Editor's note: The following is the transcript of a live interview with Eric Cieslak and James Mason from ABC Supply. You can read the interview below or listen to the podcast.
Heidi J. Ellsworth: Hello, everybody, and welcome to Coffee Conversations. We are very excited to have you here. This is our first episode of season five, and this is a hot topic, no pun intended. This is all about renewable energies and solar. We have the experts from ABC Supply here. So we will get started, but first, a few housekeeping. I would love to say thank you so much to ABC Supply as our sponsor for this Coffee Conversations and for bringing the experts who are going to answer your questions today all about renewable energy. This is being recorded and it will be available within 24 hours. Be sure to share it with your friends and all of your companies out there because this is the kind of topics that really can change business. So let's get started.
Oh, first of all, my name is Heidi Ellsworth. I need to introduce myself, and then I would like to introduce our guest today. First of all, Eric Cieslak with ABC. Eric, welcome to the show.
Eric Cieslak: Thank you for inviting me.
Heidi J. Ellsworth: We love it. Can you please introduce yourself and tell us about what you do at ABC Supply?
Eric Cieslak: My name's Eric Cieslak. I'm the Business Development Manager at ABC Supply. I run the renewable energy side and help ABC Supply branches onboard solar into their branches with education and product.
Heidi J. Ellsworth: Excellent. Awesome. Thank you so much for being here today. I'd also like to introduce James Mason, also with ABC Supply. James, welcome to the show and please introduce yourself.
James Mason: Heidi, thank you. Thank you for having us back. I'm excited to be here this morning to talk.
Heidi J. Ellsworth: This is great.
James Mason: Oh, it is. It's awesome. It's a great day. So hello, everyone. I'm James Mason, Vice President of Renewable Energy for ABC Supply. So just in short, I'm in charge of everything green and sustainable at ABC Supply. I'm glad to be here.
Heidi J. Ellsworth: Excellent, excellent. Thank you so much. Well, James, let's start with what ABC Supply is doing with renewable energies. Can you give us that bigger picture and what you also see just happening in this space overall?
James Mason: Yeah, no, I can definitely do that. So in the market right now, there's a big disruption that's going on between solar and roofing, and now you have this natural convergence. So ABC, being the largest exterior and interior building products distributor in North America, we are converging over to the renewable energy space and we're also now distributing and selling all solar and renewable products. That would be solar panels, racking, inverters, batteries and, soon to come, EV accessories. If you think about it just in its totality, I would probably say, give me a little rope here, 70% to 80% of the solar work is done on the, you got it, roof where we play. So it's just a natural fit for ABC to come into this space and we're going to do what we've always done and that's make it easy for our customers and our contractors to do business in the renewable energy segment.
Heidi J. Ellsworth: It's so important and it's been ... I have to tell you and we've talked about this in the past, but I was at Greenville 30 years ago, maybe not 30, 20 years ago, talking about solar and there's just a lot of questions out there like, is it really going to happen? Is it really taking off? So I love the fact that ABC Supply said, "Hey, let's get questions from the field. Let's get questions from everybody out there and all the contractors and see what they're thinking and what they're interested in."
So that's what we did. For all of you who answered the social media and the questions and the ads, thank you so much. So the questions we have today came from contractors, all like you. So thank you so much for being here. I do want to remind everybody that the chat is open. We want your questions. So please ask questions as we go. We're going to take these questions that came in, but we're also going to be taking your questions, comments, thoughts, all the great things as we talk about the future of roofing, owning renewable energy. I think that's the theme of the day. Roofing needs to own this. So let's start out with James. How has the demand for renewable energy shifted in recent years?
James Mason: Oh, wow, that's such a broad and great question. I think I'm going to go back to one of the statements you made, and it's a very, very valid question. Is it real? Is it going to happen this time? Because when you are innovating and creating, sometimes you have the starts and the stops. So I know solar, I believe maybe 15 to 20 years ago, tried to make an emergence in the roofing space and it didn't quite work. I think the difference this time is a few things.
One, the technology, and the biggest is the timing of the policy behind it, the mandates, the rebates, the incentives. I know we'll get into that, but I'm trying to set the stage of why it's different this time. If you look in the history of our great country and when we've transformed and we've done things, there's a couple of things that need to happen. It's usually a choice is being brought closer to the consumer, and then there's some type of policy or mandate to push it. You saw it in the telecoms where we went from the long distance carrier to the regional carriers, to the wireless carriers, and now we walk around with computers in our pocket so we can call anywhere in the world at any time.
We can even go to the entertainment industry where we went from the beta tapes to the VHS, to the DVDs, to the Blu-Ray, and now we're all streaming online. So you're going to see that, in my opinion, as we move from diesel to the electrification of everything and using the sun to do it. So the timing is what's happening with the policy and the technology and it's the right time and people are receptive.
So you have a lot of panels, you have a lot of inverters, and even now as we're speaking, batteries are becoming a big part of it. So not only can you generate power, you can also restore it now. So think about it. Homes now can generate their own power to sustain themselves. So when you think about it in those terms, it's mind blowing, but it's not this conceptual prototype. It's done. We're doing it. So that's the biggest shift and that's the biggest difference, Heidi. I'm pretty sure Eric probably has some perspectives on what he's seeing and why he's thinking it's changing.
Eric Cieslak: I totally agree with that whole concept because where it was back when I started in 2010 and when I was a roofer getting into solar, it was the Wild, Wild West, man. Nobody knew what they were doing. We didn't have racking. We were just making stuff. I think finally technology is finally getting here, where it's cost efficient, it's not as expensive, it's easier to install. The racking companies are abiding by all the rules on how to waterproof things. The solar guys have more products to deal with, not just these ... When I was using that stuff, it was M215s enphase. It was just really limited on what it could do, but now where we're at and where the tech is and how everyone's getting involved, the whole spectrum is changing. The whole avenue of solar has changed so much that it's going to be the future and we're in the right time to start getting into it and it's pretty exciting.
James Mason: The biggest thing is the government will help you pay for it. That's when you know, right? Sometimes things have to be subsidized so they can grow and evolve, but that's one of the most exciting things and that's the change. You've got some help.
Heidi J. Ellsworth: I love how you said when it all comes together, and I really do think that is exactly what has happened in that all of these different forces finally have found ... We started, we stopped, we started, we stopped over the last couple decades, but now everything's coming together at one point. So let's talk about the contractors because this is a whole shift. When you are installing solar as part of your business, how are you interacting with the solar installers? How's all this going? So Eric, what are some of the primary benefits of installing solar panels for contractors? Because I think there's some cynicism out there like, "Is this really happening?" and then the bigger question, "How can I be involved?"
Eric Cieslak: Are you referencing mainly to the roofing contractors or just contractors in general?
Heidi J. Ellsworth: Let's try the roofing contractors first.
Eric Cieslak: In regards to my personal experience as a roofing contractor when I started in the industry, it was so foreign. What I was experiencing was I was getting on the roof and then I'd get off the roof and a solar company would come on my roof and then I'd be like, "Okay, there goes my warranty on my roof. What did they do?" There was this bitter feud between us and we just didn't know what they were doing when I was off of it. So when I got into it and I started getting involved with solar contractors and then learning and learning how to install it, it was just another addition to my portfolio of what I was selling because when I was a roofing contractor, not only did I specialize in metal roofing, but I also did stucco, I did siding, and I did windows, and I did gutters.
So I was like, "Well, this is just another thing I'm adding onto it, so I just need to learn how to waterproof." So the understanding the concept of what to do to waterproof on a roof as a roofer is very relative to what the solar contractors are doing when they're doing the roof attachments and adding the solar panels. It was not overwhelming or difficult. So then I figured, "Okay. It's got to be really hard to sell this stuff because it's so technical," but then after some training and sitting down with some people and some education and having a little sales program platform to go through to manipulate the numbers to see how to sell it, I started to realize it was a lot easier selling this than was selling roofing because roofing is just dull and everyone pays out of pocket. With solar, it's financing. You can get something that's really cool and you knew there was going to be more tech to it.
I've realized very quickly that those two, they integrated so well together and they were so easy to sell together, and just getting the right people in place to run the business, it was a no brainer. I was very successful. My close rates were incredible when I was selling roofing and solar together.
James Mason: If I could jump in, you'd be surprised if you think about, since you said we're going to start with roofing contractors, think about the evolution of how roofing contractors, we went from EPDM to built up, built up roofing to single ply, single ply to coatings, and so on and so on. So if you really think about it at its granular level, it's actually almost what roofers do, right? We evolve, we change, and we move. So you're right, there's some skepticism and some cynicism and it's warranted. It should be. Anytime that something new, something that you may not be comfortable with, the uncertainty of it, but if you just think about what I just said, how about 50 to 60 years ago, EPDM, and then when you said built up, "What are you talking about? We do this," but you evolve and it's just right in line with what ABC does.
We partner with the best manufacturing partners. We provide the training for our customer base. Then we move them along. We help them sell the product. We help them grow the business. So it's just that natural progression for roofing contractors. If you think about it in those terms and as you start to learn and to grow and to evolve, then, of course, the skepticism and the cynicism dissipates.
Now, I'm not saying there's not going to be problems. There's going to be growing pains. If you remember the first time you did your single ply job for the first wasn't the best, but guess what? You got better, then you got certified and you became an expert, and that's what you saw in the industry, and you're going to see the same as more roofers understand that and they start to move their business into that. So Eric said, it's for the first time, roofing is sexy. This is technology and what we do all at once, you tell somebody, "I'm in roofing," people go, "Okay," but you say, "Yeah, I'm doing roofing and I'm doing solar," that technology, it's the hot. You become that it person. People want to talk to you.
Heidi J. Ellsworth: It's a differentiator for your business.
James Mason: So think about what that can do for your business.
Heidi J. Ellsworth: Well, and speaking of that, I want to get to Rob's question. Rob, thank you for being on here out of Florida. He asked, "Please explain Inflation Reduction Act tax credits," because you brought up the government before. I know this is a big question.
James Mason: Yeah, it is.
Heidi J. Ellsworth: So James, you want to start?
James Mason: Yeah, I will. Rob, thanks for the question out in Florida. All right. So listen, everybody's heard of the Inflation Reduction Act. It was passed by this administration, and its just most simplest form, it's a 30% federal tax credit. So that means everybody. If you live in the US, you fall under the federal, that 30% tax credit applies to you. So I do want to say this. You already know where I'm going, Heidi. The disclaimer, please check with your tax professional because it is tax loss.
So a lot of people believe, "Oh, I'm going to get a 30," or, "I'm going to get a rebate check from the government." It does not work that way. It is a tax credit. So what that means, just in its simplest form, is you get 30% that you get to deduct over five years against a tax liability that you have. So let's just say you owe X amount in taxes. You'll be able to reduce 30% of your total solar costs against that tax liability. So that's what it means.
There's a lot of people run out thinking, "Oh, I'm going to get a check," and when it doesn't show, they're a little disappointed. No, you have to file your taxes, go to your tax professional, make sure you're using all the right codes for your municipality, and you can't offset it. So it's a deduction over five years how you file tax. So that just at the highest level is what the federal tax credit. It's been extended for 10 years, so that's going to add some stability. So I believe it's around until 2032, Eric? Is that about 2030-2032?
Eric Cieslak: It's supposed to be 2030-2032. I remember that was the cutoff.
James Mason: Yeah, something in there. Give us a little rope guys and ladies and gentlemen. You can go research that, but it's out there for the next decade or so to add stability. So that's going to be there for everybody, and that's not to be confused with your state incentives and rebates. Two different things, federal and state. So different states are doing different things and you can combine them. So everybody gets the federal 30% tax credit, but check with your state. You can go to whatever your state is, you can go to Google and do your state.gov and it'll pop up for your state and you can find out all the incentives and all the rebates in your state, and you can combine that with that federal package and it can be very, very helpful.
In some states, it can almost offset 80% to 90% of the total cost if you take into effect that 30% tax credit that you get, plus any of the rebates and incentives. Some states are actually given back rebates checks and some are given stiff incentives, but once again, you have to check particularly what's in your state.
Heidi J. Ellsworth: Is there a difference between commercial and residential on the federal level?
Eric Cieslak: Commercial and residential are going to be entirely different. The residential, it has the Tax Reduction Act. They have that, but in the commercial form, it's a whole different game. You definitely want to get with a CPA on that one because there's a lot more taxes and different things that they're applied to to that.
Heidi J. Ellsworth: Because we do have a lot of both commercial and residential contractors on here today, so that's why I want to make sure everybody's checking with their folks.
James Mason: To Eric's point, the commercial is more of a specialization even on how we do roofing. Basic residential roof is nothing like a commercial roof that has a tapered system with a ... It's a different ballgame altogether. On the commercial side, think about it, Heidi. It's a little different because if you're putting solar on your commercial, that's not power that you're using for your personal use. That's usually for business and it's going to be big and it's generating a little bit more. As a business, there's things that you can sell back to the grid and do different things just because it's a different system altogether.
A solar commercial system is just like the difference between a residential roof and a commercial roof. They do do different things. So the tax laws are going to apply different between your personal tax and then a business tax. If you think about it, a corporate and a personal person, it's different. Does that make sense?
Heidi J. Ellsworth: Oh, yeah. Yeah, yeah, yeah, but there is incentives out there across the board.
Eric Cieslak: Oh, yeah.
James Mason: Yes, there's so many incentives on the commercial.
Eric Cieslak: There's agricultural incentives for commercial for solars.
James Mason: We would have to do another show to really just go over everything and we would probably need to even segment it out. To Eric's point, agricultural, manufacturing, this that. Are you storing it? How much can you produce? Just the system sizes are a lot different, so you just have to know. So on the commercial side, you definitely want to do your due diligence and do the research so that you can get all of the incentives and the rebates because the deductions are totally different. It's not like deducting for your personal. This is like you're following your corporate. So it's a different entity altogether, but very, very, very lucrative and very cost-effective because you're just generating a lot more power than you're going to use and more people, and that area will benefit from it as well.
Heidi J. Ellsworth: I would recommend to everybody out there, if you haven't watched the Coffee Conversations from last year with Prologis and Johns Manville, they talk a lot about the commercial solar world too and what the building owners and property managers are doing. So we have a lot of information out there, but I just wanted to make sure for anybody out there to do it. We just had Leanne. Hello, Leanne. She's with ATAS International in Allentown, Pennsylvania. I know Leanne very well. Thank you for being here. She said, "We are the manufacturers of solar-ready standing seam metal roofing, as well as solar thermal air heating metal wall panel systems." Then she put in a link in there for incentives that they've been finding, which is dsireusa.org. So check the chat, it's in there.
This is really what I think it's about. It's the community, the roofing community all coming together, sharing this knowledge, working through it like you two are doing, and it just does make a big difference. So please keep asking and making comments in the chat. Let us know where you're from, who you are. This is a conversation. It's Coffee Conversation, but let's go on to another question that we had come in from contractors earlier and that was, "Are there common misconceptions regarding renewable energy solar panels?" So Eric, let's start with you. What are some of those misconceptions?
Eric Cieslak: On the solar panels specifically?
Heidi J. Ellsworth: Yeah.
Eric Cieslak: I think my favorite answer to this is ... James, actually, I heard him say this. Everyone's concerned that the panels are not going to last as long, they're not good products, there are degradation on them, et cetera, et cetera. One of the things he's enlightened and I love it because he says, "Okay. You know the satellites are in the sky, in the universe flying around? Those are on solar panels and they've been going a lot longer than I've been alive and they're still working fine."
Heidi J. Ellsworth: There you go.
Eric Cieslak: So that is a funny analogy to it, but it's really true because where the panels are, and if we do simple facts on data, you got a solar panel and it has a degradation of 8% or 6%, let's just go round to 10% after 25 years. So if I install a solar panel on my roof and it degradates in 25 years 10%, still leaving 90% of the panel efficiency to utilize the sun. If you're going to go and follow that trace, that percentage that it's dropping at 10% in 25 years and just do another 25 years, just round it, say it just gets an even line and you're going to look at 20% at 50 years. Granted, it's probably going to degrade a little bit quicker, but it's going to be half productive.
So when you're sizing a system, you're doing an oversize on the system, and that's what most people do to get their incentives, get their money back, and to offset the highs and lows of the cloud cover and anything like snow or rain. So they're doing a little overproduction, and when they do that, that in turn offsets the system. So if you have a degradation that's happening at 25 years or 50 years, you're having that offset, you're still above over production or you're probably even matching production or right underneath it. So the concept is the panels won't last as long, no.
I think the other thing that I think that's most important is the batteries. When I was installing batteries, we were doing car batteries and connecting wires to them and doing 30 of them, and they only lasted five years and they're all lead to acid batteries. The battery technology now is expanding and they're changing the chemistries, which I think is the most important part of everyone to understand what the difference between this chemistry and that chemistry. For example, NMC versus LFP, I think those are things that people all should understand and know because that's where we're talking about the tortoise and the hare. You can get something to go really fast, really quick out of the gates and last only eight years or less or you got something that's like the tortoise. It's going to get to the end of the line, but it's going to give you the energy and it's going to last for many, many years and it's fully recyclable. So I think that education part and learning is the most important part in getting the facts. I think that is truly the most important part about solar.
James Mason: Absolutely. Eric hit the nail on the head. It's the education, and to your point, Heidi, there's some cynicism, some skepticism out there, and some of it is valid and warranted and some of it is just a lack of not understanding how it works. I was just laughing when Eric was mentioning the story. He was being nice. He didn't say what I really said. I said one day, I don't know where we were, I don't know if we were ... I'm not going to call the person a heckler, but they just kept going about it's not real, and I think I said, "Yeah, well, listen. This technology, solar technology has been around since ... It's older than me. So these satellites have been up there," and I told him, "Well, a satellite hasn't fallen out the sky yet and it's still transferring data back to NASA. The great minds work there. If we're still putting it on our space shuttles and we're still putting it on satellites that we're launching now, I think that that technology is proven."
I can get even more granular. You talked about Eric who installed solar like 10, 15 years ago. He can still go to those homes and those panels are still working. As technology's gotten better, like you said, degradation has put in, but they're still producing and they still work.
I think another misconception that I think we'd like to touch on is just safety. Some people don't think that it's safe. They see stories in the news of something that happen or it's something caught on fire or it just didn't work. I would say just in anything, I'm going to have a lot of good and a lot of bad, a lot of growing pains, but sometimes when you look into those stories, you find out it wasn't the technology, it was installer error. Somebody did something that they weren't supposed to do. They maybe put an inverter that was clipping or could not handle the power of that panel or they didn't wire it. There's those type of errors that you have to account for, but that doesn't discount that the technology is not real and it doesn't work.
Like we talked about, Heidi, it's not hocus pocus, it's not magic. It's pretty simple. If you remember your biology lesson of photosynthesis, plants are a very, very good business case. They've been using the sun to grow and take care of themselves since creation. So when you think about it at that granular level, I think you can look up and see the sun, and I think you can realize that it has the ability to produce power just like you can run water through a dam and produce power.
So I think at its core, a lot of people know that it's not hocus pocus and it is real. It's just connecting the dots, but that's what we're here to do too is help connect dots. If you really do want to know, Eric, last at this line, just get on this thing called Google. I don't know. It's a platform that's out there and just solar 101 and just figure out how it works and it will help you see, and if that still doesn't, just go and see some systems live and you'll understand how it works. Sun hits the roof, I'm going to really, really get simple, converts, goes in, empowers things. It's pretty simple.
Heidi J. Ellsworth: Well, I think that really leads us to our next question, which is perfect because let's talk about the products that are out there and that are being offered now. I think there's a lot of questions between solar panels, integrated solar systems, different upgrades, how it's all working. So let's walk through that. Again, the chat is open. If you have questions on, "Should I use a panel? Should I use a shingle?" we're going to talk about that now, and this is something if you have questions at, bring them on. So I'm going to say, James, let's start with what are you seeing with the products out there that these roofing contractors should be looking at to think about for their business for installation.
James Mason: Okay. Cool, and I know Eric will jump in. He is my resident expert with that, but me and him see it the same way. So as ABC came into the business, there's a lot of noise out there, Heidi, right? That's just in anything that you do, but you have to know what you value, what you're about, and that's how you build your business. For ABC, it's about our core values, respect, opportunity, American pride, family, taking care of our contractors. Biggest thing, make it easy.
So when we were looking for vendor partners for our solar panels, one, we want to make sure people that have been around a while. We do our due diligence. Their companies are large. They have the infrastructure to support. They have all their UL ratings. They have all their testings. Sometimes it's not always about the cheapest price. We're more of the long term. We're of the value. I'm not saying you can't be competitive, but sometimes you do get what you pay for. So you got to watch that.
So on the solar panels, I will say this and I'll stop and let Eric jump in and then we'll move on, but a lot of the solar panels, there's really, really good panel manufacturers out there. Also, there's a lot of, which I'm excited about, US-based manufacturing panels that are here and we partner with them as well creating jobs for Americans. It's exciting to watch. So if you stick with brands that have been around, brands that care, that think like you do, you care about your business, just not looking for the short-term sell but a long-term partnership, I think you're going to be okay.
You can always go on to abcsupply.com, look at our renewable energy products, look at our portfolio. Everybody has their right to their opinion. We do use data, and I would say out of the top five panel manufacturer that have the most share in the US, out of the top five, we have three of them. Now, we have total eight brands, but we have three of the top five. So if you think of the good, better, best, we have you covered, but all the panels for the most part are pretty good out there.
Heidi J. Ellsworth: Eric, talk about that, about the panels, and then also let's talk about the shingles, the integrated shingles.
Eric Cieslak: I think the integrated shingles for a roofer, I've actually installed some of the integrating shingles. I tested it. It's very, very, very similar to doing a comp roof or an asphalt shingle roof. When laying, the idea, the design into it and how it integrates, it's right up the alley of any roofer. It's nothing that it would be very difficult to understand. It's a lot of plug and play. It's a string inverter system. I think it's going to be the future. It's definitely something that is going to be pretty popular, but we also have to take in consideration that the solar panel itself is still used primarily across the United States, across the world.
So is it there yet? I don't know. Is it something that's going to be the future? I think it definitely is something to take in consideration and keep our eyes open for it. I'm excited because every time I turn the corner, there's always something new and it's really cool to see it, understand it, read it. I'm excited to go to the solar show that's in Vegas because I want to see that because there's going to be so many products coming out and so much more stuff. The greatest things with our vendor partners, they're all vertically integrating their companies in the sense of getting an ecosystem of their business. So they're building a solar panel and maybe they're getting into an inverter, they're getting into a battery. So everyone's expanding their avenues and it's really, really neat to watch.
So to me, I think long as you know the facts and what you want to do, if it does what you want, is it producing enough energy that you need for your house, do you need to store. So one of the things I always talk about is you got two types of solar systems. You got, "I just need to get power just to my house. My electric bill's not that extreme. I just want it right now and it's not a big deal." Do you need it to be battery ready? Do you need it to be off grid setup? Are you too far away to do an electrical pole in your neighborhood in your off grid setting? So do you need a full off grid system?" The concept in the solar world is that doesn't exist yet, but with all the companies that are coming out, all the technology that's coming out, it's getting into the system.
There is products out there that are capable of doing off grid setups and you just got to research and look into it. It's exciting. I think that the products are all getting very, very ... They're getting more and more competitive and they're all coming together, starting to line up. The panels are all turning into the same quality. The degradation is all turning in the same. The efficiency is getting better and better and better. So it is the perfect time to get into it. This is not the first cellphone on the market. This is now version 15. So really, I'm excited. Solar to me is the most exciting. I'm very techie. I nerd out on this stuff. So I'm really excited.
Heidi J. Ellsworth: Well, and when you look at ... Since we were talking about the integrated solar systems, I just want to mention, and if I leave ... I'm not going to leave people out, so don't ... Some of the ones we're looking at right now or seeing in the market are Tesla, JAF, CertainTeed are all in this space of bringing out these integrated solar systems, but one of the things we talked about yesterday as we were talking about is that we're starting to see this in windows, on siding, across the building envelope because, obviously, that is a great place to capture sunlight. Eric, I'm going to go back to you. You said you're going to go to the solar show, you're geeking out, but what are some of these things that really are going to shift this market in the next decade that contractors should be aware of?
Eric Cieslak: They're coming out with the site profile. Buildings are come and capture solar. They're looking at carports. You're looking at commercial buildings doing EV stations and making residual income from it. There is so much that they're focusing on and changing the whole building envelope to catch solar and be self-efficient. Everyone in the solar industry, if you're on this, just call right here on the solar industry, we know our infrastructure is not capable of what the population, all the EV vehicles coming on, everything on the demands, the AC demands, fires are happening. If you look at everything, our infrastructure is just not going to be able to handle all the demands off of it.
So integrating solar into commercial building space, the residential space, the agricultural space to relieve the energy grid is going to be imperative and it is the best way to handle something. Instead of rebuilding an infrastructure, it's going to cost trillions of dollars, it makes sense to bring in solar and somehow integrate it to the energy grid system. That is going to be the future. People are going to start to become their own solar plant to help their neighbor. They're going to be able to transfer energy amongst each other. This is long-term thinking, but I know it's around the corner. I think that we need to take that all in consideration. It's going to be in the next 10 years. The technology that's going to come out is going to be mind-blowing.
Heidi J. Ellsworth: Yeah. Well, go ahead, James.
James Mason: I don't know. I would agree with Eric, and it's actually happening now. It's being built in front of our very eyes. Just I'll just zoom out a little bit just the way that we produce, transmit, and store electricity. It's what's really changing, the bilateral direction of it. Like Eric talked about and you just from your windows to your siding, actually to your car, think about just the entire home ecosystem, vehicle to grid, vehicle to home. There's batteries in those EVs. Bilateral, I can pull energy out of my home, I can put energy into my home.
So when you think about it in those terms, and if you're familiar with Moore's Law, competing every 18 months, that's why it's moving so fast and you hit it before, Heidi, there's a lot of things that are happening right now even though, I guess the best analogy, we're building the plane and flying it at the same time, but once we do get there, and I know it's hard to see, that's why I like to use analogies, but just remember, hold up your phone. Think about the old flip phone that you used to have that was analog, the little antenna that you pulled up, and that was before we even had the brick phone in the cars, and just how quickly that's moved to what we have in front of us today. Same kind of concept. It's going to move that fast because the technology is moving that fast.
So there's products that are coming that we haven't even thought about that we're talking. I'll give you an example of one. I can't mention the name, but I have seen the concept, but just think about solar water heaters and people are like, "Solar water heater, James?" Yeah, think about it. If you look at your electricity bill, 30% of that is usually heating the water in your home with gas. It's very intensive and you can switch to an electric, but there are products coming out, and I've seen the prototype.
T about if you have solar panels on your home already. Sorry, I hit my light. Let's just say you have one or two panels just to the offsite of where you have your array and it's just a straight DC, the threat current straight to your water heater that converts it, and the sun is heating your water now outside of using electricity for your home. Now, you're talking about the concepts of everybody can take a shower at the same time, you'll never run out of hot water. You can be at camping sites or remote and still have access to hot water because you're powering it from the sun. So those are the types of things that you're going to be wrapping your mind around.
That's why we call it a disruption because it's changing the way that we power. That's why the electrification of America, it is going to happen in different facets and it's just going to encompass everything that we do. That doesn't mean that gas and diesel and bad is going to go away, but I think it's just going to be more of a balanced portfolio. Just think in terms of balance.
Heidi J. Ellsworth: You're just making me think of so many different things because it's much like what COVID did for Zoom, and that is what the power grid is doing for solar right now. Our power grid cannot fail. So the regulations, the power grid, everything's coming together just like it did for online meetings to make a change.
James Mason: It did. It's amazing. There was an article. I know we talked about where we were bracing for a lot of brownouts and blackouts, and it didn't quite happen that way. We got lucky with some things, but a big part of it is we've produced enough renewable energy where in certain areas we were able to offset some of those peak demands. If we wouldn't have done this, if the US wouldn't have gotten involved right around that 2017 mark, we call that not because that's when we came in, but we believe that the mandate came in out in California. I just wanted to clarify. It wasn't because we came, but it became a little more prevalent, but as it's ramped, you can start to see some of the fruit. We're not growing trees, but you can go pick a few berries and make a little fruit tart or something, but you can start to see the benefits. Even though we have a lot of challenges and obstacles and roadblocks ahead of us and growing pains, you can already see the benefits that if we wouldn't have had that additional capacity, we could have been in a world of hurt. So I'm just excited to see how much more we can produce, how more efficient we can be, what we can learn from that and to do better.
Heidi J. Ellsworth: There is a definite business case here. So for roofing contractors, roofing companies out there, there is a business case to add solar. We see the demand coming. We're on the front edge of the curve, but I think there's still so many questions. So I want to move on to how, how do contractors, how do roofing companies incorporate this? So I want to start with a question of materials information, but I also wanted to talk about electricians. So for how long have we had this conversation, who owns the roof with solar, electricians or roofers? So of course, we want roofers to own it, but electricians are very important in that thing. So Eric, talk about that relationship and how important it is as contractors bring solar into their business that they start developing relationships that will help them do this in a good way, in a productive, profitable way.
Eric Cieslak: Well, I think most roofers will know this. When you start into roofing, there is not a college course that says, "Hey, come here to learn how to do roofing." When I got into roofing, I got on the roof, I tore it off, I swept, I watch skies install. It is trial by error. You get on there, you work with the crews, it's all taught while you're there. Now, an electrician, they work from the ground, they work with breaker boxes. They do that from the ground. They actually take college courses to do it or a trade school to get into electrical.
So when I talk to solar companies and I talk to roofing companies, I say the big difference between both of you is one can learn at a school, another one learns in the trade, and that's where it's very difficult. I know you can do a lot of training courses in college for majority, and it wouldn't be college, it'd be more trade school for the college course and for the electrical, but when you want to be a master electrician, you have to go to school, you have to learn. There's a lot of things. People can get really hurt, but in this industry, when I say the roofers own that sector, it's because a lot of the solar companies are trying to get into that sector. They have to find people. There's not a training course for it. They have to find people that actually experienced and learned how to do it and build within.
I think the transition's a little bit easier for a roofer to get in that sector because majority of the time where the solar is placed is placed on the roof and majority of problems that happen are there on the roof with leaks. Now, a professional roofer that's been in the trade for a long period of time can do all those applications and be involved in it and then either partner with somebody or sub out to somebody that actually does the electrical work that can sign off on it and be a part of this. So that merger, that convergence of both companies coming together or both trades coming together is going to be important, but I really truly believe that the rooftop is the roofers industry and that the roofers should be involved in that section of work because they're the pros on waterproofing.
Heidi J. Ellsworth: I know that we have roofing companies out there who have actually hired certified electricians, but then also build those relationships. Just real quick, I'm going to say one thing. Yes, Sherry Miles, she has done so much work and the lines has too on starting to get classes for roofing into trade schools, Eric.
Eric Cieslak: Oh, really?
Heidi J. Ellsworth: Yeah, that's changing and that's also important, but bringing these two together, James, go ahead.
James Mason: Yeah, no, I was just jumping in. I saw that comment too. That's exciting that they're doing that, but also a big difference between the two trades of the electrician and the roofer. Once again, there are some outlier situations out there for everybody we're talking to, but I'm just talking about non-anecdotal, but just in the general capacity of it. Once again, check with your state because different state laws require different things. So I want you to always be in compliance with the law, but a lot of the electrical work, like Eric's point, it's not done on the roof. It's done on the side of the house when you're going into the breaker box. So there's very few electricians. I'm not saying there aren't any, but most of them don't.
We could have probably answered this, the misconception. Unlike when Eric was doing 15 years ago on illegally wiring things, we laugh about it on the roof because that was 15 years ago. It's pretty plug and play. You're not wiring anything. You're plugging and playing and there's little clips that you put, and it goes against the racking and the railing. So there's really not a lot of wiring going on on the roof. So I definitely believe the roofer owns that, but you do need to have that partnership if you don't have it. So you can be in compliance with your municipality, and then when you're going into the breaker box, that's probably when the electrician's going to come in.
I look at it this way and people make, "Oh, but I'm not this ..." Okay, it's no different than what we've been doing since the time of Jesus. You've got carpenter's that frame and do all that. You've got the roofers who come in and put the roof on. You've got the plumbers who do the plumbing. You have the electric ... We all work together in this ecosystem of construction. So you don't have to do it alone. You can if that's what you choose to do, but it's no different than what we do now. You network, you partner with people, and there's enough for everyone.
I've seen it go multiple ways. I've seen people bringing it in-house. I've seen people subbing it out. I've seen people having joint ventures. So there's multiple paths to getting it done, but you don't have to think of this daunting task, "Because I don't have this, I can't start." You probably want to hit that reset button and really think about that.
Heidi J. Ellsworth: That's so true. I love some of the comments. So I was just at the Virginia show, which was great. The contractors there are amazing, Sherry's. They are lobbying in their state their state legislators to write legislation saying that rooftop solar contractors must be a licensed roofing contractor. I love that. Now, all of a sudden everything's coming together. I know Sherry's very involved with the NRCA and with the advocacy. So this was something we'll track because this is state by state, and Leanne had a lot of the same questions. She said, "I believe that new homes and commercial buildings that are built in California are now required to have a solar array. Are you hearing of other states moving toward the same type of mandate?"
James Mason: Yeah, that mandate was a part of Title 24 out in Southern California. Title 24 started as more of a solar reflex index type of mandate where we were just trying to cool the roofs back in the day. So whether we were putting more insulation in attics. Then it morphed into the products. We started to produce cool type shingles. Then they added subsection six where they said, "Okay, you need to have some type of photovoltaic system for new to construction of buildings two or more," and then I believe in 2030, Eric, probably correct me, I think it's all buildings will require some type of PV. Give me a little rope on that one because it keeps going back and forth. Is that still-
Eric Cieslak: It was Title 24. I remember when I was selling solar, it was a big thing because they were mandating in 2019 I think is when all new construction has to have solar. Then they were saying for the residential market that if you wanted to sell your house, you had to have three forms of high efficiency Title 24 compliance. So it could be new windows, it could be new roofing that was Title 24 or you could sum it all up and do PV. Then I heard eventually by 2050, this is way out long ways, if you ever want to sell your house in California, I would say specifically maybe there, that you have to have solar on an order to sell it, and that was one of the stipulations. Now, is that trickling across the United States? More and more we're starting to see some things are starting to go that direction, especially with an M3 coming on peak hour times. That's going to change a lot of things for a lot of people.
Heidi J. Ellsworth: Any states in particular that you're hearing are looking at this?
James Mason: Oh, man, there were ... So give me a little rope, everybody, here. I'm trying to remember the names in my head. There were about seven states. So once again, please don't hold me to it. I believe Massachusetts was one. I believe ... I always get confused between New York and New Jersey. I don't want to offend anyone. I know they're two different states, but they were over in that way. I believe Colorado, possibly. I think it was possibly Nevada. So I don't want to start throwing names out there, but there were a couple of states that were in line and watching how it goes, but what we're seeing out in the market is, mandate or not, there's in different demographics, people are doing it for different reasons like Texas. If we use that for an example, Texas has a lot of oil and gas, but they're also, well, depending, they usually go between two or three behind California as the largest solar market not because cost of energy is cheap there. That Texas freeze changed a lot of people's minds when the grid went down and people wanted energy independence.
So there's various paths and various reasons why people are going to do those things. So the mandate helps, but even without the mandate, there are so many incentives. So we talked about the stick and the carrot. So people are doing it for different reasons, but I do believe there'll probably be a few states that will follow California and mandate it, but most of them may not have to because people are doing it for various reasons. They want to help the environment. They want energy independence. Some of them where your utility rates are triple the national average, well, it makes sense, right? If I can offset my bill and the government's going to give me 30% plus the state's going to give me whatever, well, the economics make sense. So there's just a whole portfolio of reasons of why people are getting into solar and it's exciting.
Heidi J. Ellsworth: It is exciting, and there is just so much going on. So we have a couple questions here on resources. So I'm just pulling up our PowerPoint again and just talking about what materials do you have that can assist roofing contractors in educating their customers. So what types of things, and I am going to put two questions together here because also in that same vein, what resources are there and then what are some of the challenges that contractors are facing in selling and installing renewable energy? Eric, let's start with you.
Eric Cieslak: Well, definitely selling and installing solar, and just from my personal experience, when we got into it, we hired an electrician that partnered up into our company. So it was a part of our company was an RMO, and that was mandatory. In most states, I'm going to say almost all of them, but majority of them, there are some states out there that don't require certain things, but majority of them are going to require that you have a license in electrical. You're going to have to show years of experience in the electrical field in order even to get financing because financing and the tax credit are going to be your go-tos for this.
If you're going to get into solar, yes, the incentive for the Reduction Act is going to be your incentive to sell to a homeowner, and that in turn, the ROI, the return of investment is going to be ideal because it could offset the cost of a roof with the solar system. So in turn, it's a benefit if you finance it, but in order to get the financing, then the difficult part is you have to be a licensed electrician. You have to verify that you're in that field or you have to have somebody that has partnered with you in that business to be that verification. Some of these finance companies require three years of experience.
So there is some difficult things going on. I know that there's states that they're talking to legislation to cut some slack to roofers saying, "Hey, listen, they need to get into this trade. Cut them some slack. Don't give them the three-year mandate if they were capable to partner with somebody that can sub it out to." So I know they're trying to work ways around it, and I think the education part, that is very important to understand no matter where you're at. Granted, the 30% is the huge initiative that's going to help sell any solar system, getting the technology to help you sell it, to understand how to size of solar system. So get together with the vendor partners.
I think the ones that we brought on board that we work with or they're here to work with you, and I think just if you think as of being as a roofer, I used to buy from ABC Supply. I would have the vendors come meet up at my office and I'd sit down and do training sessions. I did single ply training sessions. I did how to roof scope, eagle view. I did all these things to learn how to do a roofing system. Well, the vendor partners that we brought on board are doing the exact same thing. So getting together with those manufacturer reps is imperative to understand the lows and highs of this industry, to know how to install it, what products recommended.
You got to know the hurdles. The financing part's going to be the big part. The sales platform, that's going to be another big thing competing against companies are out there using iPads and sitting down with homeowners and saying, "Look, this is going to cost you nothing. This is free." Nothing's free. Everything costs you something. So be able to talk and explain the roof system to somebody and the solar system and give the facts to me, I think, is the most important part because the homeowners are becoming educated. They're getting smarter, they're doing Google, they're researching, and you to provide the facts and show everyone how a system is done, how to size.
That was one of the big things I did is like, "This is how you size your system. Grab your electrical." I did everything with a notepad and a pen, and I wrote everything down and I showed them, "This is how I figured out how many panels are going to be on the roof, and this is the proper location to do your panels," but I did everything also to law here in California. I had an electrician. So I think those are the hurdles. It's just is the financing part, the sales program, and a licensed electrician to work with you so you're doing everything, and then follow the laws of the state. Those are the most difficult parts of getting into this industry.
Heidi J. Ellsworth: James, because I want to come back to you for this final thought, there are less than reputable companies out there. So to me, when you're getting into a new space like this in solar, you really need to depend on the relationships in the roofing industry who have done so much vetting, has already looked at it. So I think that working with ABC Supply who you've vetted a lot of these helps. So what kind of resources? Talk about that in our last couple minutes, but talk about that, the resources they have and the research that you too have and the company overall has already done to make sure that these are really strong, good vendors and manufacturers.
James Mason: Yeah, no, Heidi, you're right. There are a lot of good actors out there, but there are some bad actors out there, and you talked a little bit about it, and we could probably segment that out too. I think very few of them are maliciously out there doing things and there's some more just they're misinformed about some things. They're just doing things or repeating things that they've heard or what they thought because they didn't do their due diligence because that's one of the main reasons why ABC came in this space, to make it easy for you to do business. That's our job. That's why we've done that due diligence.
So the vendor partners that we have, we have verified. They're big. They have the infrastructure. They're solvent. They stand by their product. They want help train. They want to help partner. So it's everything and all the things that ABC has done with our roofers in the past, helping you get from EPDM to built up, built up to single ply, single ply to ... It's the exact same ... We didn't do it alone. We did it together. It took the contractor, it took a vendor partner or a manufacturer that cared and a distributor, and it's the same thing. Together, you can do it. It's scary, yes. It's new, but it's happening.
So what I would encourage everybody out there is be a part of the change. Even if you're skeptical, even if there's a little bit of cynicism out there, you'd rather be safe than sorry. Move along with it and you'll be okay. You want to be the person that gets out in front of it, and not everybody's going to be that person, so at least move with it. What I'm going to ask is don't be the last person that fights the change because it's still going to happen, and most likely it's going to happen without you, and you don't want to be in that situation.
I would say if you think about it in the concept of a crawl, walk, run, you don't have to do it overnight, especially if you are a roofer. I'm not alienating solar contractors as they're great too, but roofers are the fundamental. It's on the roof. So you need to have that foundational piece. If we're just being honest, there's more roofing contractors than there are solar contractors because roofing has been around a lot longer, but you have to remember, roofers 25 years ago, that was solar. So we've been there so we know where it's going to go, but it's going to converge, it's going to happen, and I just think roofers are in a good position to take advantage of this opportunity because it is an opportunity right now.
You have the Rolodex of business that you've done for people. If you go back, you've been doing roofs for some of your accounts for over 10 to 15 years, if you go and learn and educate yourself the right way, you go back to the same person you're doing the roof for and you go, "Hey, it's time for your roofing inspection. Hey, have you thought about putting solar? Here is this ..." They're going to trust you. You've been doing business with them, and then they don't have to worry about bad actors because they trust you. They're your customer, and now you're just bringing them a service that can help.
So if you want to learn how to do that, I would say go to your local ABC and ask. We're growing this and we're doing it together. Not every branch is in solar at this point, but some are getting there, but they can at least tell you what branch in your area can help you with solar and we can get you started on helping you on that journey. Once again, it takes all of us to do it. You have to be committed to learning, to investing in your business. We'll be the conduit to help set up all the relationships and hold your hand and help you do it. Crawl, walk, run, and then eventually you will get to that point where you will be proficient and you'll be a part of it, and you'll keep it as an opportunity. What you don't want it is become a threat. You want it to be an opportunity-
Heidi J. Ellsworth: To come together.
James Mason: Shut up, yeah.
Heidi J. Ellsworth: No, no, don't shut up.
James Mason: Be Netflix, don't be Blockbuster out there for you. Don't be Blockbuster. Blockbuster didn't believe it was happening, and when they finally did, it was too late. So once again, take advantage of the opportunity before it becomes a threat.
Heidi J. Ellsworth: Exactly. Exactly. James, thank you. Eric, thank you. Great information. Scott, I just saw your comments. Thank you so much. I agree. Cheers to ABC for the renewable division. Thank you for being here today, and thank you, ABC, for being the sponsor of this Coffee Conversations. Look at this awesome panel. We are going to be talking about IRE, learn what's happening, all the great stuff that's going on, plus a state of the industry from NRCA, what's all happening there and how that will be displayed at IRE. So join us next week. This is season five. Thank you for being here, and we will see you next week.
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