Editor's note: The following is the transcript of a live interview with James Mason, Eric Cieslak, Anthony Romero and Rob Smith of ABC Supply. You can read the interview below, listen to the podcast or watch the recording.
Intro: Hello everyone. My name is Heidi Ellsworth and this is Coffee Conversations from RoofersCoffeeShop. We're so excited to have you here this morning. I hope you have your cup of coffee and you're ready for a great conversation because we are with the experts from ABC Supply and we're going to be talking about renewable energy today.
Before we get started on this great conversation, a few housekeeping. This is being recorded and it will be available within 24 hours. Be sure to share it out to everyone in your company and other roofing professionals. This is the kind of information you need to grow and differentiate your business. Also, as you all know, the chat is open, so be sure to give us a little bit about you, share your information, where are you from, what company, what kind of company. We want to hear everything about you. Plus, more than anything, please your comments and your questions. That will be open throughout the entire Coffee Conversation and I'll be sharing that.
So let's get started on this great conversation this morning. My first thing is, thank you ABC Supply for sponsoring. This conversation is so important as we really look at what is happening out there on renewable energy, solar, and so many contractors right now are like, where do we fit in? How do we do this? And so we have the experts here today. So let's start with our first expert, James Mason. James, welcome back to the show.
James Mason: Heidi. Good morning. Thanks for having me back. Good to be here.
Heidi J Ellsworth: It's so great. I loved this conversation last year. Very excited for it. Again, can you introduce yourself? Tell us a little bit about what you do and about renewable energy with ABC Supply?
James Mason: Yeah, yeah. So I'm like you said, James Mason, Vice President of Renewable Energy for ABC Supply. It's been a very, let's just say, interesting year in renewables. Very exciting, lots of good things going on and just excited that ABC is leading the way in distribution for renewable energy. So just really busy, a lot of growth, a lot of good things going on. So really looking forward to this podcast and talking to you again. And it's still crazy. This is live, right?
Heidi J Ellsworth: Yes.
James Mason: So, I can't edit, I can't hide, so if I say something bad, I can't go back and edit it, but no.
Heidi J Ellsworth: I'm not worried James. I'm not worried.
James Mason: I'm not either. Cracks me up though when you say expert. I was looking around the room like, "Who? Me?"
Heidi J Ellsworth: You are the experts. So what's great. So well thank you for coming back. And Eric also is returning. Eric, thank you so much for being here today. Can you introduce yourself, talk a little bit about what you do with ABC Supply.
Eric Cieslak: My name is Eric Cieslak. I'm the Business Development Manager for ABC Supply. Been working with ABC for 10 years. My job is just to assist and help branches onboard solar and educate them and just get involved in any way I can to help anybody and everybody from our industry and outside of our industry to get into it.
Heidi J Ellsworth: I have to tell you, I remember our conversation last year with you and James and I'm still smiling. You guys make me smile all the time. So thank you for being back here. And we have some new guests. I'm so excited to have Anthony here. Anthony, welcome and can you introduce yourself?
Anthony Romero: Thanks for having us, Heidi. Yeah, my name's Anthony Romero, Business Development for the Central United States ABC Supply. Been in the industry for a little bit over 15 years right now. Worked in a couple of different facets of the industry, worked for manufacturing and also worked for some other solar distributors. Been with ABC Supply for just over a year right now and it's been a fun ride so far, so excited to talk about what we have in the pipeline over here.
Heidi J Ellsworth: Yeah, lots of really great stuff. It's changing the industry, changing the industry. And we also have Rob Smith. Rob, thank you so much for being here. Can you introduce yourself and tell us what you do?
Rob Smith: Thank you for having us, Heidi. Again, my name is Rob Smith, business development manager here at ABC Supply. Backgrounds, been in the industry 15 years, 10 as a contractor, five in distribution and a year in manufacturing. Very excited to be on the podcast, so thank you.
Heidi J Ellsworth: Thank you, thank you so much. This is a hot topic. I was just at the National Roofing Contractors Association, NRCA, summer meetings, solar, renewable energy, sustainability, everybody's talking about it. So James, let's just start out and level set on what does the market look like for renewable energy right now?
James Mason: Heidi, that's a great question to start and level set. So if you will allow me, I'll just add a little context to this. And I'm speaking just worldwide now, but let's take it back to 2004. I know that seems like a ways, but it's really not too bad. But 2004 we could probably install about a gigawatt. So that's about a billion watts. It would take us about a year to install that. Let's fast-forward to 2010. We could probably install that same gigawatt or a billion watts a probably in about six months. Fast-forward to 2016, we could probably do that in about a week, right? In 2024, there's days like a day where worldwide we could install a billion watts, right? A gigawatt. So think about that type of group.
Heidi J Ellsworth: That's amazing.
James Mason: So it's amazing what we were able to do in a year, fast-forward less than 20 something years or a little bit under that. You're able to do that in a day. I don't know too many other segments where that's happened, that type of growth, that fast, that exponential growth. And so it's not hyperbolic, it's real and that's the thing that's different. And so when you ask that question, the outlook, no pun intended, but very bright, right? Like the sun. I mean when you think of and we're just scratching the surface of how far big this can get.
It's just exciting, man. I started getting chills thinking about, so it's a bright future. And if people are worried, should I get in? Should I not? Is it too late? No, it is just getting started. So it's a great opportunity. And all the things are aligning, the policy, the financing, the support to really make this happen and to continue to scale. Not only nationally, but globally.
Heidi J Ellsworth: Yeah, there's so many times that I look at this and I just think we know it's happening. Like you said, policies, legislation, everything is happening out there to drive this forward, but I don't know if the roofing industry always knows where they fit in. And so I would love that overall look too again, just what you're seeing in the roofing industry overall with the market for renewable energy. Just your insights, James, because you're everywhere.
James Mason: Yeah, I feel like it. No, great question again. And listen, and it's no pun intended, but roofing, right? I mean it's like the foundation, the corner piece of the home. You can build it up but it's not really a home until you cover it with that roof. And that's where the solar goes. When you talk about residential application and even into multifamily and some commercial applications, so outside of ground mounts and utilities, the roof, that space that's on top of your home. And so when you ask, well where does that come in with solar? It's a natural convergence. It's like a marriage. So the roofing is already there and you put the solar on top of it. And so I would say in the next five to seven years and it could be a little less, if you're doing solar, you're doing roofing. If you're doing roofing, you're going to be doing solar. And if you're not doing both, you're going to be doing a little bit of nothing.
So right now it's a huge opportunity to get in. And I'm going to go back to, well, what I said about a year ago, those two words, opportunity and threat. Right now, it's an opportunity to get in to learn, to grow your business. But like I said, that opportunity can shift to a threat as more people move to do both because that's what the market is asking for. One shop source, one wraparound warranty, a person that can do it both. And who better than the roofing industry that it's been around for a very long time that can do the roof and then add the solar and present that system. So just think about all the growth we talked about. Roofing is included. As long as we're going to be living in, we're in existence, we're going to need a place, a roof over our heads. Once again, no pun intended. And now that you need the roof over your head, go ahead and throw solar on it so you can light the house too.
Heidi J Ellsworth: I love it. It's so true. I mean this is our world, the roof and that's where it's going. I mean knowing that there's also, so land farms and stuff like that with solar and everything, but really the roof is the future of it. What economic benefits are communities and businesses who are working with you all expecting as they transition to renewable energies? And so maybe Eric, what are some of the things that we're looking at for those benefits?
Eric Cieslak: I think mean the number one benefit I always think of is just the tax benefit with the IRA. I think most communities and homeowners, it's an incentive to get that done. The grid, electrification of the grid and adding to the grid, because I mean the infrastructure of the grid is not at the best across the United States. Some places are better than others, but I think that capability of putting everything together, the incentive says provided by the government, the roof now the roof integration into the solar system doing the BIPV, all the new technologies are coming out. There's a lot of things that are adding so much value to homeowners and to the communities. And I'm pretty sure eventually they're going to have microgrid systems where they're going to have batteries or incorporated into communities to help the grid to offset our usage during time of use or peak. So there's a lot of things that are coming together. Like James says, everything's starting to come lineup. Now distribution coming involved and simplifying the ease of installing it, loading it, getting away from the dangers of loading solar to the roof. And now loading it instead of manually loading it up a ladder now using machinery that we've been using for roofing for a long period of time, less things that could go wrong with that. So there's a lot of things, it's hard to put it all together into a couple of things.
Heidi J Ellsworth: Yeah, it is. And Anthony, what you all are seeing on like, what Eric's saying, just not the communities but also our roofing communities, just overall the benefits as you are working in your regions, what are you seeing?
Anthony Romero: I mean just to radiate what Eric has hit on. I mean I think he hit it. For us here in Texas, just having that energy independence is a big thing for us. I mean that's huge. I mean what's more American and being independent? That's a big one for us. And then especially with all the storms that we get hit with on the coastlines while everyone's out of power, still being able to run your electricity, run your fridge and be able to provide for your family and those times of need is another value add that we see. That's what driving a lot of it here in Texas as well and on the coast.
James Mason: Heidi.
Heidi J Ellsworth: That makes so much sense. Go ahead.
James Mason: If I could just really quick, because you brought up Texas, just Anthony, because he was there. Could you talk about, you remember, I know it was, give me a little rope here, 2019, you remember the Texas freeze, right?
Anthony Romero: Yeah, yeah.
Heidi J Ellsworth: Yeah.
James Mason: Yeah. And people didn't have it. Could you just touch on that a little bit? Fast-forward now that why Texas is, that has a lot of oil and gas, has jumped to the number one spot. It's about independence, about having control. But could you just touch on that really quick, going through that freeze and what people experience there and now how their mindset is going forward and how roofing and solar helped push that forward?
Anthony Romero: Oh yeah, I mean that was bad. We were out of power for five, six days. And in those freezing temperatures, not being able to heat your home, that's huge. That really woke a lot of people up around here to hey, we need to look at some alternatives. And I was sitting here, I mean I have solar in my house and I'm sitting here, lights on, no issue. But I look around at my neighbors and none of those guys are all three or four days, food spoiling in the fridge. They're under piles of blankets. There's people that were even, I mean it was pretty bad. People were sitting in their cars and dying of carbon monoxide poison, because they were just sitting in cars trying to stay warm. So I think that woke a lot of people up as to the possibilities and that's when we saw battery sales soar so in this region. And they've continued to so Texas is now one of the top states of the renewable energy spot. So it's getting a huge, especially after that, it's getting a lot of adoption out here.
Heidi J Ellsworth: When you see that need and you see the house next door to you fully functional, everything working, warm bridge rate or everything and then you don't that, I mean those are the kind of things that really drive what's happening. Rob, what are you seeing in your regions?
Rob Smith: With a lot of cost savings, everyone's always interested, especially with inflation these days. How can they save money? The electricity rates historically have always gone up roughly about 3% on a national level. Some areas are [inaudible 00:15:04].
Heidi J Ellsworth: Whoops. Okay, we lost Rob, but he'll be back. Don't worry. So we'll get him back on what's going on. But let's talk a little bit about policy and trends, regulations we've had... Oh, there's Rob, go ahead and finish. You were talking about cost savings in your area.
Rob Smith: Yeah, so everyone wants to lock in those current dollar value of energy rates. Historically, it's always gone up roughly about 3% on a national level. So people want to lock that in. Historically, electricity rates have never gone down. They've always gone up. So in order to combat that inflation and try to save money, people have started going a lot more with solar and battery storage.
Heidi J Ellsworth: Yeah. Yeah. It's just something that we're seeing. I want to go back to what Anthony said, "We all want to be free." We want to know that we're safe and what's there. And now that everything's going to that. So to that point, when we're looking, I mean so much has happened in the last four years and much longer, but really with incentives for renewable energy and where we're going, but also the green, the policy trends and the regulations. James, can you talk a little bit about that? How policy, government policy and regulatory frameworks are really starting to support? And also, frame up on renewable energy for the future.
James Mason: And it ties into what my teams are talking about because there's different reasons why people are going to participate in the renewable energy space, but as far as the policy framework, like Eric touched on, it all started from the inflation reduction act, the IRA, which drove the federal tax credit. That's for everybody to incentivize for you to use. But then on top of that, the IRA also funded multiple programs in all of the states to do different things for different reasons, whether it may be grid resiliency, to building up micro grids, to building up battery backups. The framework about the policy is one, to ensure that we help transition from fossil fuels to renewable. And this is not to politicize it or weaponize it, right? We're talking just pure economics.
And if you will allow me just this quick example, you tell me and this is just a rhetorical question out there for everyone. If you just granular level, what's easier, cheaper and more efficient? For me to take the sun that's hitting my roof, convert it and put it into the grid for use or whether I'm drilling for oil or mining for coal, I still have to get it. And it's not a bad thing. I'm just saying that's just something that you're doing. Then you have to send it to the refinery to rework it. Then you have to turn around and you have to send it back, then put it back in to supply chain. So when you just think about those dynamics, it's pretty evident what's more efficient, what's faster and then we can get into the dynamics of what's cleaner and all those things. And we don't want to go down those rabbit holes, but you get what I'm saying, just the economics of it, it makes sense and the sun is accessible to everyone. And that's going to be the level set or the equalizer.
And so the policies and the incentives are there. And I know later on we'll put something up where you can go to Ohm Analytics and talk about it. But what I would suggest in all, your markets are where you are, go to your state website and look at all the programs and all the incentives and you would be surprised, that the policy is set in place to help transition and accelerate and help the citizens of the world and of the US transition and get into the renewable space.
Heidi J Ellsworth: So, let's bring that up right now for everybody, because what we're looking at and maybe we can walk through this a little bit, James, just on some of, I mean we have about four sheets here, so everyone, we can get these to you. These will be available on the ABC Supply directory. So you'll be able to see help get all this. But James walk us through some of what is going on with the state incentive updates.
James Mason: And I'll let my team jump in, but I'll just give an example, the first one that just happens, I am from California, but I don't want to be accused of being biased and I'm saying California is the best state, it is, but I'm not saying that. I'm just joking, but I'm serious. But there's a SDCP battery program that's launched and you can go on and you can read about the rebates that they're giving once again to incentivized people in the state of California to do that. And I know we haven't hit up, but Hawaii has one.
Rob, I'll kick the floor to one over to you. I think it was back. They have some things and you could talk about things that are going on on the East Coast.
Rob Smith: So the Carolinians, we had back in, I think it was 2012, we had a state tax credit of 35%, paired with a federal tax credit of 30% utility rebates. I mean it was a no-brainer if you had a tax appetite to go solar. The payback was between three to four years. Unfortunately we lost that state tax credit back in 2016. But we've matured as an industry and there's been a little bit of shift and they've done away with net metering, very similar to the NEM 3.0 out in California. But since they have also added a brand new battery program to help solidify the grid stability and whatnot. I've got to give a little bit of a shout-out to NC States because there's a website called dsireusa.org and I'll put that here in the chat here in a minute. But it has basically every single type of tax credit tax policies for any states. You can look it up for wind, for solar, biogas, anything renewables.
Heidi J Ellsworth: And that is in the chat. So you're going to put that in the chat, right, Rob?
Rob Smith: Yeah.
Heidi J Ellsworth: Perfect.
James Mason: Hey Heidi, just really quick because Rob hit on something. If you look at that Duke Energy in the Carolinas, that top one you have up right now, Rob talked about rate increases. And there's different utilities working and Anthony has a utility and is central and Eric is dealing with guys out west. But like he said, I mean just historically rates go up. And I'm not trying to demonize utility, but I think Rob, it'd be fair to say that and any type of commodity or anything that you have prices or your gas, your food, they'll go up and down, but over time, it's a trajectory of the line going up and not down. And so getting into renewables and all those things can help level set that. If you're producing your own power and storing it and using it, not only are you saving money, but the excess that you do produce can go back into the grids and over time hopefully level set and keep pricing low.
Rob Smith: Yeah. And it's putting a lot less stress out onto the grid as well. So it's not as much demand coming from those substations, from those generating sources, whether it's coal, whether it's nuclear, these distributed generation facilities on the businesses or the residential sides are able to supply power at the local level to your neighbors for whatever power you do put back onto the grid. So it's less power that's run through those distribution lines.
Heidi J Ellsworth: Really getting down to the nitty-gritty as we're looking at this, what's the advice that you have for roofing contractors on really understanding these incentives, understanding these policies and being able to communicate them effectively to their customers, whether that's residential or commercial? Eric, what are some of your thoughts on how are you helping contractors out there to really utilize this and make it a part of their business?
Eric Cieslak: That one's a little difficult because I mean, in the roofing industry, as a roofing contractor myself, when I came in and not knowing any of the solar stuff and energy and really had to learn it from the ground up, it was actually I think was meeting and sitting down with people that were actually doing the solar, get an idea of what it's all about. Because when it came out, when I started touching into it was 2010 and the people that I was dealing with, I had no clue. So in order to find that information and gather it, I think ideally was to actually sit down and partner. I mean we're all working together in the same location, especially as I worked with a lot of general contractors, so they would all show up to the job sites. And unfortunately I was one of the few the last trades, so I never got to see the house finished. I always got to do the roof and then I was gone.
But then I used, I would crossover with a lot of electricians and solar contractors because the involvement and integration to the roof. And it was interesting, because I just saw what they were doing while I was up there and just to know more about what's supporting it. And that was one thing that I started to realize really quickly was the incentives behind it. There is hardly very many incentives around roofing. In regards to solar, it's a no-brainer for the homeowner, but to learn and gather that information, you do have to do a lot of research. And I ideally think networking was a good situation, talking to general contractors and knowing more. So this is for the person that just doesn't know anything on the solar aspect. I think the ideal scenario be the network, to get involved, to understand, going to have to read, you're going to have to learn more, you're going to have to expand your knowledge on the solar industry. Like this right here, all this information that's in front of us. I mean these are statewide across the United States. You have to get into this. You have to be in the now to learn. There is no easy way on this one. This one, it's going to require some work and some studying just to get into it.
Heidi J Ellsworth: And Anthony, go ahead.
Anthony Romero: And the way we're helping our roofers is most of our roofers don't know where to get this information. That's how we're especially helping these guys is being able to send them these links, send them these articles and at least point them in the right direction and get them going. Like Eric said, when he started, he didn't have anybody to really point him in the right direction. He had to get in the weeds and really learn everything himself. We're able to speed that process along for these guys, because we know what path to lead them down. So we're basically a little handholding and showing them where to go.
James Mason: Actually, to jump in with Anthony, lot of handholding. Not to contradict Eric, but he's right. There's not a easy way, but there's an easier process. And that's come to ABC Supply. You've got us, you've got these guys, but we do training events for the roofers where we really do, we start with just informational sessions and then we progress them and we move them on. And since we started this process in 2017, we actually have quite a few roofing contractors that we've taken what we call soup to nuts, started them from nothing and now they are fully licensed solar contractors integrated into their roofing business. And so they have that hybrid that we're talking about where they can do the entire package, they can do the roofing and the solar, offer the warranty and they're growing their business and taking share and they have that bright future.
So ABC Supply can help you on the path too, but like Eric said, it's about having that growth mindset. This is a convergence of a lot of different industries and it's different for roofers for the first time. Roofing is sexy now, right? With the solar and the technology, and we are a part of the energy industry. Now that we can build an asset that can produce and distribute energy. We are a part of the energy industry, so it's bigger, it's expanding. But come to ABC, we can help. We can help get you started.
Heidi J Ellsworth: Okay, so that is exactly where I was going to go. And I want to remind everybody, please ask questions, make comments, anything if you're sitting there going, "I'm wondering about this, because this is what I'm always doing."
But to that point of what you just said, James, I think it's so important because there are so many solar companies out there who are approaching roofing companies every day saying, give us referrals, give us your leads, we'll work with you, we'll do all of that, that there is, I'm just going to say it, there's a little bit of a bad taste in everybody's mouth about solar. So how are you all getting past that? And I love what you just talked about, soup to nuts. You're just taking them from the very beginning and then we're owning our own destiny with owning the solar, owning the roofing. Let's talk just a little bit more about how to make sure that you're not getting caught up with bad actors and that you're getting to the right places.
James Mason: Yeah, well listen, Eric touched on it a little bit and I'll let the guys jump in because they're going to give you perspectives from all across the nation, but it's just the basics. One, the first thing is, hey, the first decision for roofers are going to be if you want to be involved or not. If you don't, hey, then do what you do. Give your referrals away, whatever you want. There's no wrong or right answer, it's just what's best for you and your business. But knowing the trajectory of where you're headed, if you want to be in business 10 to 15 years from now, you're probably going to have to engage at some point. And listen, I'll say this, there are some bad actors out there. There are a lot of good actors as well, people that are willing to partner. And so what I would suggest, just first, if you are a roofer and you do want to get in and you meet a [inaudible 00:29:47] contractor, do your due diligence on that person with technology, you can get reviews, you can ask them to some of their jobs, some of their customer referrals, so you can talk.
And if they're asking you for referrals, like to Eric's point, then that's an opportunity for you to partner with them. You're like, okay, if I give you a referral, you let me come out and bring my team and learn with you. I'm not going to tell people how to structure and run their businesses. But if you really think about it, it's probably an opportunity, if you give up a referral to learn something new or maybe try to form a joint venture or a partnership with a person that aligns with your values or how you go to market. So use that as an opportunity. It's not a bad thing, it's only a bad thing if you're just not aware. But if you're listening to this podcast today, hopefully we're turning the light on for you to see some opportunity, but I'm pretty sure some of the guys have some other insights of how they put together relationships and help people work through some hard places or some tough choices.
Heidi J Ellsworth: Yeah. I would love some examples. Rob?
Rob Smith: Yeah, so roofers, the roofing industry is a lot more mature than the solar industry. And with that being said, a lot of the roofers are very proud of the brand that they built, the company that they built. So they're very wary of partnering with some of these fly by night companies. But it happens in any trade, whether it's plumbing, roofing, construction, you always have some of those bad actors. So doing your due diligence, using local companies versus huge national partners. I can't stress the local level more than anything else. A lot of the local contractors are very willing to work with these roofing contractors and partnering up. When I was a contractor for 10 years, we did exactly that, was partnering with a lot of the local roofing companies.
And when we needed new roofs done, we would spoonfeed these roofers with those leads. And when they had interest in solar, they would spoonfeed the leads back to us as well. So it was a win-win situation for both parties.
Heidi J Ellsworth: That's excellent. That's great. Anthony, what's happening in Texas?
Anthony Romero: We're seeing a little mix of guys wanting to actually, they own these roofing companies. They have their name on them and they're not wanting to, I was with some guys just the other night that ,they're not willing to team up with anybody. They want to know how to do it internally and do it soup to nuts. So we're training these guys internally how to get it done, because like they said, we've been in our community for the past 20 years and I'm not willing to write my name on with another company or [inaudible 00:32:27] with somebody else. So a lot of these guys in Texas want to really grab a horse by their hays and take it on themselves, which is a little slower growth pattern for them. They're not going to get the floor running as quick, but the longevity is there for them.
Heidi J Ellsworth: Yeah. That seems like long-term is a great strategy.
Anthony Romero: Seems like slow growth is better than that [inaudible 00:32:50]. It's always that immediate growth that you're going to get out of it.
Heidi J Ellsworth: Especially with the demand that you're talking about in Texas. That's the long-term thing, it's not going to go away.
Anthony Romero: No.
Heidi J Ellsworth: And Eric, what are you seeing?
Eric Cieslak: It's interesting because, I guess, I think in regards to the roofing industry, since it's been established, most roofers that I've dealt with, it's gone on three generations. Some are four generations long in the industry, in their communities. These are people that know their neighbors, know the area, people know who they are. So it's well established. And I think in the solar industry, I mean, didn't really have many choices, had to go out there, do a lot of things, knock on doors, in the face of the homeowner and I did put people off. It was at first a good way of doing business. But eventually, I think over time and things that have gone wrong in the industry that affected the perception of solar. Again, to your original question, what was one of the big impacts? A lot of people looked at it as like, okay, I'm good. I'm good. Just read the sign. But doorbell, please don't come in, do not.
And I think now with the roofers and the partnerships with the solar companies it and getting integrated using word of mouth advertisement more, partnering up with a roofing company that's been established in a community for a long period of time, that is starting to see some success. And I'm starting to see more solar companies integrating their company into roofing and with that partnership with roofers or coming together and that is changing a lot of it, now they're going in and offering more than just solar. They're offering roofing, they're offering solar, they're offering gutters, they're offering sighting. And it's starting to become the more of the envelope of the system. So it's like what we call a one-stop shop. It's turning and it's changing, and I think it's getting better and better and people are being more receptive to it because they're starting to see familiar faces.
Heidi J Ellsworth: Yeah, yeah. And I mean when you have ABC Supply as a trusted source, all of a sudden now it changes. It changes perception and definitely for the contractors and for the industry.
James Mason: Absolutely.
Heidi J Ellsworth: Go ahead.
James Mason: No, I was saying absolutely. I mean, if we didn't believe that ABC could add value to this segment, we wouldn't be here. But we do see there's a lot of value and we see, like I said, that natural convergence of where we believe the market is going and we are the market leader and that's why we're here. We're here to help lead it.
Heidi J Ellsworth: Make it happen. Well, I want to talk a little bit about all the things. So there's a lot to think about when you are working in renewable energy and it's a little overwhelming. And so we've got this great slide here that's showing all the different things that are out there. Let's start with, you talk about the trainings you're doing and how are you helping contractors work through all of this and put it together. Maybe just give everyone on this call a taste of how to do that. Because I mean, you talk about incentives for batteries, you talk about incentives for the different solar panels. There's a lot of different things to be thinking about.
So you know what? Eric, let's start with you just, what are some of the things in your area as you're training people, having been a roofing contractor and then you look at all this, okay, this all has to go together. How is that working?
Eric Cieslak: I mean, ideally, first things first is pictures and hands on touching because you need to feel it, touch it, smell it, know what it is. I think a lot of roofing contractors, that's how we are. When I first got into it, I wanted to know how heavy a solar panel was. I wanted to know was on the bottom of it because I didn't know. I've only seen the top of it. So I wanted to know how does it connect? And then I wanted to see how the racking penetrations were in the roof. And that was one of the key things that I looked at because I mean, when I first started in 2010, I started seeing some of the penetrations on, no, that doesn't work. You can use as much caulking as you want on that, that's not going to be useful.
And so I think literally hands on. So one of the things we did was when we set up training events, we would get these vendors to come there and bring samples. And so the roofing contractors would see it, and then I'd be like, okay, so this is a little mini rail and had all those little attachments and we had a little tiny, tiny solar panel on it. And I'm like, okay, take it apart, put it together. And they would show them and then have them do it and then we'd have a little mock roof in the back and then we'd have them hands on, start installing, racking a panel, seeing how it's done. Because there is a lot of components, but it's nothing. I was to say it in the best, if you do a flat roof and you're doing what we call a single ply roof, the component list is gigantic and you really have to know every single little thing and it's daunting. So a lot of contractors, to get certified for it is a process.
So it's like solar, but I believe it's a little more condensed until you get down to the electrical side, when you get down to the breaker box and you start working with the actual integration of it, but at the top part, it flows with what you currently do as a roofer.
So I did a lot of analogies like, hey, when you do a pipe flashing, this looks like the same concept and do a bleeder sheet and do this and you apply caulking here and you got to connect to a rafter. A lot of the terminology was really quick to grasp for roofers. And the processes, it made sense. But at first, I mean when we first look at it, you're like, I can't do that. I have no idea what that is. I don't even know. My roof is 20 squares, so I've got 20 squares of solar? So you're like, you just have no idea. So the process of getting into it is a little bit different, but then the installation starts to be really familiar once you start comparing it to things that you do already as a roofer. So hands on, the hands-on was the best training for me.
Heidi J Ellsworth: Yeah, Anthony, I mean, when I'm looking at this, I guess keep looking at the EV charging. So we know the powers coming from that, but is that connected? I know that's probably a silly question, but when people are looking at all of this, how all is this happening? And with the big push in Texas, how are you talking to your contractors about all these different things that they need to be aware of?
Anthony Romero: So Eric, can you hit on the actual install side of it. What I'm also helping them on is solar and roofing. The industries run completely different while they're both still on the roof. Solar is a lot way behind where we are in roofing, and there's a lot of incentives or special pricing agreement. So just making sure I'm aligning my roofers and showing them how to go out and get that more aggressive pricing with our vendors and keeps it a little more competitive in the market. As far as the install side of it goes, it's pretty easy. Like Eric said, once they get their hands on and they touch it, feel it and install it, it makes sense.
That part of it's pretty easy. But just showing them, I think where the roofers were having trouble with staying competitive against the solar contractors in the market where they were getting beat up on price because the solar contractors knew how to get out there and be more aggressive with vendors and get those special pricing agreements. So I've been introducing these guys to the correct vendors and getting them spas put in place to keep them competitive in the market.
Heidi J Ellsworth: So it all comes down to relationships like it does every single day, right?
Anthony Romero: Yep. Yep. People buy from people.
Heidi J Ellsworth: Yeah. People buy from people. Rob, talk to us a little bit about your territory and how you're working, how you're bringing all this to the contractors.
Rob Smith: Yeah, I mean, hands on is definitely the best way to educate the roofers side of things, when I was over at City Electric Supply, a huge proponent of education and training that next generation of solar installer. Unfortunately, there hasn't been a lot of education for the next generation of solar installers. Just like Eric said, you just have to dive into it and learn it yourself. So during my time at City Electric, I was doing a lot of education for the electricians, the HVAC guys on how to get into solar, that hands-on training and continuing that same mission here at ABC Supply with the roofers. And I can tell you the roofers have picked it up so much quicker than the electricians and HVAC guys have, especially on the roof. I mean, they're used to being on there. And once you hand them the drill and start talking them through step by step, the process of taking that system apart and putting it back together again.
There's been a couple of different occasions where roofers got ahead of where I was on my presentation and they figured it out on the own in terms of the construction of the racking components. They're still a little bit rusty on the electrical sides, but you still need an electrical license to do that portion of the work. But everything on the roof, the roofers have really picked it up extremely quick. And we do have strategic demonstration roofs throughout the country where we are partnering with a lot of our vendor partners to be able to do those educational events.
Heidi J Ellsworth: And Rob, or do you see contractors hiring electricians? I mean as in hiring them into their business so that they have electricians who are working in their company every single day. Is that becoming more than norm?
Rob Smith: I would say it's about 50/50 right now. Some businesses that are a hundred percent all in on creating a brand new vertical for their business, they have sought out electricians to hire on staff and they're all in on building out a solar division for their company. And then you have the other side of it where people are still experimenting, trying to figure out if this is a good business model for them to add to their portfolio. So in those instances, they're finding electricians and just subcontracting that workout.
James Mason: And Heidi, if I could.
Heidi J Ellsworth: Yes.
James Mason: Just really quick, just a little teaser, because we're going to have to come back and do a podcast just on the-
Heidi J Ellsworth: Okay.
James Mason: You see the BIPV, the building-integrated photovoltaic. So something that's different from the last year we talked that we're excited about because this was specifically built for roofers, right? So the BIPV is going to be an easier transition to help roofers get into the solar. This was built by a roofing manufacturer designed for roofers. So it's actually a lot easier to learn it streamslines, a lot of the electrical components. And like I said, just a little teaser. So we'll talk about that, because we can't go down that. That's going to be a whole nother show because it's just rolling out right now. But I'm telling you, for those roofers who still see all this and go, "I can't do it. This is not for me." BIPV was made for you.
Heidi J Ellsworth: And you can see it right up here on the slide. I mean, it is pretty, it just goes right into the roof. It looks beautiful.
James Mason: It's installed just like a roof. So that's a teaser. So we're doing that on purpose, a little cliffhanger, but we'll come back and do another show just on that. But that was made specifically full roofers to help roofers get into the solar, and there's going to be a big space and presence for that. So excited about that.
Heidi J Ellsworth: Because I was just going to ask you, James, we're talking about all of this and you've been so involved in the bigger picture. What do you see as the challenges and the obstacles, going to your point, you were right there with me, we were mind melded, that remain for widespread adoption and renewable energies? What do we need to do to get this full adoption?
James Mason: Well, listen, actually, if you had asked me, well, you did ask me a year ago, I probably should go back and I have to stop myself. You did. I'm going to tell you, there's not too many obstacles anymore. I think the major one, I'm going to talk from a roofing contractor standpoint, it's just mindset. Okay? Get involved, get engaged, start. It's not this big esoteric pie in the sky. It's happening and it's happening right now and it's not too late. So it's just that mindset of I'm going to learn something new. It's okay, I'm going to make some mistakes. I'm going to crawl, walk, run, but I'm going to stick with it. And like I said, Heidi, the timing is perfect. There's incentives, right? There's policy, there's support now and there's framework coming together.
And so I'm going to go back to something I said, there's a lot of noise, but there's a signal. Block out that noise and pay attention to that signal and that signal signals coming from us. We are at ABC, we're hitting it out there for you. We want you to hear it, but it's a whole wide world out there for you. You're going to learn some things, you're going to have some growing pains, but I'm telling you, the upside is there. So there obstacles are real. There's some things that you're going to have to learn. You're going to have to get outside your comfort zone. So get comfortable being uncomfortable. But once you get through that, a lot of the other obstacles that existed before aren't there. They're just the same run-of-the-mill things. Just different things that you have to learn, a different way of seeing things. But there's been no better time with more support. So a lot of the obstacles are not insurmountable. They're really easy. But a lot of it is getting out of your own way, getting out of your comfort zone and just getting after it.
Heidi J Ellsworth: I think that is so true. And right now, it's August and I know everybody's like, wait a minute, don't rush the year too much. But now is the time when a lot of companies start doing their budgeting for the new year, start doing strategic plans for the new year, so 2025. So as contractors are looking at this and they're listening to this, okay, I got to get the mindset, I got to believe that this is where we're going. And they want to start putting their plans, strategic plans together for how they're going to roll out solar in 2025.
What are some of the first steps? And Rob, I saw you nod a little bit. What are some of the steps that you're doing working with your contractors to start them with these strategic plans to be able to start rolling out? And I guess I want to, sorry, I want to ask one of the question. Because it's one of the things like just go get training, go do these things. And I don't mean in that way, because I know that is crucial and the key, but there's also this time of sitting down and making a plan. Of not just doing it, but making a plan on how to launch it and how to roll it out. What are you seeing from contractors with that?
Rob Smith: Yeah, they ask a ton of questions, which is always the first step. And it is always awesome to have these conversations with the roofers and walking them through just the meat and potatoes of a system. What are all the various components that need to be installed, whether it's racking, whether it's the modules, the inverters and then all the ancillary items like monitoring the electrical balances systems and just walking them through step by step what all the different components are. And if they don't get overwhelmed at that point and they're ready to move forward a little bit further, then we started having strategic meetings with a lot of our national vendor partners and dive into the weeds with each various components. So we'll spend an hour or with just racking, we'll spend 30 minutes to 45 minutes on just modules, so on and so forth. And then after that, then it becomes the hands-on training. And once that's established, they end up having a lot more questions on how do we create proposals, how do we do designs? What about shade issues with trees, squirrels, pigeons, whatever the case may be, various issues that might arise on the roof that might come across depending on where you live and whatnot.
Heidi J Ellsworth: And what about cells and marketing? It's one thing to get trained. So Anthony, yeah.
Anthony Romero: Yeah, that's what I was just going to hit on. Before we even get there, the first thing they're asking is, how much money can I make off of this? What's profitability on it? What are margins? What do you typically seeing in the market? Those are the things these guys want to know before they even start walking down this road to see if the lemon's worth the squeeze. And once you open that up to these guys and the possibilities of the margins that are out there and the attachment rate, if they could add 20% solar to some of the roof sales and they see that dollar amount, they're like, all right, yeah, this is definitely worth the work to start walking down that path. And that's what I get a lot of questions on. That's the first question that I get from most of these contractors is how much money can I make off? Because that's what we're all here doing. And James talked about mindset. These guys are already of that mindset, because they have already taken a step, a leap of faith and went out and started their own business. So it's just adding to it. They already have that and it's just showing them the pathway down there to the renewable energy front.
Heidi J Ellsworth: Yeah. And when you're adding to it, are you seeing that contractors are bringing in all new solar crews or is it about training the crews that they have a combination?
Anthony Romero: Combination of both. And even subbing out too, because out here in Texas, the model out here is there's a lot of solar subcontractors out here. So a lot of these roofers, they sub out their roofing to a bunch of the roofers in the area. And we're seeing the same model out here is where these guys are going out doing the cell, creating the material, having it delivered and just subbing the install out to a crew. So we see a lot of that happening out here.
Heidi J Ellsworth: Who specializes?
Anthony Romero: Yes. And then there are the guys that I would talked about that want have total control of it, and they are going out and they're hiring guys. What I see most of, they'll hire a roof lead and then cross train some of their current employees that they have. I used to do training at Unirac for on the racking side. That's where I started in the solar industry. And I've always said this since 13 years ago that roofers made the best solar installers on the roof because you get an electrician who's used to working inside, you get up on top of a roof on a steep slope. These guys hate it. So I always said roofer's always made the best install. So it makes sense. If you get somebody who knows the solar side of it to cross train some roof guys. I mean these guys get up there and they knock it out of the park.
Heidi J Ellsworth: That's awesome. I love it. See? Own the roof. There we go. Own the roof. James.
James Mason: And Heidi, like you said, just to tie it all together, when if I'm talking directly to the roofers in solar guys looking to goes both ways. When you're sitting down and hopefully you are sitting down getting ready to do your budgeting and your plan for 2025, I just, hey, take that conservable approach, call, walk, run. You're not looking to try to change the world, but if you say, okay, in 2025, I want 5% of my sales to come from the solar or the renewal space or 10, nothing crazy. And here's the thing. Let's just say I'm full of it .and I'm totally wrong and this thing goes away tomorrow and that's not going to happen. 5%, you can make that up, but what if I'm right? Or what if we're right, which we are in this case. Now you're on the pathway and then that 5% can go to 10% and 15 and 20, like something Anthony said, slow, steady growth, done the right way.
It makes no sense to come out the gate and shoot straight up that turn around and burn out. And the saying, what goes up, let's come down. So like I say, careful, steady approach with ABC, with our partners and grow your business the right way and the future is going to be bright for you.
Heidi J Ellsworth: We're going to get real tactical here for just a second, but talk about, I'm a contractor and I want to start down this path. I want to sit down, I want to start working on my strategic plan. I want to put things together. I go talk to my branch manager at ABC. What's the path for them to get involved and really to be able to sit down with experts like all of yourselves and put that plan together?
James Mason: Yeah, I'll kick it off and then I'll kick it to my guys. But I'm going to say this to be transparent, because like I said, we're getting granular, right? Not every market may be right. Okay? So the first thing is one, do your due diligence and let's establish that you're in a good market. And if you're in one of those markets that's not good right now, just stay tuned, stay engaged. And it may turn, but if you're in one of those markets where it's going, then I would tell you your first thing is stop by your local ABC. And even if it's not that local one in your area, they'll get you one to somewhere in your demographic that can help you and they'll get you connected with one of the fine gentlemen that you see on the screen. There's outside salespeople. I mean there's a team and an infrastructure that can help you. And I'll just kick it to one of the guys now since I got it starting down the path.
Anthony Romero: Yeah, I think I could hit on to what James said, not every ABC branch out there is going to be a renewable energy branch either, but they will know what direction to point the contractor in. And most of the time it starts with me, Eric, Rob and then we get these guys walking down the right path and then we could pass them off and get them in contact with one of our associates that is in the renewable energy space and could really handhold these guys through the whole process.
Heidi J Ellsworth: And just real quick, you said something earlier that just top five states. What are the top five states for solar right now?
Anthony Romero: California, Texas, Florida or the top three? Right off the top of my head.
James Mason: I'm laughing, because I thought Anthony was going to start off with Texas first [inaudible 00:55:43].
Anthony Romero: I just went West. If I was starting off with the best. Yeah. And James, he said he misspoke earlier. He said something about California being the best state. We would disagree with that over here.
Heidi J Ellsworth: I was waiting you. Guys [inaudible 00:56:00] that just right by.
James Mason: Yeah, I was waiting. He didn't take the bait. I knew.
Heidi J Ellsworth: I know.
James Mason: Did we answer your question? I think we said [inaudible 00:56:08].
Heidi J Ellsworth: I think so. We got the California, Texas, Florida. I would say anywhere there was a lot of sun. Check with your local ABC branches, see what's happening. Get in front. And you can also go to abcsupply.com and see, go to the renewable energy page. All this information's on there. It's also ABC Supply directory on RoofersCoffeeShop. You can get all this information too, and we can get you in touch with these gentlemen on the screen so that you can start putting together your own strategic plan to bring solar and renewable energies into your business. Even if it's at 5%, it's 5% you didn't have before and it'll take long down the road. You're going to be very, very happy around this. So gentlemen, thank you so much as always. Such a pleasure and so much fun. Great information. Thank you.
Rob Smith: Thank you, Heidi.
Eric Cieslak: Thank you, Heidi.
James Mason: Look forward to coming back and talking about BIPV. Don't forget, that's for [inaudible 00:57:04].
Outro: Yes. Here it is. And remember, we're going to have these incentives on the ABC directory. There's the BIPV teaser for the next one will be there. Thank you everyone, and thank you ABC Supply so much for bringing this important. I mean, this is really the future of the industry. This is what's happening and I can't thank all of you gentlemen enough for really bringing it and making it happen. That's really what's happening out there. You're making it happen. So thank you everybody for being here today. Please remember, this will be available within 24 hours. And please share it, get it on demand. Let everybody know, and good luck with your strategic plan for 2025 to bring solar and renewable energies into your business.
Please join us in two weeks for our next Coffee Conversation. We're bringing the conversation, you bring the coffee and we will be doing this again very soon. Have a wonderful day. Thank you all for being here. Have a good one.
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