Daniel Sullivan | Crain's Los Angeles

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Daniel Sullivan

Background:  

California-based Sullivan Solar Power, which has offices in San Diego, Riverside and Irvine, installs high-performance solar panels on residential and commercial buildings.

The Mistake:

While I was hyper-focused on doing things correctly and training people to get them the certification they needed, I failed to notice that the rest of the industry was racing toward the bottom on price and quality. People are selling on price with no training, and they’re eroding our market share.

I thought I was venturing out to create a business that provided renewable energy to my hometown, but I learned, years into it, that we were building an industry that was working to undermine the incumbent, which was the fossil fuel industry.

That in itself was a little unnerving when I learned how entrenched and powerful these interest were. I learned not only how powerful they were but also how focused they were on undoing the movement toward renewable energy.

In recent times, there have been a lot of entrants to the industry who have seen the successes of the early companies and rushed into the industry to try to make a buck. In doing so, they’ve watered down the credibility of the industry. There are almost no barriers to entry in this industry. The result is that we have a relatively nascent industry going up against a very focused opponent and we’re doing ourselves a disservice by not having barrier to entry.

We are a C-10 licensed electrical contractor, which was the classification we went for when we started the company. This means that we are required to hire electricians to install solar panels. In the state of California, you don’t have to be an electrical contractor to install solar-powered systems. A company with a C-46 classification can hire anybody – somebody who was a bricklayer last week and is a solar expert this week. You have people who are installing systems that are 600 volt DC solar generators on their most valuable assets – their homes – and they don’t have any testing or certification to ensure that they’re doing it correctly. A lot of people end up with systems that are underperforming, their roofs are leaking, they’re not passing inspection, and their systems aren’t lasting long.

There should be tougher licensing and certification requirements.

The Lesson:

If I could go back in time and do something differently that would be beneficial now, I would have worked to get the California Legislature and local government to understand that we need barriers to entry when we’re talking about building an industry that will displace how we get energy. There should be tougher licensing and certification requirements.

The fossil fuel industry doesn’t like solar, so they’re constantly trying to get things in place that would undermine the industry. We have been engaged in legislative efforts in Sacramento on behalf of the industry, and gone to the Public Utilities Commission and done the same thing there. In 2012, we introduced legislation that would have added additional layers of protection for solar producers from utilities attempting to undermine our customers’ investments. There are diverse interests at play.

It’s hard to see through an effective salesperson’s sales pitch, and most homeowners don’t do a lot of research either because they don’t know they need to do it or because they don’t have time. For a long time, the solar industry was viewed with sweetheart status in that solar energy was the wave of the future and was great and everybody loved it and it wasn’t heavily scrutinized. It secured a fair amount of trust, but that good reputation has been squandered. We need to press the reset button on San Diego so they know who they can trust.

Sullivan Solar Power is on Twitter at @SullivanSolar.

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