Episode 52 and the first ‘Just Another Solar Podcast’ for 2024, delves into the potential of battery cell price reductions, arresting electric vehicle fires and Queensland’s complex metering arrangements towards the electrification shift. However, more relevant to PSW’s Western Australian customer base and broader solar business owners is the dive into the mindset of Derek McKercher, PSW Energy and Perth Solar Warehouse Director, shedding light on what’s on the horizon for solar energy and the businesses riding what is widely considered the ‘solar coaster’.
Contents
Key points
- Podcast links to 'Just Another Solar Podcast' episode 52
- Foundations for a solar business in 2024
- Where business operators should seek inspiration
- Finding balance with business
Stream: Over the Horizon
Extended streaming links:
We get it. You’re a reader rather than a listener. For those who love to nestle in with a great read, we’ve transcribed Episode 52 of Just Another Solar Podcast: Over the Horizon with Derek McKercher. There’s a lot covered, so if time isn’t quite on your side, jump directly to your topic of interest with the Contents section at the top of this post. Otherwise, ‘Over the Horizon’ will take you to where sustainable energy is headed in 2024 and beyond.
Transcript of: Over the Horizon
Intro
Luke
Alright, welcome back to Just Another Solar Podcast. The first one of 2024 with Luke Beattie, that's me. Karl Jensen. G'day, Karl.
Karl
G'day, Luke.
Luke
And Nigel Morris.
Nigel
G'day, mate.
Luke
Hey, how was the holidays, guys?
Karl
Not long enough!
Nigel
Mine was long enough?
Karl
You had a holiday?
Nigel
I had a bloody butte holiday. I always make sure that I take one big break over Christmas. So, sorry, Carl, I had a bloody cracker. I didn't go too far and just spent a lot of time with the phone off and the computer off and really tried to recharge the batteries back this week, going through the seven stages of grief, you know, depression, acceptance, anger, denial, shock. But by Thursday, the mojo was back. So I'm back.
Luke
I made it through a couple of days, a couple of weeks ago. I was in Nusa Lembongan, which is like a tropical paradise. All the weight of the world was off my shoulders. I had a clear head, came back to work on the Monday, positive, feeling great, Tuesday positive, not a carry in the world. By Wednesday, it hit me. It's like, oh, shit, this is what I do.
Nigel
Amazing how quick you get back in the groove, though.
Luke
It's actually great to be back.
Karl
It's been interesting for me for work the first week back because all of the iStore customers that you're calling up saying, hey, you know, now that you're back, what's going on? How do we see this year? Except they were all still on holiday because they made too much money last year, clearly.
Nigel
A lot of people I talked to actually said a lot of their teams took a little bit longer this year and there seems to be a vibe out there that a lot of families and everyone took as much leave as they could this year after last year being the first real year back after Covid. So I think everyone was busting for a good break.
Battery cell cost reductions
Luke
Anyway, there's been heaps of news and we're certainly not going to cover it all off. So we've just picked out a couple of interesting points. Now, one I saw was on the ABC this week and they're forecasting that the cost of batteries is going to go down by 40% by 2025. That's next year.
Karl
Yeah, interesting. I saw another one on the Electric Viking. That's a YouTube channel guy, Sam Evans, out of Sydney. And he did an episode a number of months ago where he said that the sell cost was 85 bucks a kilowatt hour now. And the cost was 100 bucks a kilowatt hour. And that table that you sent through from the ABC says that we haven't even got to 140 bucks. So I reckon that that 40% drop in sell cost has already happened. And it's interesting that it also said that the cost of a battery in an electric car represented half of the cost of the vehicle. I don't think that's even remotely the case now. I think if you're building it for 100 bucks or even 140 bucks US and your car's got 75 kilowatt hours, then it's 10 grand and these things are like an 85. And so the battery is insignificant.
Nigel
Hmm. I don't know if it's insignificant, Carl. I'll probably disagree with you there, but I do agree that it's certainly becoming less and less significant. This is a really interesting one because, you know, what, you know, I dug in really deep today when, when you sent that through Luke and went, ah, what's going on here? And why is this the case? And, you know, clearly there's a, it's mostly driven by supply and demand, right?
Nigel
Because all these resources, all these mines have come online and supply exceeds demand for lithium now. So, you know, that's forced the lithium price down, which has, is good for consumers and is bad for miners. And there was, there was some really interesting stories actually about Gina Reinhart who stopped a massive buyout of a big lithium miner in WA recently by a U.S. company who's the biggest lithium miner in the world. But, but two things struck me out of that.
Nigel
Number one, the other thing actually that's worth mentioning is that the other thing that's happening is that all the rebates have come off, right? In the biggest markets, China and Germany had huge EV rebatesand they've now turned off. Germany's got a fiscal problem, they've got a budget problem, so they've said we can't afford rebates, so they turned them off. China's doing its thing and saying, well, the market's, you know, booming along quite nicely now.
Nigel
We've got really high uptake of EV, so we don't need a rebate anymore off you go. So, you know, there's really interesting dynamics at play which have this effect of kind of artificially pushing the price down through the supply and demand issues, which is going to be great for us as buyers, whether it's EVs or whether it's, you know, stationary batteries over the next one to two years. And then the forecaster, of course, all the miners want the price to go back up because that's good for them. But of course, then all the manufacturers will be at higher scale, theoretically, if demand keeps going. So, you know, then the price of EVs and stationary batteries will stay low, potentially, because was, you know, all that, all everything else has fallen into balance. So yes, we're in for a really interesting couple of years.
Nigel
The other thing that I picked up on and I haven't looked at Lithium for ages, but Lithium comes from two sources, right? It comes from Brine and it comes from a crystal rock called Spodgamine. And Australia is very, very rich in Spodgamine, mostly in the West. And it's also very rich in high purity Spodgamine. And I kind of kicked myself because 15 years ago, my next neighbor was a geologist and he knew I was in solar. We got talking blah, blah, blah. I said, I am all about Spodgamine, Spodgamine. That's where the world's going to be at in five or 10 years time. I didn't know what he was talking about and was trying to get my head around it and didn't buy any shares. And, you know, I'd be a bloody fortune. I'd be a millionaire now if I'd bought Spodgamine shares. But we're swimming in high-grade spodgamine, which is really, really good.
Nigel
So it's going to be an interesting couple of years. I'm with you. I think we're in for a couple of good years on pricing, but I don't know that it's real yet. We've got to get scale to come in on the back of these artificially low prices to keep it that low. Otherwise, we're going to see it jump back up.
Luke
You can look at the comparison to solar panels. So the production capacity of solar panels, which was maybe going back 10 years, 10 gigawatts globally, that's a thumb in the air. I don't have the exact number. Whereas now, you know, they're talking about pushing towards a terawatt very soon. So what's happened with the price of solar panels is that feedback from manufacturers is that they increase the capacity, production capacity, and then they're absolutely flying out the door. But it's not viable to shut down and turn on plants repeatedly. So they just keep running the plant.
Luke
You end up in a scenario where module manufacturers will sell at or below cost just to keep the wheels turning and then hopefully make the money back. So is it plausible that we're going to see the same thing with batteries, that the scale will come? We know that the mid to long term demand for batteries is huge. So the long term pricing of lithium should be secure. But are we going to see those same forces at play where you end up with so much scale that it really forces the price down?
Nigel
Yeah, no doubt. And I stumbled across a video online this week from CATL. I don't know if you guys follow the fully charged guys, but the fully charged guys took them two years to get into their factory, apparently, but they did a great little video and showed the processes and the automation on that CATL factory and cattle are one of the biggest lithium battery producers in the world now. And the tech in that factory was mind blowing. And, you know, so that's just and that's just the start. Right. So yeah, fascinating.
Luke
I love fully charged. And it's Robert Llewellyn, the guy who drives that was Crichton from Red Dwarf.
Nigel
That's right.
Luke
I can't unsee that.
Arresting Electric Vehicle Fires
Karl
Speaking of EVs and such, I see that the Yanks have come up with a way of putting out EV car fires. It's just been put a blanket over the top and smother it.
Nigel
Oh, really?
Karl
Yeah, it's not that hard, right? At the end of the day, take away the air, then it'll go out eventually. So it's just a fire blanket that they put over the top. And if an EV is caught firing someone's garage or whatever, they wrap it up in a blanket and they follow thetow truck to the scrap yard and they leave the blanket on it, come back a couple of days later to get their blanket back.
Nigel
I thought that lithium fires didn't need oxygen and that was one of the big challenges with it.
Karl
All fires need oxygen. Whether they're capable of generating their own oxygen whilst in the process of decomposition is a possibility. But all fires need oxygen.
Nigel
Of course. It'll burn hot. Maybe it's just that it burns much, much more ferociously with... If it's free of oxygen, my wife was actually bringing that up today. And something came up about an EV fire locally and she said, do we need to worry about that bloody Harley Davidson of yours in the shed? What are we going to do? And I went, no, it's fine. And then I thought, well, what would happen if it went up? I'd just walk away and let the shed burn down. But maybe I need a blanket.
Karl
Ultimately, I think that the correct answer is that you should have a smoke alarm in your garage is probably not a bad idea.
Nigel
First thing I did
Karl
Personally, I think that the electric car fires that we are going to see are going to be because people are plugging in their car to a three -pin outlet, which is a massive mistake. You know, we need proper EVSEs in people's garages that are on their owncircuits and all the rest of it pulling 10 amps through a 10 amp power point for 15 hours to charge your cars are really dumb or 30 hours to charge your cars are dumb idea.
Queensland metering
Luke
Now, one of the other topics, Nige, that we discussed earlier on was around Queensland and what's going on there.
Nigel
Classic Queensland, classic Ergon, classic bloody stupid shit fight going on up there.
Nigel
So, you know, look, I mean, Queensland's always motivated really well by when they release laws and legislation. This stuff isn't new as a number of people have highlighted. A lot of this legislation changed actually in the last year or two, and it's not new, but it's kind of starting to bed in and Energex and Ergon are really starting to push it. Now, there are two things that have really come up here. One is the fact that if you want to put any decent sized EV charges, you now have to put them onto dynamic load control, allow the networks to be able to switch them on or off. Seems reasonable. There's a cost. There's a hassle as you know, blah, blah, blah. But if you want to charge them at high rates and really, you know, being able to belt them, you've got to get on the dynamic control bandwagon. And that is a pain, but doesn't seem unreasonable to me. You know, we probably don't need it today, but we're going to need it in one or two years.
Karl
If it was my network, so I got stuck into that chat on the cutters thread as well. and someone highlighted that 90% of the Queensland grid is or consumers are on single phase. And you've only got 30% penetration of PV in most states. So that means that there's 70% of Queenslanders have still got a spinning disk meter, which I'd be concerned as well, people were putting EV charges on with a spinning disk meter because there's no motivation whatsoever. They're not build peak and off peak. And if you do become home and you've got a spinning disk meter, then you go, oh, it doesn't matter when I get charged the car. So I'll just charge the car.
Luke
Yeah. So apparently it's an issue for meter readers too.
Nigel
Well, it is. And this is the other issue and I have to throw a big shout out actually to the guys that are Arkana because they, they raised this with me. They've stumbled across it. And yeah, they were highlighting that, um, tragically a meter reader [Kane Minion] was killed in a dog attack about 18 months ago, went on to a property American bloody pit bulls, irresponsible owners, and lo and behold, a poor bloody meter reader was torn to pieces and an absolute tragedy. But as a consequence, what's happened is there are now, there is now legislation in place that says, look, if you have an unfenced area where a dog is present and you want to do anything to that switchboard, i .e. add a solar system, then you may well be required to tell the owner that they have to upgrade the switchboard and move it to the boundary of the property, which we know is going to cost two or three thousand bucks.
Kane Minion (left), Derek McKercher (right) circa 1996. Source: LinkedIn
Nigel
That is bloody insane, especially given the fact that as soon as you throw solar on, you're forced to put a smart meter on, which is a good thing. And as soon as you put a smart meter on, meter reader doesn't need to go there anymore because it's now remotely read. So it's a classic bit of Queensland kind of. You don't need to read them anymore, right? That's right. It's a classic bit of sledgehammer reactive approach. Now I'm really vexed on this issue because I really feel that safety is important and I really feel for the family of anyone who's been, especially the guy who was killed and anyone who's been attacked by a dog on a property, it is not something that shouldn't be taken lightly. That's for sure. But yet again, we see Queensland legislators throwing the sledgehammer at solar to solve their problems. And there are other ways to solve this. So it's a bit disappointing and I'm hoping that there's going to be some sensibility put around this issue, especially given that as soon as you put a smart meter that's remotely red on there, problems gone.
Luke
Well, in 2006, that's what the big government did and they copped all criticism for gold plate in the grid. And I'm curious to know what the cost of paying meter readers and all of the rest of the money that needs to be thrown at that would have cost between 2006 and now. So it's actually very short-sighted to maintain what they're doing rather than to go to a smart meter solution?
Nigel
Well, it is. And we already know that in Queensland, as soon as you put solar on, you are going to pay a metering charge of about $0.05 to pay for the cost of that meter. It ismandatory. You are going to get a smart meter. It is going to be installed unless you're a sovereign citizen. And you're going to pay for the cost of that meter over the life of your tenancy or your ownership. That's the way the legislation works, which is a great solution because you get a remote smart digital meter installed and you pay for it over time. It's a great idea.
Karl
We're our own worst enemy here, right? So people in Queensland have put single- phase inverters on three-phase houses, which has never been allowed in WA. And it's a bad idea, which if a house has got three -phase, it should have a three -phase inverter. Similarly, what's also a bad idea is people aren't paying attention to the boards that they're installing these bigger systems. So now we've got ten kilowatt single -phase inverters that are relatively becoming common. So all of a sudden we were connecting 40 amps of 44 amps of supply to the 63 amps that they've got from the street And then as a case on Crap Solar where someone's got two Powerwalls got another 44 amps there So I've got a hundred and fifty amp supply connected to an 80 amp board and I scratch my head and I go what did that melt?
Karl
Well it melted because it was never
designed for that in the first place and There was also a bit of talk about apprentices
and apprentices not being recognized who work for solar companies That's completely
nuts. We're in the industry of rewiring the whole nation here We're not just bolting
together solar panels. We're rebuilding their switchboards from scratch. This is more
complicated and it takes more expertise than it ever has to just build a house in the
past. So there's a lot of hurdles that we need and a lot of barriers to break down.
Discussion with Derek McKercher
Luke
And now today we're joined by a special guest From Perth as well and we actually had lunch today, which was really nice. We've got a Derek McKercher from Perth Solar Warehouse. I've just noticed all over the place Derek pops up winning awards Interacting going to conferences. So thought it'd be a great guest. Welcome to the podcast Derek.
Derek
Thank you for having me gentlemen It's good to be here.
Luke
Now. Did you get much of a break or if you work through?
Derek
Look, I have a tendency to work through a little bit I love a little bit of balance though So I get a little bit of beach during the day and then I go back and do a little bit more work And I love that time because it's the time that that I get to work uninterrupted from all the the daily noise and I get really good flow with creativity and getting on top of all the things that sort of might have had shelved throughout the year and Just make great things happen in saying that a little bit contrast to what you guys were saying with I love getting back into the flow. So I get a little bit excited when Monday swings around. It's almost a weekly thing because all of a sudden the wheels are turning again and everyone's occupied. From a business owner's perspective, cash flow returns. It's a great feeling to just have the ship back in motion.
Luke
Now, you've got a really interesting business model and we'll probably get into that a bit further on. Normally, we start with a brief of how you got into the industry and what your journey has looked like. Do you want to just share from the start?
Derek
I guess I came into the industry as an electrical contractor and then evolving into energy efficiency and solar as things grew. Probably what spurred me to take it on [Solar Retail] myself was I saw that there was a way to do things better or differently. That was really important to me in business because I think it's a good principle because there's already a lot of businesses out there already. How do you disrupt it or have a positive impact? When we were subcontracting to a lot of companies, there was a lot of complaints that you just listened to the different aspects of frustration. And so I worked out a way that we could improve [on] deficiencies that were existing in current models and improve efficiency along the way.
Luke
What sort of differences are you talking about compared to the companies that were around then?
Nigel
Yeah, what's your secret, Derek? Come on.
Derek
Well, digitalization is my secret.
Nigel
Nice!
Derek
I saw that there was a lot of human error that was occurring and ways that we could look to mitigate that effect. If you didn't have the right process, it was very easy for things to get misinterpreted or issues to arise. And so if we created a more systemized format and at the roundabout at the time, the cloud was just coming into emergence, CRMs were becoming a big thing. And I realized that if we had a set, a nominated amount of procedures and tasks that would just allow the entire machine to just keep moving with minimal interruptions, it would actually deliver the results to the customers that they were genuinely impressed with compared to other type of trade services, especially when you've got a sequence like solar where you've got applications and all those sort of things.
Derek
It seemed like a privilege that was only open to bigger businesses that could afford an IT expert to come in and do this. And I thought to myself, you know what, I reckon I could work that out. And so I just started tinkering with different softwares and the likes to remove an exorbitant expense so that we could then take it into a small business type of scenario and then slowly just start to multiply that. Nothing's perfect from the start. So you take customer feedback. You take even software deficiencies and you learn from those boundaries and then you consistently look to improve.
Nigel
It's such an interesting topic because operational efficiency, you know, when margins are so slim, operational efficiency is the only real place left to enhance your margins or to find a competitive advantage. I've been chatting to so many people for so many years, you and I were talking about this the other day, Luke, about process and systems. And you know, and the interesting thing is that as solar and our electrification journey gets more complex, process, systems, digitization and data all become so critical and, you know, finding ways to speed up those loops of feedback and, you know, keep those processes and systems developing and evolving all the time. Really, really critical stuff. So good on you, mate.
Karl
That comes down to quality, right? You can't produce consistent anything unless you have a map that procedure for it. So in working towards a quality system, so like ISO 9001, basically says that you need a procedure for everything and you need to do everything as per the procedure, and then you get a tick in the box. But people usually evolve into a quality system of sorts with procedures, simply to lower the number of, as you said, lower the number of defects. If we know what we're gonna do, then if we lay that out so that we can give that job to some, should be able to give it to someone off the straight, you should be able to read the procedure or whatever and do it. And that also gives your business an excellent layer of redundancy in that if someone's not there or gets hit by a bus, you're still capable of doing it because you've got that process already nutted out and someone else can follow it.
Derek
Well, that's correct. For example, within our system is that if a task is not being fulfilled within a nominated period of time, we can then elect to another internal staff member to take on that load. And what should happen for the end user or the customer is that they shouldn't experience any of the mishaps that might occur or the day -to -day runnings of the business. That's our issue is to take that responsibility and to give them a seamless process. With that, what we do try to also do is provide them with layers of information or segmented information as they progress throughout. So answers questions as they go along.
Karl
Yeah, and it's tricky in WA when a three -phase upgrade takes 12 months, hey Luke.
Luke
Yeah, can do. Thanks, Western Power. On that note, I note that the Smart Energy Councils just engaged Wilf Johnston, formerly the National Boss of Enphase as a general manager for WA.
Nigel
Yeah, that's a good pickup, isn't it? Wilf's a great guy.
Luke
He's a great guy and he's motivated to help get some changes around some of that stuff so that's going to be really good to watch. I also note, Derek, you mentioned about the cloud. Now these days, of course the cloud, everyone's using cloud platforms, but really going back even 10, 15 years, it was a bit like internet banking when it first came online, people were suspicious, worried about security and so forth. So a lot of companies didn't adopt it until it became mainstream, but you were back there jumping on the cloud.
Derek
And so we're almost one step ahead of the whole COVID thing a little bit. So when that came around, we're already prepared for it.
Karl
It's interesting that we talk about, Luke and I have always talked about working off the back of the boat. There's no reason why we can't do that anywhere in the world. And one of the other people that we have, we had on the podcast is Matt Wright. And he called me yesterday and you can't tell the difference where he's working from. He's working in Vietnam at the moment where his wife's family is. So it's absolutely doable, can't tell the difference. No lag in the phone calls whatsoever, just 100% spot on. It's fantastic that we live in a world where we can do that.
Derek
You've got to be driven though. I think there's a lot of people that their minds might wonder a little bit when they're in an alternative environment. So there's a little bit for both people. I know that I don't have enough time to do everything that I want in a single day. And so I'm always gonna be, where I'm looking for a connection just so I can basically keep working or keep implementing. So I love an airplane with Wi -Fi.
Luke
Really, I actually, even when they have Wi -Fi, often I won't connect to it and I'll intentionally be disconnected.
Karl
Ultimately, you get to the point where you're so busy that if you're disconnected for two days, you come back to such a huge volume of work that you're buggered for a couple of weeks.
Derek
That's where you start prioritizing different trips. And I'm looking at the schedule for the year ahead and there's some that I just have to cut out of there because I can't do back -to -back trips anymore. It has to be, you can't even go for anything longer than seven days half the time or five days or a work week because it's just, it's too much time away. And if you're not consistently on the ball and you're not consistently motivated to keep improving, then it doesn't take long for someone else to come around and overtake you. And that's what drives us though, isn't it?
Luke
Just changing tack here, Derek. Tell us about your demographic and your approach to market and how you found success there.
Derek
Yeah, well, I guess that's probably quite interesting. It took a little bit of time to accurately identify where we existed in the market. And it is the internet where I exist. And when, once you realize where you exist, you get a better understanding of the customer and how they're shopping for your product and for your service and what they particularly want from it. So I just looked at the way that I would shop for any particular product or service and then I would look at different responses that I might get from, if I was doing something for my house from a concrete in contractor was one and I got bombarded with all this information in one email. And I thought, I'm never reading that.
Derek
I don't have enough time to barely read the emails that I've got in my inbox. So why would I send, as my introductory email out to a customer, a proposal asking them to marry me on the first date? You just don't do it, right? You've got to use a little bit of digitalization and tact in order to appeal to the people, because they've also got short time. You just have to think, if you're searching for something on the internet, you might just be generally inquiring, but you don't necessarily want to open up a whole can of worms straight away. And so everyone's on their own different timeline of making a buying decision. We want everybody to be buying straight away, but that's just not how the world works..
Derek
All I do is give people a more detailed product overview of what they're particularly buying because we do see that people are now buying cars online. They're buying lots of different things in different ways and you can showcase it by being comprehensive online because I think that people, they are looking for a level of detail when they are browsing. In the past, we used to just put up a page, but now we just have to have different layers for all the different people that are coming through. Some you're going to have an engineer. Some you're going to have just someone that just wants an answer, I just want a price, and not everybody is the same.
Derek
And so the user experience has to be broad and open to everybody. And that's how you kind of build trust because that's what we're doing in sales, right? We're building trust and we can do it in different ways. Some people do it face to face. Some people like a layer in front of them. If you're a customer, you might like to browse your options, you know, see what's out there. And then maybe in three months time, you might want to be in more of a purchasing decision [mindset]. Now, it's not probably out of the sales handbook, but as said to you before, I'm just an electrician.
Luke
You can get away with that maybe 10 years ago, but buying is probably a bit more than an electrician.
Derek
If I could give any advice around that, is just how would you be comfortable in buying something? And so it's not necessarily unique to what our business does. If anybody is already looking at our business and what we're doing, well, you're already behind. And you should be looking forward and ahead and at the next thing. So if I do look at a competitor, I don't know, it wouldn't be to seek inspiration, because I can already tell you if you're looking at us today, you're already in the past. It's a little bit like the sunset on the horizon. The sun is at sets, it's actually already set. Five minutes ago, because of the atmosphere and everything like that. It's exactly the same principle, because we're already moving forward. I've got new content and new designs coming out.
Atmospheric Refraction diagram. Source: timeanddate.com
Derek
And that's because I'm listening to the customer and listening to what they want. Whether that's in a false phone number that they might leave, that's because they're tired of leaving their phone numbers with companies and they just hound them. So you have to have another way of cutting through the noise and building trust. And if that's time, then and fortunately, a lot of electricians have the ability to build that trust quite easily because they're honest and they're technically astute and can usually give a good overview that's quite relatable to a lot of homeowners.
Nigel
It's pretty interesting watching away my 19 -year -old buys anything. It's like if it's not available online, he's not buying it. If he can't order it, he's not buying it. So there's a whole another generation about to plop on us in the next five or 10 years who are going to have a whole as you say, you know. You've got to be thinking one step ahead because by the time someone looks at your website, you're already thinking about what the next customer's thinking and how they're behaving and all those kinds of things. And then we've got all these generational changes as well.
Derek
Exactly.
Karl
I only realized literally a couple of days ago that my job doing what I'm doing isn't not a sales job. Obviously, I'm a sales guy and I sell heat pumps, but I have to educate people into all the things that they need to do. So it's actually them that has to do the selling. I've just got to educate them with all the stuff that they need in order to be able to make that sale with the customer. So my role isn't a sales guy anymore. It's actually someone that provides training. We went through this sort of 14, 15 years ago at the start of solar. We needed to educate people then. But because we convinced them it works then. Yeah, we've been doing it so long now it turns into more of a sales role and that, you know, we're just providing a service for whatever. I hear that in your mode of discussion there, Derek, that's the same thing. You know, we're constantly having to evolve into something new all the time.
Derek
That's true. Or else could be left behind because I did that once too. And I sat idle for a fraction too long. If you think you've made it and you think you've basically reached the top of the mountain, but you just have to look a little bit further in the mountain. There's another bigger mountain just over there that we have to set our sights on because it doesn't take long for someone else to meet you up there and then soon overtake you. So I think a level of agility, especially in the digital space, if we're agile and you're able to pivot quite quickly and to look at new directions, because even this whole solar space that we're in now, or let's say sustainable energy more broadly, I would relate it similar to where the internet was in 1995. In broader energy, we're going to have lots of segments of specialists. There's a lot of opportunities. out there for everybody.
Karl
We need to be good enough at everything rather than masters at one. Anytime you're a master at one and something does change and you can't pivot fast enough, then you've gone. And having a broad range of tools in the toolbox to be able to do different things is advantageous. And of course, the solar industry's figured that out pretty quickly that we don't call it the solar coaster for no reason. And now we've got EV chargers and air conditioners and induction cooktops. And all of this other stuff that we've got to go out there and do. And do we go out there and do everything?
Karl
There are definitely solar businesses who have ratcheted up their average sale price. So, you know, if we're competing in the 6 .6 kilowatt space, we've got to try and somehow put a 6 .6 kilowatt system on someone's roof for three grand. That's the challenge or whatever the number might be. Whereas if we're going there and we're selling in a battery an EV charger and induction cooktop, a heat pump, five air conditioners, all of a sudden. We're going in there and we're selling $50 ,000, $60 ,000. I had a customer told me last week that they've done $100 ,000 electrification upgrade for one client. He's just like, shit. You know? Oh yeah. A lot of Cahunas. I know. And that's a whole lot different to the solar installer market that we used to be, which is great.
Derek
I really liked that though, because I think that's exactly where you've got to have a broader vision. And even in your basic solar system, is have a view as a return sale. So have a really good impression on the customer, because a lot of people can't afford it at $100 ,000 straight up.
Karl
I'm going to be your person for the next 10 years. So we definitely covered this on another podcast. One, this is step two. This is step three. I appreciate that we can't do them all at once. I'm going to be your guy for the next 10 years. So I need to do a good job so that you want me to come back.
Derek
100%. In our process, in our CRM and going back to that topic, the installation is only the center part of the process. It's the middle part. It's not the end. And everything we now have another component that we have to fulfill to make sure that customer satisfaction is number one. And the more customer centric we are moving forward, especially with the way that people are becoming more and more happy to do their research online, we need to be customer centric businesses. And it sounds obvious, right? But it was easy to sweep people under the rug in the past and keep them silent.
Karl
But this is one for Nigel. In God we trust. Everyone else bring data, right? That's it. So Derek, we usually get into this with our podcast guests, which is what do you do for your de -stressing and downtime and how do you manage that other challenge? of your family and such?
Derek
Mine is mainly spent at the beach. I love the beach. And I think that you need a good balance of nature and work. So usually I'll go for a walk along the beach because it allows me to tune things over in my mind a little bit, but I don't tend to dwell on things too much. Fresh air helps, but and if I do, I get out for a kite surf as well. But that's also a bit of a time sink. So if I've got three hours in the afternoon, then I'll definitely make it. But definitely the beach is my go -to part of nature. Even if it's just an hour out of the day, straight after work, go home, go for a walk on the beach, come back, and then maybe even get into a little bit more work. But it's definitely a different train of thought after and it's something I never used to do.
Derek
I put on quite a good amount of weight and probably I noticed that my thought process cleared up a lot better once I started doing lots of little things. And so one of the other things that I'll do during the day, because I started to develop a lower back problem, and that was through just too much sitting and working on the computer all the time. So in the middle of the day, I worked out that I could afford a half an hour gym session, which is just down the road. Other guys that I know would go to the gym for an hour and a half. An hour and a half was too long for me, but half an hour, and I approached a PT and sort of did resistance training, high repetition, not too heavy weights, efficiency in the gym type of scenario.
Karl
And... Turns out I know a guy that knows a lot about gyms. That'll be you, really?
Luke
Yeah, so I take a similar approach to the gym. So I'll be in and out within 40, 45 minutes, but it's been very intentional about it. So having shorter breaks between sets. I chat here and there, but don't get bogged down in chats. Don't muck around on the phone. I go, I get up at five most mornings, go to the gym, and it's all about efficiency, as you said, in and out. So someone might be there for an hour and a half, and they've done the same amount of exercises, but I'm not there for that. I'm not there to socialise. I'm there to get the job done, get to the office and push on with the day.
Luke
So I relate to that completely. But I agree with what you said. Like, I mean, it's the little things that you do. That's what you can fit in. Whether it's fitness, whether it's diet, they build it up to be such a big thing that they must implement the whole lot in one step, and it becomes something that's not really manageable and it's not sustainable. So if you can do half an hour in the gym, that's fantastic, because frequency is more important than just hitting it really hard and smashing yourself and killing your motivation. Little bits frequently is much more powerful than that. That's my bit of advice, but it sounds like we're aligned there, Derek.
Derek
Absolutely. Well, I found that it works, and if it works, then I'm happy with that. But everyone finds what works for them individually.
Karl
How do you find the kite surfing? Is that an injury prone sort of sport? I mean, it seems dangerous.
Derek
No, I think it is depending on what you make of it. You could say the same thing to Nigel in riding a motorbike. If you're trying to do back flips, then it becomes a bit more dangerous. But if you're just driving down the road, it's not too bad. And kite surfing is, if you're in a good group and you're not doing anything too aggressive, there's people that are 75 out there doing it and it's good core activity. And you can just go side to side, get a little bit of air. And that's all I do is just try to get as much air as possible. But there's other people that want to do kite loops and all sorts of funky things. And I'm not competing in Red Bull. So I don't need to do that.
Kite Surfing, Safety Bay, Western Australia: Derek McKercher
Derek
Once you realize what you're doing something for, and for me it is just being, you know. There's something about being propelled along by nature and that force, that power that you get, and that fresh air injection, and you're forced to suck in more, and then you get hit by some water, but that's fresh and you feel alive at the end of it. I think there's something special about that sort of sport.
Karl
For someone that was listening to the podcast that thought, oh yeah, that's a good idea. I might get into kite surfing. What does it cost to set yourself up? How much wind do you need?
Derek
Your average kit, brand new, you're probably looking around about $5,000, but you've got training that you probably want to do.
Karl
That's a shitload of dough, mate. That's a hell of a...
Nigel
That's a cheap hobby, Carl. That's a cheap hobby.
Karl
Cheaper than electric Harley, sure.
Derek
That's right. Look, what is a kite? It's about $2,500, brand new, bar lines, board, and a belt. Probably a bit more now, to be honest, but you can do it for less. You can do it for probably $2,000 secondhand gear and work out whether you like it, but there's no ongoing costs with it. There's no fuel into anything, or there's no hiring or anything else once you've got it.
Karl
I want to trade in my $10,000 electric bike.
Luke
Now, we're going to wrap up in a sec. I thought I might whip around and see if there's any last questions or comments. We'll go to Nige first.
Nigel
Yeah, I'm actually going to throw it out there to my family today, because number one daughter is about to drop another child, which is an outstanding accomplishment, grandchild number two from me. She's one of the most wonderful humans on the planet, and I just love her dearly. She's turning into the most wonderful, wonderful mom, and she's got a great partner and a growing family. Good job, Charlotte. Son number two, he's about to go to uni. He's going to head off and do a degree, which is an awesome accomplishment. He's been working in his chosen profession for the last year or so since he left school and he's really, really got some amazing talent and digital art. So, you know, good on you, Mal.
Nigel
And son number three, he's just finished his very first week in the real world as a plumber. He decided school wasn't for me. I want to be out in the workforce. I want to be on the tools and we actually gave him a beer this afternoon and sat him outside and said, tell us about your first week on the job, mate. And so good. He's in the real world. He's doing what he wants to do. So, you know, my wrap up for the week is I'm a lucky dad.
Luke
Fantastic.
Karl
Sounds like he should be installing heat pumps.
Luke
Give him a couple more weeks before you do the Karl introduction.
Nigel
I just want an outdoor shower first, right? Just one step at a time.
Luke
Karl, any comments?
Karl
No, apart from the revelation that my job is actually as a trainer and an educator, not necessarily as a salesperson. It was my revelation for the first week back and it turns out that I enjoyed doing that quite a lot and the industry is really moving quite quickly here in that we're moving towards this genuine electrification that for most people hasn't happened before. So lots of changes. It's awesome.
Luke
Derek McKercher from Perth Solar Warehouse. Thanks again for coming on the podcast. It's been a really good chat. Do you have any last comments or shout outs you want to give?
Derek
To be honest, I want to thank you guys because what you're doing with a podcast is a level of knowledge sharing that the world needs more of and you're diving into and exploring the minds of different people from different aspects of the industry and I love that it's done locally in Australia that is, we're not just fed only with American stuff or anything like that. Sorry to anyone in America that's listening but it's great to have local content.
Karl
If we could be somewhere else we would be.
Derek
There's a lot of intelligence out there that we can bring to the forefront and the industry. It doesn't have to be proprietary all the time and we can get it out there and we can make more rapid improvements and progress as an industry together. So thank you to you three for being proactive on the podcast scene.
Nigel
Good on ya, mate.
Luke
Thanks, Derek. Appreciate it, mate. Thanks again for coming on. And Karl and Nige will catch you next episode. We're going to have a group of guests. Thanks for listening and please remember to subscribe, share it around and we'll catch you next time.
Wow, what an episode! Key takeaways are almost always going to be relative to the individual reader. Nevertheless, sharing hot topics or inspiring stories inspires positive growth in an industry that will dominate the next two decades in a transitionary capacity. Sustainable energy thrives when we all benefit.
This post and podcast is dedicated to the memory of Kane Minion who was the meter reader and childhood friend of Derek McKercher, mauled while working in Queensland in 2022. Derek’s recognition via Perth Solar Warehouse ›
