouse space or their manufacturing facility or or office space or whatever and what we've found is that we can work with our um with their owner the owner of the property. And show them hey you might want to invest in this instead of your tenant purchasing electricity from the utility. Why not just purchase it from you and by the way here's your the incentives that come with that here's the the projected income that you'll get from that really a turnkey type of thing. So. It solves a few problems gives another revenue stream to the the property owner that more than likely they weren't even aware of so it can work like that. We've worked other deals where um, the the tenant will go ahead and put that system in they'll own it maintain it and all that kind of stuff. And then the property owner works something out with him in that regard. So there's There's a lot of different ways to put it together. 

16:20.58 

chrissass 

Have you seen a reit or someone I mean a lot of the industrial properties. There's a couple larger reits that own the properties. You know a lot of places in North America are they embracing this technology and have you already seen them buy into this at scale. 

16:35.95 

Russ Bates 

We're starting to um, it's it's that goes back to that transition piece of whenever you're a property owner you're not thinking about being a an electricity provider right? You're thinking about the actual real estate and people are starting to to open their eyes and say hey here's. Again, another revenue stream people are investing in this for a lot of reasons. Why don't I do that how come I don't go ahead and have that that additional revenue stream in place. Plus it's it's more attractive to the ah tenants prospective tenants that have these esg goals that want to pay a little bit less for their electricity. And know what that electricity is going to cost them over a you know, extended period of time as opposed to maybe month to month. 

17:17.64 

chrissass 

So in in most cases in my experience in the business world. There's there's kind of some low hanging fruit right? So so in this case, are there certain industries that are energy intense or that make more sense to rapidly go absorb this kind of technology today. Perhaps others. So you know if you had a salesforce at Nextgen and you were trying to reach out to prospective customers. What's the ideal customer or the ideal company that would get the most return on on on this kind of infrastructure being in place. 

17:50.72 

Russ Bates 

I I would say manufacturing that uses a lot of electricity for for their process and on top of that I would say a facility that has a nice large um in great Condition. Ah roof. So a roof mount system and I'm I'm talking solar at this point because it's the most popular but a roof Mount is the most economical for the most part just you know and speaking in rule of thumb type of terminology. But if you're using ah a ton of electricity at your manufacturing facility or any facility. Ah, for that Matter. You're probably a pretty good candidate to at least get a yeah, a free console and see what that might turn into. 

18:31.23 

chrissass 

Now you you talked about the panels of the Pv connections up top. Are you putting storage in as most of these at this point do you have battery or some sort of storage component to most of these installations that you're doing. 

18:43.33 

Russ Bates 

Yes, we offer solar microwind Turbine battery storage ev charging so solar lighting smart poles which is is part of that parking lot or roadway lighting as well. That does a lot of stuff. But. Ah, regarding storage. You really aren't seeing a lot of that it needs to pencil out it needs to make sense so with net metering right now that makes a lot of sense as the battery technology improves and the cost goes down. Ah you're gonna see more and more of it. Um. But we we really don't recommend a ton of battery storage unless the situation is is right. 

19:21.15 

chrissass 

So then you're relying on the the utility to be your backup if you're if you're not Patrian right? So so when the sun is shining. You're you're getting plenty of energy. 

19:27.30 

Russ Bates 

Yeah. 

19:34.72 

chrissass 

When there's an event that keeps the sun from shining or nighttime you're you're relying on the grid is that okay. 

19:40.21 

Russ Bates 

Yeah, yeah, that's been the most economical approach thus far for most of our clients. Um battery store certainly plays a role and as we see the the pricing continue to improve but we'll we'll probably recommend that a lot more. It just depends on what your price per Kilowatt hour is you know if you're if you're have a low Kilowatt hour cost and battery storage probably isn't going to pencil out as much but like Northeast Ohio as I mentioned before battery storage is probably going to be ah, something people really want to consider um and we're saying this in in the thought of ah blackouts brown outs. 

20:18.63 

Russ Bates 

Depends on if you get that we don't experience a lot here in Ohio. But if you go to other places parts of the country which were a national ah company. You'll see more and more of that where peace of mind and and lost production. Um, that battery storage can prevent. Really does make it a big difference. 

20:35.55 

chrissass 

How far away are we from seeing industrial sites not having big diesel generators outside as their backup. Do you see that as a reality. Do You think these electrical systems are at the point now where you could. Use Battery use solar maybe combination of wind and get rid of having that huge diesel generators sitting you know sitting outside the door there or do you see folks still having that as well as this technology. 

21:03.33 

Russ Bates 

I Don't see it going away tomorrow. Um I Always tell everybody This is a transition and even if you could snap your fingers and get rid of all the coal plants and and you know natural gas combined cycle Power Gensations. We shouldn't do that that would that would cause a lot more problems. It needs to be a plan type of transition which I I think we kind of got that plan I wouldn't say it's all written down just depends on who you talk to. But yeah I to answer your question I think you're still gonna see that for the foreseeable future. But I believe it will eventually go away as part of ah this overall transition. Yes. 

21:39.41 

chrissass 

And then like Rex or certificates how big of role. Do they play to your customers so they are they taking the recs directly on or is the provider taking the Rex where where are those going and how important is that to this penciling out. 

21:55.79 

Russ Bates 

It It varies I mean rexa those are commodities right? So It's supply and demand and what's out there. Um, it just varies from client to client. So We'll recommend those at times. Usually it's a temporary solution until we get you know more power generation as far as clean energy. At their facility or or what have you but it is part of it I think it's an important part of of what's going On. Um I Don't think it's the silver bullet that some people may want it to be as as much as that would be great. 

22:27.88 

chrissass 

And is is the greatest savings producing the energy or is it the ability to peak shave um with these kind of installations. 

22:36.30 

Russ Bates 

I would say can it probably depends on the on the client where they're at but either 1 is ah is a great thing. Um I would say in most of the clients that we've talked to It's not been so much. The the pee shaving. It's been more of the the bottom line reduction. Of a utility cost but p shaving certainly is is important you want to consider that as well. 

22:58.89 

chrissass 

And then the the baseload of the Utility energy. Are you monitoring how green that is and are your customers pressuring the utility to be delivering green energy or some percentage of green energy. Um and moving away from coal plants or gas turbines or something of that nature is there pressure. On the Utility market from your users. 

23:17.00 

Russ Bates 

And there is but remember the the utilities is a monopoly so they really don't have to to listen. Um, it's I would like to say that they want to make this transition. But I've really not seen a whole lot of it. There's some that. Are pretty active but I would say in general ah utility industry has has kind of balked and and slow walked and and can kicked a bit as far as this this transition. 

23:47.58 

chrissass 

And and along those lines I have heard feedback from folks that getting permitting and putting this in and working with your utility individually can be quite burdensome to get the utility to accept these kind of installations. So What's your experience there maybe and it's probably relevant to the region or state that you may be in but what kind of pushback are you getting from the utilities when you want to do all this work to help the customers. 

24:14.69 

Russ Bates 

Um, I'd say burdensome as being very kind when you think about it from the utility point of view. Which yeah I always try to see both points of view and understand. But as soon as they hook up that that clean energy generation system. They're losing money. Right? They're they're not going to get anything for that. So the longer they can hold off from connecting that system. Ah the better as far as them and their shareholders. Um, whenever I look at it. It's very frustrating honestly because. Um, they do have to to do their due diligence and make sure that their equipment will be able to handle whatever is put back on the grid when you're talking about transformers and things like that. So. That's always their their fallback but you know you may put in in the design a two Megawatt system and and they'll come back and say no, you can only put in. Ah, seven hundred fifty Kw system um the all right is that real is it not who knows it's it's definitely a monopolistic type of of environment which really I think has to have some some incredible I hate to say the word regulation. But it needs. Ah it definitely needs something somebody needs to be watching and and paying attention to what's going on there. 

25:31.77 

chrissass 

But isn't there an opportunity to actually help with the utility. So For example, if I suddenly want to have fleet charging it my my warehouse facility and the substation can't handle that there's a bunch of infrastructure that the utility would need to put in place. Ah, whereas if you put a micro-grid there. You may be able to help me out deliver this much quicker than Utility. So are there times when when they see the value of someone like you or someone like your customers putting infrastructure in place. They don't have to go build right now I mean because I don't know they could build all the substations that they. 

25:49.79 

Russ Bates 

So. 

26:05.78 

chrissass 

May need if if everything electrifies. 

26:08.42 

Russ Bates 

Your hundred percent right Chris and and you would think they would the the real world that we've been living in right now they they honestly have not um, we if I was utility because I've worked in the utilities as far as coal plants natural gas all of these There's a tremendous amount of cost that goes with that. Not just the initial build but the the operation the maintenance and things if I was a utility and and being able to take advantage of someone else developing these clean energy projects and doing the the operation and maintenance and I just buy that energy and get a good deal on it and I just mean. Ta transmission distribution lines sounds like a pretty good business model to me. Um, but they have not embraced that I'm not saying every everybody. Every utility is not embraced. It. But for the most part they have not this is a common conversation with a lot of my colleagues of why aren't they why aren't they jumping in this. It makes so much sense. Ah, they're they're just not at this point and they may say baseload power. They may say this or that and yes, yes, yeah. 

27:03.52 

chrissass 

And that's across across North American footprint you you work across all the Us right? You're in every state you you feel? That's pretty content and then okay so I get that now are your. Customers generally I'm not trying to play 20 questions. You're just trying to figure out that the piece are your customers selling their surplus energy back to get their cost down. Are they using all that they generate in that the the grid is just additional capacity. Yeah. 

27:34.57 

Russ Bates 

Yeah, mostly it's net metering so any excess is generated. Will go back on the grid and they'll get that credit. Um, it depends on the system size sometimes ah a system they'll they'll use 100% of what's generated because it's just that certain size and they have that much. Ah, consumption that they need so again, it really depends on on the client. But for the most part it's it's net metering that goes back and then they they bank those Kilowatt hours 

28:02.37 

chrissass 

And is this software in place to make that easy for customers today to do that I mean I've heard a lot of business plans. A lot of folks doing these kind of management for enterprises. Um, how easy is it for you know if if I'm in. Manufacturing business I don't want to be in the energy business because that's not my core competence. So how easy is all this to manage and just get a bill and and just put my cost structure together is that something we can do or do I need to hire someone. That's a renewable professional is now on my staff to manage my future electric needs if if that's a big part of my manufacturing. 

28:33.41 

Russ Bates 

Yeah, that another great question Chris and no, you don't have to hire somebody once once the system is in. It's it's taken care of and you can have someone else do that operation and maintenance for you which is very negligible especially in the beginning with solar arrays. You're gonna have to. 

28:35.68 

chrissass 

So. 

28:53.53 

Russ Bates 

Change out those inverters whenever they go out and that could be 10 years on average. It's 15 years Um, and that's not a big deal and and we handle a lot of that with our partners. That's the the great thing about next gen it's a 1 ne-stop shop. You know they can call us and we'll handle all of that we do with a lot of things. Ah, so mostly what they see is if we decide to if they want to see what the system's producing. We can put ah you know the system in place where they can watch what they're producing and things like that. But usually it's once it's in It's really like dealing with their their utility. Um, they just get a ah bill for whatever. Um, from the utility and and they'll see the savings that they get from that that clean energy system that's been installed so really user, friendly and and not a lot that they have to do. 

29:39.69 

chrissass 

And are you competing generally and then with solutions where folks that want to come in and offer a managed service for this then is that kind of who your greatest competition is as you're working in this field. 

29:52.30 

Russ Bates 

Um, for us I would say we don't have ah a ton of competition. We're pretty unique. We've been around for like two and a half years now I think um and nobody's really copied us yet as far as what we do. Remember there's a lot of solar companies. There's microwind turbines ev charging things like that. But they're going in and talking to to clients with blinders on so to speak so they're just looking at solar or battery storage or whatever we go in and we put that that owner's hat on. And what's going to be best for us if we're if we're the owner we have this property we have this facility. We have this company Whatever what's going to be best and not only the short term but the long term. Maybe it's solar. Maybe it's wind. Maybe it's a combination of this and this and this um. But sometimes it's we'll recommend not to do anything at a certain point of time. Let's say they're their ros not in the best shape they're going to have to replace it in the next you know, 5 years Let's let's not put a system up there yet. Let's make sure we can do it in conjunction with your roof so we're not having to do a bunch of double work. It's cost us some business but we think that's the right thing because in long term we've got those long term relationships and that's what we're we're building this company on. 

31:03.94 

chrissass 

So are these customers also doing hedging and trading to to optimize their experience. Are they just a consumer are like are they seeing the point where they now can start doing some risk reduction through yeah through through trading markets. 

31:17.93 

Russ Bates 

Not so much I think you hit it on the head before they're they're really looking at their core business which is whatever manufacturing or if it's a warehouse or whatever and they're not really wanting to get into that so with like. Itc credits. For example, if they don't want to use that to offset their their tax burden and they'd rather sell them. We can help with that. But that's like 1 transaction as far as tried to get on the market and do anything now for the most part not and if they were. We're able to help them with that as well. 

31:50.10 

chrissass 

And when they put one of these projects in are they financed kind of like a ppa where I now have a controlled rate or is it simply just the sunk cost of the solar arrays that I'm putting in in the connectivity they put in for the project and I'm just cost averaging that as long as the life of the asset exists or ah. How am I figuring out my cost of energy going forward when you know I put so of a large warehouse or a large production plant and you know you you come in, you guys put solar panels across the entire operation I've got plenty of power coming in. How am I figuring out the future value three five seven years from now. What am I going to pay. 

32:22.41 

Russ Bates 

Ah, we'll lay it out. However, they want. So if if they want to own the system. We'll usually put a 30 year lifespan on that and and that's being a bit conservative because these things will go thirty five forty years depends on who you talk to some will say fifty years but we we're conservative will say it's going to be a 30 year system um, and then we'll lay it out. We'll get an escalation estimate of of what the utility is going to be doing. We'll put all the operation maintenance. All that kind of stuff in there for for the full term and they'll see that and and same thing with ah a power purchase agreement. They're going to be able to see all that if they want to go with a financing option. Um, traditional financing from a bank. Certainly that's not a problem and we can lay out all those projections on the financial end. Um, and then a cpace loan commercial property assessed clean energy loan. We can help them with that. We've got all the people in relationships in place to to bring that to them. So depend on what they want we can lay that out. 

33:18.30 

chrissass 

And program wise you just talked about the loan program. Um, you know So I imagine there's both state and Federal incentives for a business to do this? Um, what kind of incentives are currently in place for this for for you know, mid-sized business looking to do this kind of thing. 

33:32.23 

Russ Bates 

Ah, we we focus really on the federal incentives. So with the the ira that was passed last year and those those incentives which somewhere in place and they've just adjusted them ah a bit. Ah those Itc incentives typically you look at 30% depends on the project and you have to. To put the project in a certain way to to be able to get that and then there's also other incentives domestic content. You can get an additional 10 um, there's some brownfield site incentives as well for former coal and um oil and those types of of locations. Um, state. It's just going to vary on on where it's at so like in Ohio they're not going to give you anything but you do have those federal incentives that you you can take advantage of and we help in that regard to. 

34:19.38 

chrissass 

Now you mentioned supply chain and I think one of the incentives you said so are all the resources then to be disourced from within the us to get that advantage of 1 of the programs there or is it partially what how does that work. What. 

34:32.29 

Russ Bates 

Well, they don't really know yet. Um, so the the Irs put out some guidelines um in may and everybody been waiting on these guidelines to come out and whenever you read them. Ah, you could tell the irsrs wrote them because it really didn't lay it out. Very clearly it was more muddy than ever. So we're waiting on guidelines for the guidelines to say. But yeah, um, there are certain things like steel has to be 100 % sourced here in the us right? So that's pretty clear. But what does 40% ah content mean. To to reach that we're not sure does assembled and things from southeast asia count as that they don't really know there's different articles. The New York Times will put something out and it'll contradict what another publication is put out so I've talked with. Several renewable energy attorneys who are way smarter than me and they're scratching their head on it Chris because they're not sure so I everybody wants an answer I wish I could give you a clear answer but I just don't know and and most people don't. 

35:41.60 

chrissass 

Right? So the professionals don't know where that's going yet. The intent is some percentage needs to be on shored but the definition isn't clear so it's it's hard to get a good feel of what that's going to be quite yet here. 

35:52.92 

Russ Bates 

Yeah, because the supply chain doesn't exist for a lot of these things so like the wafers sells things like that that you use in in solar panels I mean that's that's not here in the us most everything is Southeast Asia that's that's where it's it's been offsourced for a long long time. So. I agree. Their domestic content is very very important but they really in my opinion and Joe or nobody congress called and asked for for my opinion but I'll give it here if they would phase this in and instead have all right if your your panels are assembled in the us. Um. That's great for so many years to allow that allow that supply chain to build up and then be pulling more and more from within the us to meet that domestic requirement is a 40% is it 80% I don't know but right now nobody I believe is really gonna be able take advantage of that domestic content. The way the way a lot of people are interpreting it right now. 

36:49.42 

chrissass 

But I have to assume since you're already in business for a few years that it still pencils out even without that incentive for for most of your customers. 

37:00.58 

Russ Bates 

Yeah, yeah, it really does and if it doesn't I mean we'll show them. Um, you know it's it's right there in black and white I mean it's all numbers. Is it going to make sense or is it not so but yeah for the most part it's without the 10% domestic content. You're still going to pencil out. Not as quickly to have that ah roi as with that 10% domestic content but you're still going to be over the long term saving quite a bit of money depending on where you're at and what you're paying now and and things like that. So. There's no real cookie cutter. But overall I'm going to say eighty five ninety percent of the. The clients we work with probably higher than that honestly Chris they're they're going to save money over the long term. 

37:38.83 

chrissass 

And then with the past few years there's been some supply chain hiccups or bumps in the road are we through that yet. Are we at a point where if you do projects that they're going to be on time and on schedule because of supply chain is is it are you capable to we get all the elements you need to make. Successful project in a timely fashion or are you still waiting on parts or. 

38:01.34 

Russ Bates 

Um, it really depends right now this point in time. Yeah, you're you're in decent shape. Um, and that could change any any minute it depends I know there's some oh ah. With the the solar panels coming from southeast asia those panels in general they wanted to put the tariffs back on and you know it was vetoed by Biden but that veto could be overridden that's still something people are thinking about so that changes how things are penciled. You know the the supply chain's a big reason we started tri sun solar which we'll start producing next next year twenty twenty four in q one is to have domestically manufactured panels with as much us content as possible here in the states that you don't have to worry about your panels being stuck in port somewhere. Um, slowing down your project I can tell you Chris I've been associated with 2 projects big warehouse projects Amazon actually that they they had to pretty much shut down because they didn't have panels. Everything was ready. They just need to put the panels in and and couldn't get them so that's a huge problem for sure. 

39:07.26 

chrissass 

Um, and then the the second element I kind of wonder with the greening going on at the pace. It's going on. Um, skilled labor to be installers for those panels or people doing the software to get it running or you know everything from the electrical work to the physical installation. Um. How are we doing with with that workforce is it available most markets and are we going to need more? yeah. 

39:30.90 

Russ Bates 

Ah, answer your last question. Yeah, we're gonna need a lot more. Um, there's it depends which region you're at some regions are doing a little bit better than others. Um, but I would say that kind of ties in with ah the Fossil Fuel transition. Um I came from that. That region right? from that sector of the economy of Fossil fuels and um, there's a lot of skilled workers there and as these fossil Fuel Ah sectors start receding that's a great opportunity to transition into clean energy because we need those skilled workers and. I Tell people all the time if I can make that transition anybody can because I'm I'm not that special. There's some really skilled people out there that can do that? Um, and then we we need some others um that you you don't have to be a master Electrician to come in and do this work right? Um. From frame assembly to to installing panels to a lot of these other things that they're skilled but they're they're not as skilled as say terminating all the cabling. You know, hooking up all the wiring so to Speak. So. 

40:35.92 

chrissass 

Um, but is that a high enough paying livable wage if if I'm putting frames up and I mean up on the rooftops of warehousing especially in sunny areas where you might want to do it doesn't sound compelling um sounds one step removed from Roofer which you know. May pay well or may not is is this ah a high paid or high enough paying career to convert right? So if you looked at the gas and nontraditional. So when fracking and all the things are going on a lot of people went into that because they come from markets where they could make a livable wage so is being an installer. Gonna be a livable wage. Oh. 

41:13.77 

Russ Bates 

Yeah, it is a liable wage and you got remember with the inflation reduction act that 30% itc that I was talking about. There are certain things that you have to to hit and part of the pay is is ah included in that. So prevailing wage is going to be part of that is someone who's putting together frames going to make as much as that that master Electrician who's who's really doing some technical work will know but that's throughout the industry. You know you'll have your apprentices I start off as a pre-apprentice right? so. I was doing some hard physical work. Um and not getting paid nearly as much as this guy standing in the cabinet. Just you know, hooking things up, but that's at skill level. So whatever you're doing and there people are going to be able work their way up and and some folks are going to be happy. Um, you know assembling frames and putting modules in it all day. Um. I was like that for a long time I'm like yeah this is this is good I think about whatever and and put these things in and go um, it's just going to vary but take it to your question. Yeah, it's got to be a livable wage I think that's really really important. You got to pay these guys and um guys and girls that are doing these things and. It's got to be something that they can live on so very very important and I think the ira adjusts or addresses that. 

42:29.35 

chrissass 

And go back to the first part of the question. So if you do let's say ah multiple state projects running at the same time right now. Are you having trouble staffing them or is is it going? Okay, right now that there's there's enough capacity to to deploy the project. So you know we've talked about supply chain now we're talking about the humans element to that. Yeah, um, is that there today. 

42:46.98 

Russ Bates 

Yeah, it. It is right now we haven't really seen too many problems with it. There's there's places where you're going to be running low here or there. Um and what we do is next Gen so these epcs handle the manpower. But. What we're able to do is help them with that so we have a lot of connections and relationships whether it's with Union Union halls or whether it's with other hiring firms to be able to help in that regard. So it just varies. But right now for the most part they've got enough people. But we know that's going to change that's going to change a lot especially when you think about the interconnection part of this and and tye in with like a pjm and and these different grid operators. Um, once those get better and you have more these big projects you're going to need a lot more people so there's lots of stuff in the queue. That's. That's not going because you don't have ah have that interconnection thus you don't need the people supply chain all of that kind of stuff I look for that to change and when it does. That's where that's where you really got to see some sort shortages with with labor. 

43:51.93 

chrissass 

Was running up the time I guess ah you know if you take out your crystal ball and tell me where this is going. So yeah, you've talked about a pretty positive outlook you seem to think the the market is ripe. There seems to be a lot of activity you you can see demand coming what changes over the next two or three years that that are going to be remarkable enough that that the average american might notice. 

44:15.12 

Russ Bates 

Um I I think supply chain as far as the domestic supply chain. Um and manufacturing for the the parts the raw materials that we don't um, have right now that we get out southeast age I think that's going to be a big thing that we see in the next several years. And that all kind of cascade into the domestic content and manufacturing you know I mentioned triso and solar earlier. There's there's others that are getting into that. Um, when you think raw materials like glass. Ah the the wafers of cells all this that's going to create a lot of jobs and it's going to be right here in the in the states. That's 1 thing. Um I think as time goes on, you're going to see a lot more of these corporations and that supply chain up and down for just your everyday stuff transitioning more and more to meet either esg goals or in my case I think what they're going to see is. The economic improvement that they're going to have on that bottom line by making this this adjustment so I see really really great things for this industry for the foreseeable future. 

45:15.16 

chrissass 

And are you are you having to show Providence of those electrons where they come from are are people already forcing you to say hey like we're running in this percentage of Green is that is that part of the plan or is it just straight economics for most. 

45:31.39 

Russ Bates 

It's really, um, mostly straight economics right Now. Um, now there's some that it's not so much economics. They want it to be economically feasible. But if that ah Roi is is further out. That's okay with them because they're doing it for for these initiatives and and it's okay and these are pretty profitable companies and and can afford to do that right? So it's It's a more of a feel good thing but they are going to save some dollars down the road. It's just further down the road. 

46:01.21 

chrissass 

Awesome! Well I appreciate you joining the podcast today. It's been an interesting journey. It's It's very domestic focus which is great. We got to see what's happening any final thoughts as we're signing off. 

46:11.45 

Russ Bates 

I know Chris I just really appreciate you having me here hopefully people hear this and want to get involved with this this industry because it's a great one and there's a lot of opportunity. So I invite anybody to to join. That's that's even considering it check it out. 

46:27.90 

chrissass 

Well thank you very much for our audience. We hope you've enjoyed this episode enjoyed the content if you did please don't forget to subscribe follow us look for us on Youtube look for some Facebook and we'll talk to you again next week bye bye.