The Hidden Cost of Too Many Tools in Solar Development Today ft. Douglas Geist | Soliverse Ep. 44

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0:00Douglas Geist: The internal loss of control of your data is pretty amazing, especially considering that it's like an internal organization. Then you start dealing with an EPC that's external to a solar developer, and that EPC might be using a different engineering firm to be able to do things like ground grading. Keeping track of everything is a real nightmare. And it's one of the biggest problems that our customers continue to talk to us about.

0:23Peter Pongracz: That is Douglas Geist, co-founder and chief commercial officer of PV Case. They surveyed over 400 solar professionals and found that teams run up to 12 tools per project. That fragmentation costs solar teams control over their data at every single handoff.

0:41Douglas Geist: We did our own in-house research study last year amongst 400 plus industry professionals. And one of the things we were talking about is like, what does the tool step look like that you guys are working through and how many different tools? So you mentioned five. I think we heard like it could be anywhere between six and ten, maybe as high as 12 in some cases, just the different places.

1:01Peter Pongracz: He believes that good surveys prove why unified workflows protect margins before construction even begins. In this episode, you will learn by running up to 12 tools per project face hidden data loss. By losing internal control, costing days of work and duplicate effort, why collapsing a stack into one unified workflow protects margins? And how to blitz scale a company from Lithuania to dominate the global design software market globally.

1:33I'm Peter Pongrats, and this is Soliverse, the future of Solar. Welcome to the show. Before we dive into PVKs itself, how do you end up in Solar?

How Douglas Geist found his way into solar

1:44Douglas Geist: How did I get to Solar? Solar is also, as I said before, kind of like my wife. Um brought this to me through her Instagram account, actually. She became friends with um David, um, the other co-founder, through Instagram because he was living in Germany and he was originally from Lithuania and was getting ready to come back and get married and was doing a lot of traveling back and forth because he was also starting his design consultancy business in the solar industry at the time.

2:12And was interested in you know what's going on with restaurants here in Vilnius because you know, they were just transitioning to the euro. There was a lot of EU money coming into the country, restaurants popping open, none of them stayed open for very long. It was like three, four months, they closed down and something else would open up in its place.

2:28But there were lots of things. My wife was early adopter for Instagram, taking pictures of almost every meal that we ate out, and that all found its way to to Instagram. And then David would ask her for recommendations. And so we'd eventually wound up meeting for drinks one night and uh immediately hit it off and became very good friends and did a bunch of traveling together.

2:49And as we would be traveling and kind of both working remotely, we would just start talking about our businesses and talk about you know what we were doing and how that was. And, you know, most of the work I had been doing at that time was consulting uh residential and commercial mortgage businesses in the US on sales and marketing, scaling their sales organizations, growing it and um utilizing kind of the same type of structure that, you know, I think a lot of SAS businesses have with sales development representatives and AEs.

3:18And um, you know, we basically got talking about that and he wanted to scale his design consultancy business in. You know, engineering for me wasn't really very interesting. Um, you know, it's my background is in finance and insurance. Um, not so much insurance isn't that interesting either. But um, you know, as far as like engineering, I didn't really think that I wanted to sell engineering services.

3:42Then about a year later, I went to meet him at his office in Komos here in Lithuania. And he introduced me to his engineering team and sat me down with the engineers and they showed me how to design a solar park. It was a disaster for me. Like, literally taught me like how to do it. And um, and then they showed me how they do it with this in-house tool they had been building, which eventually became PvK's um and our ground map product.

4:06So um, as soon as he started talking about like, you know, we're not really thinking about scaling the engineering part of the business so much anymore, we're really thinking about scaling the software side of things, that became much more attractive and much more interesting. And so that's when um, you know, as they kind of had come together with like an MVP with uh the other co-founder, Adam.

4:28Um, at that point I joined in order to be able to, you know, scale the the the business. So that was my introduction to to solar at that particular point. So I kind of got very, very, very deep into it very quickly um because I just saw so much potential for the amount of time savings we were able to generate for the engineering team um at Detro, which is David's other company, and uh it was great.

4:56So, and then it was a rocket ship.

Was PV Case always built to scale as a SaaS business?

4:57Peter Pongracz: True, it's uh fast forward eight years. You know, you guys are probably one of the most successful software companies in solar period, right? So uh and you gave me so many, I actually took so many notes here to go down different avenues as well. So so you you were in sales professionally from the get-go. So you you were actually coincidentally meeting with David, and and was the like was the path kind of clear that this is meant to be built for scale, or you you were testing the waters and seeing like, okay, if we spin it into like a SaaS company, is it going to be an easier scaling, obviously, than a consulting business, right?

5:37Douglas Geist: So interestingly, as we started, like as I said, engineering scaling an engineering business wasn't very attractive for me. Um I had um quite a few friends from university that had gone into various different software businesses, um, several of which had exits at some point. And um, you know, this was at the peak of SAS in terms of like businesses just scaling and going crazy.

6:06And so um, you know, I had been following the successes of a number of my friends and and and fraternity burlers from university. And when David started talking about software, it was like that that was the thing that immediately piqued my interest and said, like, if this is if this is a real potential, this could be the thing that ultimately winds up being able to scale very quickly.

6:26You know, you could take a business that's you know, saw a subscription business based in software with uh multiples that were going around, you know, eight and ten years ago and six years ago, and you know, you could grow that business to a valuation significantly higher than you could a consulting business in the same period of time, simply because of how those two businesses are fundamentally different on how they get valued.

6:52Um, and so, you know, it became very clear very quick, also because you know, David's company was using it internally in order to be able to provide design services for several other companies within the solar industry, several of the biggest companies in the solar industry at that particular point in time. And some of the things that like the customers were asking questions on, like, you know, you know the business.

7:15It's you know, you start doing a design. It's never, you never get the design right the first time. You never get the right module right the first time. There's always a need to change a design, there's always a need to redo something. There's always a new piece of information that comes into the equation at some point that you then have to make an adaptation and potentially, in some cases, start over from scratch.

7:35Um, and so, you know, as that became the case, his business would get a request to change a design. And, you know, that used to take them two or three weeks to make the change. Now all of a sudden they're making those changes in like a day or two. And the customers are kind of curious. And so when the customers started getting curious, started talking to them about the software offering that we had internally, and they wanted to see it.

8:02They wanted to be able to get their hands on it. And so we kind of got very quick traction with companies that had been working with his design consultancy business in order to be able to start it basically supporting some of their in-house engineering with the software as well. And so um we got traction pretty quick.

8:19Peter Pongracz: That's a textbook startup success story, right? But um, I I took some notes here on the side while while you were talking. I I I could pick up on so many of these things, but you mentioned, you know, the consulting versus the SaaS business, right? So on one hand, you have the kind of linear potential of growth, and on the other hand, you have the exponential.

8:37So that that makes perfect sense. But if we look at SaaS and AutoCAD, right? So it's kind of related, but it's not the same thing. So, like, how were the first discussions when it comes to AutoCAD first? So basically desktop-based software versus something that's already back in those days, the cloud was already, you know, the the kind of uh direction to go to.

Selling cloud software when AutoCAD still dominated the market

9:03How did those uh discussions go?

9:06Douglas Geist: From the sales side of things, it was a conversation. There was a lot of education that needed to go on in terms of um, in terms of you know, educating the customer on what this was. Fortunately, I think at the time that we were really starting to engage in those conversations, AutoCAD had also been looking at shifting some of its pricing model as well.

9:28And they were changing some of their product in terms of it is still an install, but it wasn't the kind of install where you know you would kind of have the one version and then um you know upgrade at some point later on. They were trying to roll out more of a subscription-based model as well. And so while it was on stalled, you know, on on-prem installed software, they were rolling over to more of a subscription type of a model.

9:52Um and I think that that ultimately kind of helped us out a little bit at that point in time because they were starting to get familiar with it. Um, and there were also a lot of these other businesses, they were using other software also that was now already on the, you know, on a subscription type of a model. So, you know, they weren't happy. And I think you know that that helped our conversation somewhat in those in the and during that time period.

10:14We still have companies that are like, is there an option to be able to buy it for life? Like, can we pay to buy it for life? And I'm like, I don't know if you're gonna like that price. Um, but yeah.

How PV Case built a premium product in a niche market

10:25Peter Pongracz: Always a possibility, but it's not uh not not not rooted in uh commercial reality, I guess. So it it makes sense. And uh you mentioned subscription and and the subscription model. Um I I wanted to double-click on that because what you guys did is quite remarkable in the sense of creating a premium product or a premium market for that premium product in an extremely niche market, especially back in those days.

10:51Now the market is subscribantially larger. But uh, was that intentional or or was that part of the strategy back in those days already?

10:59Douglas Geist: Or yeah, it was. I mean, yeah, there were other players in the market already. And you know, where we learned very quickly we had the ability to be able to win was on offering a product that was also somewhat of a service. Um and so you know, we our product was being offered with the software plus all the training you could all the training you could use as an engineer, all the support you could use as an engineer.

11:34And you know, at the time, some of the markets that we were dealing with, you know, solar was not new, but the size of the projects was new. They were getting into these bigger and bigger and bigger projects. And so you're dealing with things like more complicated terrain, uh difficult, difficult like earth structures and and and things that were complicated.

11:56And so they were asking questions all the time. And so for us, this was an opportunity for us to set ourselves aside as kind of a sauce business with some consulting, but the consulting wasn't charged as a separate service line item. It basically was all bundled together as the same. And so ultimately, this is the area that I think we really did well early on in terms of being able to deliver very quick support.

12:20You know, I think most of our service tickets are answered in less than five minutes. Resolution is done in just a couple of hours at b at most. Um and, you know, we we we're we're an engineering company. So like most of the team is engineers that are ultimately helping to facilitate that with experience having done solar projects before. Um, so it's in in this area that you know it's kind of like we're an extension of our customers' internal teams.

12:46Um, and so that's been the thing that, you know, helped us be able to establish ourselves as a premium product. We were higher priced than anything else that was available on the market at that particular point in time, but you got more, and what you got was better. So um I think it was warranted.

Raising over $120 million: the VC pitch for solar software

13:02Peter Pongracz: Maybe it begs the the next step of your evolution of the funding runs, right? So you guys raised over $120 million plus uh so far across what is it, three or four runs by now? So that gives everybody can do the maths on the back of the the napkin of what valuation that would add up to. But what what was the the main pitch towards the the VCs? Who how did you guys manage to convince them that this market is, although, especially back in those days, it was quite niche, now it's it's gotten substantially bigger.

13:36What was the kind of value add that uh that you guys managed to convince them over?

13:41Douglas Geist: I mean, I think for us, I think the the it was the speed with which we were scaling, um, it was mirroring what the solar industry as a whole was doing. I mean, if you go back eight and ten years, solar was exploding. Um, you know, and you know, I was actually thinking about this the other day as you know, most of the markets around the world currently right now are struggling with being able to bring projects online because of grid concerns, because of bureaucratic concerns, things along those lines, government policies.

14:14And I think we may have helped create some of that bottleneck by enabling so many engineers and so many developers to be able to do designs and submit so many project applications to the queue that ultimately I think some of that bottleneck is probably somewhat enabled by the fact that, you know, companies were able to scale so quickly as a development, as a bit as a solar developer.

14:35There are certainly projects that have been done over the last six or seven years where five or six of our customers were working on submitting bids for the same exact project. Um, and so, you know, I think that was something that during the fundraising was evident already. And so, you know, as it was um kind of easy for us to be able to provide visibility into the growth path that we had had, showing where we were still not penetrated, it became a very I wouldn't say it was a difficult process to be able to raise back then.

15:13If we're I think if we were trying to do that today, um, I think we'd have a much harder, much harder problem today. Um, especially with all of the bottlenecks that we're currently seeing. Also, I think that I think development for solar development is also much more challenged today than it was back then in terms of being able to get projects funded.

15:32Um, with all of the incentives that existed back then, with all of the tax credits that were available, um, interest rates certainly being lower at that particular point in time. Private equity, um, very large infrastructure funds just throwing money at solar development. Now they're still throwing money around, but they're throwing it now towards data center development, right?

15:58And so it's getting less attention into solar and it's more into data centers, but at some point they're going to come back to the realization that they got to be able to power those things. And solar is, I think, you know, we're seeing that already, especially in the US. We have a lot of customers in the US that are, you know, traditionally solar developers that are dabbling now in data centers and looking now at co-locating those two things together in order to be able to get these things up and running online quicker, uh, because they just can't get the grid capacity.

16:27So um it would be a different story for us to have to raise today in those under those same conditions.

16:35Peter Pongracz: For sure. And I mean, you know, as as everybody can appreciate, the markets are always cyclical, right? So as you mentioned, a couple of macro macro items, you know, as such such as the interest rates, the political uh push or pull, it it it always changes the landscape. But of course, it's always better to uh to to be growing in a hot market, right?

Expanding from Lithuania to the US market

16:55It uh and the the rising tide uh floats or lifts all boats. So uh and and and that's exactly what you guys did. And and on on the scaling side of things, so you guys started out of Lithuania, which is a tiny, tiny country from uh I I even inside of Europe. You scaled uh across Europe and then you now you are truly global. Like how was the kind of first step into the US, for example, because that's that's a major market for you guys as well, and it's it's a very different kind of mindset as well, right?

17:26Douglas Geist: Yeah. I mean, we went to the US early, to be honest with you. Um we went to our first trade show, which was you know, RE Plus, before RE Plus was RE Plus when it was SPI in Salt Big City, and I want to say that was 98 or 99 if I remember 2018, 2019. Um and you know, I think being present at that show, um, I mean, this was so early that because we had built the product here in Europe, everything was in metric units.

18:03So we're at the trade show at SPI showing how to be able to do solar design with PVK's ground mount product, and everybody's looking at it going, do you have this available in um in US units and imperial units? Is this like, or is it only gonna be available in in metric? Um so we came back from that trip immediately, and it was like myself and Adam sitting there going, okay, we're gonna have to figure out how to be able to make sure that we back engineer all of this and to be able to understand all the algorithms now and to be able to work in those units as well.

18:31So it was an interesting challenge. But you know, at that particular point in time, from the perspective of a sales conversation, there was no real difference. It was, you know, everybody was having the same problems, right? Designs take a long time to ultimately be able to do. We're having to redo designs multiple different times. We need something that's gonna be able to help us do this work faster and more accurate with less mistakes, um, so that we can actually just be able to get this stuff done in a much shorter period of time because the demand was there and they just couldn't keep up with it.

19:02Early days, that was the case, you know. And I think we've seen it because become a bit more, you know, I would say segmented between the US and Europe um, you know, over the last couple of years. But you know, six, eight years ago, I would say it was probably still the same.

Has solar design gotten more or less complex over time?

19:16Peter Pongracz: Do you think that the design process has actually gotten more complex or less complex? Because on one hand, you have more tools to solve the problem, right? But the comp on the other hand, the complexity has increased, right? Because we have larger sites, all the good and easy land is gone. So now you need to really go into terrain and you know in the in the hill side as well.

19:39So so what what's your what's your thoughts on this?

19:42Douglas Geist: You know, it's market by market, to be honest with you. Um you know, companies that are some of the companies that we deal with in the US that are doing, you know, really big projects, they're doing it's flat land, right? It's it's flat land. Um same thing in the Middle East, customers we deal with in the Middle East. It's it's the complexity there is simply just based on the size.

20:04It's not based on the design. The design's not really that complicated, to be honest with you. The bigger they are, the more they just look like a grid. And it it's it's uh it's an easier design methodology, I believe, in order to be able to get those done. You know, when we when we first started selling, like Germany was one of our first markets that we really went heavy again, heavy in.

20:24And and what you just said, all the good land is gone, all the flat land is gone. Like that's what we were hearing back then, right? And we just continue to hear it over and over and over again. Where things have gotten, I think, more complicated now is in the fact that you have to try to design these projects to be, you know, multi-use is I think the the term that, you know, kind of most markets are currently using.

20:45So you gotta be able to have some form of agriPV associated with it in some markets, or you gotta be able to, you know, satisfy some other condition in order to be able to get it approved. And I think that complexity um is what makes it actually more complicated these days, rather than you know, simple things around like the type of land that you're ultimately on.

21:08And also restrictions in some areas in terms of certain markets not allowing any sort of you know significant ground grading any longer. Like this is one of the areas that um, you know, companies were really, really looking for a solution that would be able to help them figure out how to maximize the cost effectiveness of their ground grading um on a project.

21:30And now you're looking at some markets where it's like not an option, you know. So these are areas that, you know, certain technologies like terrain following trackers are certainly helping in in a lot of those cases where those where there's a repro uh you know appropriate for the market and for the geolocation. Um but I think it really depends on where the project is located, to be honest with you.

The grid connection bottleneck and what comes next

21:50Peter Pongracz: True. And I mean it it is it is getting uh more complex from a kind of permitting and and grid connection perspective. Uh Uh but the the actual design is not the bottleneck, right? The the the bottleneck right now is connecting to the grid, you know, getting it approved, getting it, getting all the paperwork done, which is uh constantly changing as well.

22:13And from a European perspective at least, it's uh we are trying to harmonize all those processes, but uh uh it's it's not going as fast as it should, right? And it's uh it's a clear indication that we saw last year, you know, that uh first time uh there's a drop in installations in the last 10 years.

22:31Douglas Geist: I know of one or two companies out there that are really, you know, they're like stealth startups that are currently looking to solve this problem. I think that is like the next big opportunity, is really in that area of how do we ultimately wind up? And it's really at the government level that I think that this ultimately needs to have the impact because business and capitalism, I think, is really good at getting from idea to cash as quickly as possible.

23:01It's all the hoops that have been put in front of us that we have to jump through in order to be able to get these projects approved, to get these projects connected. Um, you know, I've heard in doing this for eight years, I've heard some nightmare stories of you know, especially in the Australian market. Like six, eight years ago, we were in Australia.

23:21We had a couple of customers that had built large projects and they never got connected. Never. Like that's crazy.

23:33Peter Pongracz: But in in Australia, it's a little bit different than uh in the in Europe and US, right? Because you can kind of live with it not being connected to the grid. So now what I I uh last week I just recorded um another episode with uh a good friend of mine, Gavin, and he's uh he's focused on Australia. And he said, like, okay, the microgrid grids actually make much more sense because the population density is so low, and and uh if you have a city or village is so concentrated that you can get by, you know.

24:02But here in Europe it's uh it's a very different situation, and in the US, it's something in between, right? Yep, yeah, that's sure. That's also uh uh an interesting way of uh framing framing that part. And you've touched on um the sites already uh and and the terrain itself. So you guys uh acquired Anderson optimization about two years ago. Can you can you explain three full years?

Why PV Case acquired Andersen and what it unlocked

24:29Three years already. Okay, so then time time flies by. But uh what was the main rationale behind uh was this always part of the strategy strategy to integrate um a site selection tool into PV case's umbrella and create a continuous workflow, or was it just kind of a matchmade in heaven kind of uh uh situation?

24:52Douglas Geist: So, I mean, it was you know, the vision for PV case very quickly um after seeing the early success that we were having with the design tool became to build kind of the end-to-end solar development platform. And so with that being the case, ultimately, you know, it made sense for us to look earlier in the project lifecycle than the initial design. And so to be honest with you, the acquisition came up, not that we were particularly looking for that at that particular point in time.

25:25This was a situation that the timing was just right. We were in engagement with Anderson basically on an integration level. Um, we were integrating with them uh in order to be able to reduce some of the friction that some of our customers and their customers are experiencing with bringing um their files into PV case as the starting point to do the design in a way in which we were able to kind of better align the layers that they had in theirs with the layers that we have in ours.

25:53And so as we were working on that, we started to see that the teams really worked well together and that there was an opportunity for us here to kind of be able to take this and do this now in order to be able to start moving earlier in the project lifecycle uh in order to be able to help facilitate this. So um it was an opportunity that we kind of jumped on at that particular point in time.

26:15Um it's one of the reasons that we did the acquisition, uh, not the acquisition, but the fundraising at that particular time in order to be able to complete that transaction. Um, and so you know, we were doing an acquisition and a fundraising at the same time, and it was kind of like opportunistic, so it wasn't really planned. Normally you do like a big planning and building up to be able to do a big fundraising.

26:40Um, so this kind of all came together just kind of like all at once. Um so it was a stressful time. I would say it was averaging like two, three hours a night's sleep for like six months during that entire time and during that entire process. Um, a lot learned, but I think at the end, the net result has been has been great. So, you know, we have uh really good customer overlap now.

27:03We have a good attach rate between between you know customers that were theirs that are now using PVK's ground mount and and vice versa. So um at the end of the day, I think it's it's definitely been a success and something that we would be looking to do more of that in the future.

What is the five year growth strategy for PV Case?

27:17Peter Pongracz: Yeah, and it definitely pays off to be opportunistic when uh when the time is right and and uh the target is right as well, right? So on that note, are are you guys looking into any particular areas or domains within solar for companies to potentially acquire or or what is the the maybe the let's rephrase that that question, what is the main growth strategy for the next five years for PVKs?

27:41Douglas Geist: So we I mean, we are looking to continue to build out that vision of the N10 solar development platform. And so the area that we're currently focusing on, currently right now, is if we think back to, you know, you mentioned before, design isn't the tough part about getting a project approved or getting a project done these days. There's you know numerous other reasons that cause that to fail, whether it be financing, whether it be bureaucratic nonsense with permitting, with grid connection, with any of those other things.

28:13And so um, those are the areas that we're currently most interested in kind of evaluating and looking into, um, and trying to help our customers be able to see higher levels of success on those projects with waste less wasted resources. So ultimately being able to bridge the gap between getting a project approval, um, like doing all of the permitting, doing all of the process, and actually one up being able to get it approved.

28:47Now, there's a lot to unpack within that, especially considering that, like we mentioned before, like governments and bureaucracies are ultimately right now the biggest bottleneck to that entire process. Um, but currently, right now, we where we've been focusing is mostly on the design process and mostly on the on the site selection process prior to that.

29:07There's an awful lot more that we can do in terms of being able to bring together the rest of the data that ultimately winds up being part of that entire approval process and helping to smooth down the those transitions of where paperwork, where processes change hands, uh, where data ultimately winds up getting lost in the process. And those are the areas that currently we see the most value of being able to focus on in this particular part of the cycle.

29:29Um so that was that's the area that we're currently focusing on.

29:33Peter Pongracz: That's uh the the right angle, you know, at least um from speaking to PCs and project developers as well. That's something that keeps coming back, right? That uh everybody wants to work in one continuous workflow where you don't lose data between the connections and you know, uh and most uh companies are still using at least five plus uh tools only in the solar design domain, right?

29:58So uh especially when we we look at uh you know the the yield simulation with uh PV Syst, it's still kind of uh a monopoly. And you guys have your own yield model as well, and there are a couple of other nice tools as well, uh Plant Predicta as well. And it's uh it's interesting that um, you know, the banks are so archaic that they are still stuck with that solution, and that's that's what they recognize, right?

30:24Douglas Geist: I agree. I think this is an area, you know, we did um we did our own in-house research study last year amongst 400 plus industry professionals. And one of the things we were talking about is like what does the tool step look like that you guys are working through and you know how many different tools? So you mentioned five. I think we heard like it could be anywhere between six and ten, maybe as high as 12 in some cases, just the different places.

30:49And that's like also depending on the size of your organization and how the organization is structured, and whether you're a pure EPC or you're a pure developer versus, you know, you do some EPC work, you're also a developer, you're also an asset owner in an IPP, like it becomes really, really messy. And the internal loss of control of your data is like pretty amazing, especially considering that it's like an internal organization.

31:19Then you start dealing with when you're dealing with an EPC that's external to a solar developer, and that EPC might be using a different engineering firm to be able to do things like ground grading. Keeping track of everything is a real nightmare. Um and it's one of the biggest problems that our customers continue to talk to us about. Um, it's one of the things that kind of think really slows things down and causes a lot of duplication of efforts that ultimately is an area where we think we can ultimately continue to be able to drive um additional efficiencies within our customers.

31:53Um and I think at the end of the day, that's ultimately where the most value can be gotten over the next couple of years for our existing customers and continuing to work with us.

32:01Peter Pongracz: True. And yeah, the the data loss is one thing. And then of course, we can go a little bit broader with the scope covered, right? So we mentioned the the site selection, we mentioned the design. So uh you guys also do uh quite a lot on the Sybil side as well. Um, is there any um ambition to look into more of the OM uh part of the process as well after commissioning?

32:26Douglas Geist: Or yeah, I think that's in it that that that is definitely on the roadmap. Um in terms of the timing of doing something in that space. Um I would say we haven't made any decisions on when we would but to move in that direction. Um but I think operation and maintenance I mean, you know some of the players that are in that space. It's not been a very easy um market to be in.

32:53Um as much as you would think that this is a great market, there's more and more assets going to be coming online. It's one of the areas where you know companies in that area continue to struggle. And I think it's what I'm afraid of in that market is that it just becomes a race to the bottom, right? And I think this is an area also where I think that, you know, with all of the new cool things that are happening with AI, I don't know how much of a moat you can realistically create in that space when things like Claude or any of these other things can pull data together so quickly, so efficiently, build such cool dashboards and things like that, that I think I think there'll be, I think there'll be some new players in the market that I think will be able to do fairly well for a period of time.

33:39But the longer term on this, I'm not sure how much how how protected you can realistically be when AI is going to be able to do so much with well-structured data. So the question will become realistically is does the solar industry or the energy industry people have the propensity to be able to structure their data well enough that they could utilize AI tools themselves in order to be able to replicate some of the monitoring platforms and the OM space?

34:09I'm super excited about what AI has the capabilities to ultimately be able to do in the future, but this is an area where I do have some caution in terms of you know how disruptive this area might ultimately get.

34:19Peter Pongracz: If you want my opinion on this, I think the the biggest value add will be will happen when you will be able to truly translate the physical world into digital. And and that's that's the part where AI can't help you, and and that's going to be really, really difficult to do.

34:38Douglas Geist: Agreed. But that's also one of the areas that I think most of the players in the current market also don't have that capability currently today. I do think that that's an area that I think we would have a have a have a pretty good opportunity.

Is the solar software market heading toward consolidation?

34:50Peter Pongracz: Speaking of um different players and uh and perhaps you know acquisitions and and uh one company purchasing the other one, what do you see uh in the market? Do you do you also have this sense of um basically the the bigger players are acquiring the smaller ones and it's getting a little bit more concentrated because of course we are still in a slightly uh downturn economically, right?

35:19Douglas Geist: So I mean, I is are you talking about in the software side of this business or in the you know customer side of the business? Because what is it, Nexterra and Dominion just signed a deal two days ago? Um or two days ago or yesterday. Can't even keep track at this point. Maybe it was just yesterday.

35:34Peter Pongracz: Yeah, but maybe let's dig into both.

35:37Douglas Geist: I think that the market is ripe for consolidation right now. I really think that it is. So and I think that that's actually on both sides. I think that in terms of like our customers, the bigger energy players, I think there's a lot of pipeline that can ultimately be purchased through through through MA. And I think that that's ultimately happening.

35:55I think that's kind of one of the the things that we're gonna see more of in the US over the next six to twelve months. Um, and I think that, you know, on the software side of things, um, you know, when we see a market downturn like this, I think it makes customers more cautious about their acqu their purchases. Um I think one of the things we hear from our customers is that they go through an awful lot of hoops, some of our bigger enterprise customers.

36:23They, you know, they have a lot of internal processes that they have to go through in order to be able to make software acquisition costs. And for them, it would be much easier for them if they could buy more through a single vendor. And I think that that's what we continue to hear. Um, and so, you know, where we see possibilities to, we're entertaining ideas to be able to make acquisitions that are, you know, in areas that are not specifically in the design space, but in areas where our customers would be looking to be able to purchase additional services or additional um software to be able to do other parts of the work that they do outside of the design piece.

36:58I won't share any of those specific areas right now.

The 400GW pipeline stuck in European permitting queues

37:01Peter Pongracz: Yeah, you don't don't need to don't don't need to disclose any anything prematurely, but uh uh yeah, uh you you mentioned a couple of things here I I want to zoom in on as well. So when it comes to pipelines, yeah, this is something that keeps coming back uh every every single week and and month this year. I was just at a solar conference here in Brussels, the solar power summit two weeks ago, and uh we had uh an analyst from the International Energy Agency uh discussing pipelines and flexibility, and basically she said that we have over 400 gigawatts of renewables in Europe stuck in the pipeline.

37:42So basically, these are projects that could technically be connected tomorrow, but because we can't, you know, um permit them, it's it's impossible to get to. So, you know, that again it comes back to the same thing, right?

37:57Douglas Geist: I mean, it it totally does. And I guess if you're thinking about from an MA perspective, and if you're looking at buying additional pipeline from another another developer, I think there's gonna have to be some sort of like discount on this at this particular point, right? Because there's no way to know at this point when anything is gonna ultimately come up.

38:15Um and I think that, you know, if I if I were if I were looking at this business from as an as an investor, looking for projects that are closer to being ready, that already have any sort of permitting approval, those are the only types of projects that I would be thinking about buying or investing in. Because the days of speculative solar development where, you know, you kind of do the first couple of stages of this and then you flip projects.

38:46I think those days for now, I think those days are over. Um, I don't see, I don't see where that is something that most companies would be comfortable buying, any sort of portfolio of projects like that in today's kind of market. They're just locking up capital for too long.

Will battery storage be the key to unlocking the solar market?

39:02Peter Pongracz: Speaking of markets and targets, do you see the the market shifting anytime soon in the the foreseeable future?

39:10Douglas Geist: I mean, I think the only hope that we have for anything shifting in the near term is with more batteries coming online faster. I think that's the only way we can ultimately be able to accelerate at this particular point in time. The problem isn't being able to design more projects, it's being able to get more projects that are currently designed and waiting for approval approved.

39:32And I don't think that there's a, you know. There are some countries that are making the investments in their grid infrastructure now that could be able to ultimately help support the injection of more solar energy, but it's not going to be enough to help us be able to hit that without the assistance of battery storage in any in any way, shape, or form.

39:51I think it's really incredible the speed with which batteries have taken hold and with the speed with which we're developing battery source standalone battery storage projects. Um, I think it would be great if we saw more battery storage being tied to already existing solar projects. I think that's an area where I think we could ultimately wind up seeing some real significant improvement.

40:14They're already, those solar projects are already there, they're already existing. Let's level out what it is that they're ultimately injecting by using those batteries. Um, I think that that would be a huge, huge way forward. But uh until until we have some form of um, you know, stabilization, I like the internal maths of the grid, I don't see being able to support that initiative as it currently stands today.

40:40Peter Pongracz: True. And uh what also keeps coming back is you know that uh sometimes even uh people mention that BES itself might not be enough either on its own, but we need to also think about more flexible generation. So you see this, you know, in uh kind of non-traditional tracker markets, right? Like Germany, you know, the the negative pricing uh during the midday.

41:04And then everybody's installing more and more trackers as well, which wasn't the case a few years back. And and the the market is really shifting, you know, like on one side the flexible consumption, the other side flexible generation as well. And that's not not really easy to do from one day to the other.

41:20Douglas Geist: I think it's also really difficult to model out financially when you don't know what the market is going to ultimately look like in a year or two. How do you make those kind of decisions today?

41:31Peter Pongracz: Um I think that's one of the biggest challenges that we have. Aaron Powell We often forget about in the in the solar or renewables is that as long as the maths add up, everything will move uh with it. But uh, you know, we can talk about policy, we can talk about uh, you know, uh ideology uh behind it. But if the financial incentives line up, then everything is going to accelerate much faster.

41:56Douglas Geist: I agree. I think that they do, as long as it's also like with the appropriate level of risk. And I think that government policy is one of the things that's making that assessment of risk really complicated at this point, because you know, the smallest change in policy can ultimately wind up drastically impacting timelines, it could, which ultimately then have significant changes in your return on investment, your IRR calculations.

42:20And I think this is the area that, you know, if if the European Union, if the world really wants to hit these renewable energy targets, like they really need to look internally to be able to figure out what they need to do in order to be able to start being able to move faster on the approval processes, on the permitting processes, and being able to get these things approved and moving through the pipeline faster.

42:44Uh, because otherwise there's no way it's gonna happen.

42:47Peter Pongracz: So when it comes to you know all the hardware components that are part of the whole solar process itself, you know, we have some new regulations coming out soon, at least here on the European side, but in the US, it's already there that uh you won't be able to use you know certain uh certain uh hardware to to your projects, etc. Uh, it also makes that complexity a bit more harder as well.

How PV Case handles hardware component selection in its software

43:13And do you guys have any sort of methodology behind which uh components to integrate in the design software? So it makes it easier for engineers to model those?

43:25Douglas Geist: I mean, so the way that the the way our software is currently set up, it's very agnostic. So the users actually are able to establish the presets that they are going to ultimately wind up using. Now we're moving forward in the near-free future with being able to introduce some of a component library where we'll have the ability to be able to make a choice of a particular inverter, a particular uh structure, uh, particular modules.

43:49And that's there primarily to be able to help ease the design process. Um, it's not necessarily to make those kinds of recommendations. I think one of the things that we've learned from you know, working. Working with so many customers is that for the most part, you know, they're not going to choose from, you know, 15 different manufacturers. They already have agreements in most places with a couple.

44:11And so they know already which ones it is that they're going to ultimately be working with. And but one of the things we're hearing more and more is from actual OEMs that are interested when they come out with new technology. How can PVKs help us get in front of more customers to help be able to show them the differences in how our product works as compared to somebody else's?

44:32And how can we help be able to set them up to be able to do these types of comparisons between new technology and old technology and help to be able to tell that story better? So this is something that we're currently looking in, we're currently working on in internally with our partnerships team in order to be able to help evaluate how we could come together with a solution that would give customers the ability to be able to highlight those differences and run multiple simulations comparing different pieces together simultaneously through the selection of those through uh through our through our through our component library.

45:03Peter Pongracz: Okay. And uh when it comes to uh the the technical solutions that are coming out, uh do you guys have a uh a strategy or a mantra that based on which you would choose certain partnerships or or is it more like customer driven that this is the feedback that we are receiving from our customers? And we would therefore we would look into integrating X or Y component into the software itself?

45:29Douglas Geist: I mean, I would start by saying that you know we're customer first always. So, you know, we are very active and get actively engaged with all of our customers through support, through quarterly business reviews. And so like we're typically prioritizing what we hear from customers first. Most of the time, what we're hearing from customers is also what we're hearing with our in-house um, you know, the solar expertise in terms of like everybody on the team is pretty tied into exactly what's going on, what the new technologies are.

46:01In terms of how we go about selecting any sort of partners, um, that is something that is typically most of the partners that we currently work with are also customers, right? So um, you know, we have a pretty good spread within the OEN um section of the uh of the market where they use the product internally in order to help support mutual customers.

46:24And so um, those are the ones that we currently you know think about prioritizing first and mess.

Is AI a friend or foe for solar engineering?

46:29Peter Pongracz: How do you guys view AI from a product or a company's perspective perspective? Is it a friend or a foe?

46:36Douglas Geist: I think it's both. Um I think that it's a friend in that I think that AI will have a use case in this industry one way or another, that's for sure. Where I continue to, you know, um be tied in to conversations with not just in solar, but in just engineering as a whole. When you're talking about infrastructure projects, when you're talking about bridge design, building design, things along those lines, I think there's a certain level of mistrust of what AI will be capable of ultimately doing.

47:15And if I think about like it's systems in the US as an example, you know, in the US to be able to get a project approved, you know, an engineer has to basically put a stamp of approval on it, which is kind of like they're saying that this is a good design, this is a good project, right? And I do think that there is a certain level of I don't know that we're gonna necessarily build this thing just based on what a computer artificial intelligence told us to do, versus you know, having the experience of a person that has been through this process many, many, many times in order to be able to ultimately give the stamp of approval on that.

47:51Um, and so that's an area where I think that there's a balance between friend and foe in this particular space. But I think we're in a very interesting time.

47:59Peter Pongracz: That answer is also uh uh changing every single day, right? So if you if you look at it, what is what the AI is capable of today, yes, you need the final human stamp of approval. With you need it in one year time from today, it's questionable.

48:16Douglas Geist: I think to know whether or not a project, if you think about the training of an LLN, right, then you really need to be able to have the full feedback loop. Here's the way a project was designed, here's the way it was built, here's the full history, here's the way it now operates, and based on that, that feeds back into the design process and tells you how to better design the next project, and that learning process will take a while.

48:45And I don't know that we currently have all of that life cycle currently connected in a way in which you can actually go through that process and train it out so far. Will we have that in a year? I don't know if we'll have that in a year to the point where we'll be able to train an LLM in order to be able to do that to the degree of certainty that you would want in five years, probably.

49:07Peter Pongracz: Actually, we are we are reaching the the end of our time. Is there perhaps any exciting announcement that we can tease about?

49:14Douglas Geist: The next big thing we have coming up, of course, is everybody's favorite solar event of the year, which is intersolar and Mesa Munich. Um, so we'll be there, of course, attending that event. Um, so you know, everyone should feel free to come on by and see us at the booth. Um, we'd love to see everybody there. Um, but in terms of like anything that we currently have in the works for the product, we're working on several initiatives internally at this point, which we'll, you know, be sharing more as they become available um over the next three to six month period of time um in as we lead up into to RE coming in the US.

49:53Peter Pongracz: We are trying to do this uh tradition of the previous guest leaving a question for the follow-up guests. What question would you leave to the next guest?

50:02Douglas Geist: What do you think it will take to get governments to fix their permitting and approval process?

50:12Peter Pongracz: Thank you very much for being here. We finally made this happen.

50:14Douglas Geist: Yeah, thank you very much for having me.

50:16Peter Pongracz: And uh, I guess we will see each other in Munich.

50:19Douglas Geist: I will certainly be there. Stop by the booth, come and check us out. We're uh I believe we're gonna be in booth uh A3180 and A three one seventy-nine. So come check us out.

50:32Peter Pongracz: Definitely.