Listen to why Sahil believes Auckland businesses are stronger when they grow together - Chamber Business Podcast with Sahil Chand of Solar Hub

Welcome to the Chamber Business Podcast. I'm Simon Bridges, CEO of the Auckland Business Chamber and here each and every week I talk to a business person about their business and what makes them tick. Same basic questions, but some very different guests. They all have their own unique take on business in New Zealand. I know you'll enjoy it and heck you might even learn something to help you on your own unique business journey. All guests are proud members of the Chamber but whoever you are, member or not, sit back, relax, come along for the ride. Because of the Auckland Business Chamber, we're here to help. We make it easier for you to do business. Today's special guest is Sir Hel Chand of SolarHub. A welcome to the Chamber Business Podcast, Sir Hel. Thank you, Simon. Pleasure to be here. Hey, now I know a bit but obviously not everyone will. SolarHub, tell me a bit about the story of SolarHub. I think I'd like to say you're dead, founded and you've grown from strength to strength from there. So the company itself was founded in 2021, Humble Team of four. It took us about a year. We scaled to over 100 based in New Zealand when nationwide in a year as well. So that solar energy, residential, commercial and solar farms. Shortly after that we did scale to Fiji. So we opened up our SolarHub Fiji branch and our SolarHub Pacific. Prior to say in Fiji as well, we are the largest solar company there as well. Fantastic. And you know, what we're talking, we're talking panels on builders, on houses, on, give me a sense of some of the sort of projects we're talking about here. Cool. So all across the board, residential solar which is for the everyday Kiwi, solar panels and battery technology fully installed at your property. Commercial solar working with businesses such as Hilton is one of our clients here, mega foods down in East Tabaki, installing solar for them and helping Kiwi businesses reduce their overheads, their opics, get them down to a very good spot with their saving monthly consistently with a good ROI point as well. And solar farms as well. Most recent project for that would be our one megawatt solar farm, helping dairy farmers across seven sites in Christchurch. And obviously, you know, listeners and myself, we have a sense of the value proposition here, but you know, it's sustainability is doing the right thing environmentally, but what you're telling me is it's also in a hard heated sense, got a logic to it, a random saving you money over time. Correct. Yeah, I think when you look at the everyday Kiwi, you come across two sets of customers. Number one is the environment based person. They really value the future of New Zealand. What does that look like from an environmental standpoint, being a nation that's so proud of our environment, the greenery, the scenery that's around. Then the number two is the cost base person. Now the cost base person looks at the numbers in a very intricate way. So with any solar proposal that you get across the industry, you have a ROI point, which is at what point does the savings pay off the system value? What is my monthly saving amount? And what is that reduction? Usually when I talk to any of my commercial customers, I always say two things, which is how much can we save you and what can you do with that money? Fantastic. You will see our chief operating officer. Tell me what's that look like on a normal day or an abnormal day or any day? Okay. A normal day for me is with cut sales standards, etc. We talk to a bunch of customers every day slightly different. You do have the odd cases where things are a bit more tough for there's a technicality in a project. When you look at my role, two factors, the marketing sense of it, which is how many leads do we get then what does that conversion rate look like? Are we operationally more efficient? And what can we do to improve the business to become quicker installing, faster installing and maintain the quality while looking at every installation? What is that cost to acquire customer and convert them into an installed customer, which is right at the end of the day after care? If you think about, you know, when we give Z to me going from a hand full family, fundamentally three or four or five, whatever, north of a hundred, a big business. I know you're a sponsor of walking football clubs, for example, and you know, prominent and a bunch of other things, advertising, marketing, all that. What would you say? What's been? What have been some of the keys to success? Has it been lots of sweetened years? I presume it has, but what have been the smarts that you'd say have really over just a very small number of years Skyved you up? Great question. I think fundamentally it comes down to something I direct to say is which is how fast can you get to a customer? How fast can you convert them and how fast you can install? I think that's been one of our testimonies to success. Second thing is having a great enough engineering team where a problem becomes not a problem because they think creative enough to adhere to it. So a simple example is, let's take Ponson B as an example. We've got a lot of old roofs there. Can we be creative enough to install solar car ports? We still get the benefit of solar, but your roof can't sustain the weight of the pressure on it. I think that's number two. And I think number three Simon is adapting to the current market. I think it's prevalent to say that AI is one of the things that has been taking over the business industry for efficiency in a range of other things. On a weekly basis, we have a meeting on what is things we can do better to adapt to the market and what's happening across not just New Zealand, but internationally for a lot of organizations. So in our company, we have adapted a lot of that internally. So you guys are very, I don't know what we're doing. You're restless in a way. You're every week, you're looking at how you're getting better for the customer and you're engineering, right? Getting your market facing stuff. Right. Are you using AI? Correct. Very prevalent in the across the whole world. What would be some examples of what you said a domain of that question? Yeah. So twofold, the course and two side of it, which is when a lead comes in, you have a customer facing opportunity to contact them. Now that still exists because not every key we like say, when I talked about speed, that's where AI comes in. So in our company, when you do submit a solar hub lead, the first point of contact within 10 seconds of the lead coming in is a AI voice agent, Olivia calls the customer, qualifies the customer, books it into our calendars and also auto manages our CRM. That's number one. Now across our marketing face as well, whether it's data analytics, dashboards, trying to find out which segment of the market have the highest attrition rate? AI actually analyzes dashboards, reports back to us without internal agent that exists. Brilliant. Well, that's really sounds and impressive. What would you say in a, put it down, me put you on a spot, what can you think of things along this business journey that you guys have, you've got wrong, you've looted from, say, that didn't go that well, we had quite quickly. Well, maybe there's examples from what you're talking about and whether it's the engineering or the client facing stuff where you were doing it one way, but by changing it up like this, it means you were doing a much better job for the business. Great question. Learning's along the way. I think number one is operationally. The sales portion, just like any other company you're selling, B2B, B2C. It's something where you have talented people that understand the product and they're able to convey that good enough to the customer. I think the most important challenge you'll see across the industry is twofold. One is internal operations, which is solar is not as basic as just saying, here's your system, here's your panels, let's get it on the roof. There's compliance to it. Compliance being your network lines company, making sure we submit that application as quick as possible. Number two is you meet a switch to make sure the meter at the property is switched to a smart meter, which monitors import export when you're generating extra energy. I think the next fold of it is the markets come a long way. If you ask me what was solar like five years ago and what it's like now, I can go to any individual that reaches out to a lead format to solar hub and say, this is solar, they have a sound knowledge of it. I think before the challenge was educating people on understanding what are the benefits, why it's important, what is that cost outlay, what does it look like? I think the market, the industry's done a great job and businesses like ours have done a good job to educate the everyday QE on the benefits and why you should choose solar energy as a whole for your property. I've even done my homework on this. My sense is you guys would be one of the biggest players on the side of the market. Would that be fair? Fair to say. There's a good three or four of us which are operating at a larger scale nationwide. We do have local installers and local companies that exist in every region as well. Do you feel like I sometimes feel like, the cost has come down so much, the technology has got so much better at a high level. It feels like it's sort of a no brainer and yet the rate of adoption somehow across our households, businesses economy could be higher. Is it at the barriers and the things that get on the way here? Yeah, absolutely. Yes, year on year, the adoption rate of solar does increase. That's fair to say. One thing that is a bit of a barrier for everyone as finances, right? Today's economy, disposable income, paying it now. Correct. More than theoretical, but let's say theoretical savings over time. So, justifying to a consumer, the savings portion and what they save, most of the time they are 100% to 90% sold. The key factor is the upfront cost of the system which has come down, but not every household is the same. In our New Zealand market, we do have green loans which exist, which every bank between zero to one percent borrowing anywhere from 50 to 80%. for any sustainable improvement. From an economy standpoint though, most people have probably noticed it. Your house's CV has come down. Now, to qualify for a green loan, two factors, one is the assist, your financial ability, number two is do you have 20% equity in your property? Now, as you had it before, but that CV came down and that's dropped below the threshold. Any solar company that sells a contract on a green loan, if you don't qualify for that and you don't have an income, it's basically a customer that's convinced wants to make the change, but they can't make the swap because there's a financial constraint. I was going to ask you this later, but I mean, if you think about the business environment, and I'm not necessarily saying it will be political here, but you know, going to election coming up, what do we, what do you feel like would be helpful to make a better environment, business environment for, not just solar hub, but the solar industry. Is it, are you mentioned costing compliance, why it's easier as you stop there, or is there other things you think, this would help? I think a standardized process and processing time for distribution generation applications, which is the first application most solar companies should file to your Lyons company, basically saying, "So Simon, if I sold you solar, your property is going solar, you're exporting back to the national grid." So making sure that there's a regulatory processing time around that because that can differ. And it is something that's outside the control of anyone in the industry, but from a customer facing standpoint, if there's a delay, it does impact our reputation. I think number two is, with most elections, they come as a set of policies that everyone is talking about, and they're saying that we're going to potentially introduce X, Y, and Z. From a solar perspective, when, when anyone in an election time makes a statement in regards to solar energy or a subsidy, so if you look at our neighboring country Australia, they have a really cool subsidy up there, so I believe it's every one or two and three households have solar there. The attrition rates through the roof. Making those statements a great, it can benefit solar companies, but what it tends to happen is when we do make statements and subsidies, it does create a ambiguity in a customer's mind saying, "Should I go ahead now? Should I wait?" Yeah. But like the old Tesla stuff, right? We're going through the roof. Everyone wanted one. Everyone got one. They read very weird and in Auckland, we were talking. Pull that away and then people don't want it all day. I wonder if the sort of fuel crisis we're seeing at the moment make it people back into it. You are, I'm going to be cheeky. I don't normally, you know, it's not politically correct to something to ask people's age, but you are a young guy and really I'm a really impressed. You're all over this. Can I be cheeky? How old are you? I'm 25 turning 26. Outstanding, Prime of life, and I've got a big business future. I just want to, I suppose the question is, you're ambitious. You're clearly ambitious for, you know, the sector and solar hub. How do you see the future for solar hub? Great question. I think if you take the ambitious side of it, you said it rightfully so. I think being successful in solo, any endeavor I intake is quite important to me, leaving a legacy behind. Now, we talk about solar hub. Very similar to why we became publicly listed. As having the largest commercial solar asset portfolio through a finance program called the PowerPurchase Agreement, is the future of solar hub. It's a bit of a bold statement, but that's exactly what we envision ourselves doing. So, let's pal that out for me. I think I understand, but. Gotcha. So, you just power purchase agreement. Correct. I have a, I have a bit of a sense of it, but that's, you're saying that's where it's got to be for you guys. Correct. For long term sustainable reoccurring income, but in simple terms, a power purchase agreement is essentially, let's say Simon, you're on a factory, you're paying $0.30 per kilowatt, right? Solar hub would install the system, maintain the system, and look after that whole journey. What would do for you is say, at this present point, you're paying $0.30 per kilowatt, we would invest in that system. We would tell you your next, every single unit of energy generated through solar, we would charge you anywhere from 30 to 40% below your prevailing retail rate for a locked duration of a contract. So, most of the PPAs we do, because we do do this in solar hub, are through external finance companies, which are majority based in the United Kingdom or in Australia. So, essentially, they come to their everyday QE business, they pitch them solar, reduce their opix from day one, they don't have any capital outlet, we maintain, we manage, all you do is pay for every unit of energy generated from solar energy at a lower rate than your current retailer. Yeah, fantastic. Yeah, I think that's great. Well, we won't go down the rabbit hole, but I just, yeah, I feel like, whether it's conservatism amongst New Zealand businesses, and also some barriers, okay, and it's amazing, we don't see more of any of this. How has the being publicly listed experience been? Is that been a, is that been a, you feel that's been the right thing to do? Great question, two fold-ons of you. It was a great journey, great understanding, especially coming from a family-owned business, taking it to that extent. We were probably proud of it. I think certain economic factors in terms of consumers' disposable income, economic security, like, no one really knows what could happen. I think that does impact the public markets a bit, with things recently going on, but all in all, I think it was a great experience. It's still listed, doing relatively well. We've got cool strategies coming out to see where we can take that next. But I think when we decided to go publicly listed, and I'll keep it quite short, the whole objective of it was to give the everyday key we are opportunity to invest in something that's bigger than just, here's your return, and this is the share price. We would be truly building New Zealand's economic solar future. And all of that capital raise in the public market was fully directed to the PPA side of the business. Fantastic. You, your family, we know that we know that business ideas may be even the inspiration to come from. Great question. I think if you stem it back down to day one, which was, as it's publicly known, it's a family-owned company founded by my parents. My mom and dad, your education, Singita. So, very humble beginnings. Dad was born in a village. One thing was very clear, the ambition to win, succeed, and get your whole family out of the situation that they're currently in. Now, as it pertains to solar, funnily enough, it's not like we were in Fiji saying, "Hey, solar energy, this is the future, let's do it." Our background, or dad's background, was in energy through mobile. And then he went there at Pulse, and Mercury energy is gone. Then he did a full swap when he started seeing what was happening to the environment. Obviously, the economic opportunity to adopt solar in New Zealand. That passion grew seeing what was happening in the environment, seeing the opportunity that was in front of them. And I think more than me, he is definitely a lot more passionate about the environment. And his journey to even take it to Fiji was seeing what's happening there. Now, in New Zealand, we're about at a 95% renewable energy creation. So, we use about 95% of our energy comes from renewable sources. Fiji is less than 30% of my math than my stats is correct. So, taking it there, building it here, and creating something that you can be proud of. I think business in general, you're not in it not to make money. I think everyone wants to, at the end of the day, have a good bottom line. And that's true and behold, across all of our businesses. But solar hub in general is a bit of a passion project. And it has a deeper meaning behind why we do it as a family. And so, when you look at your old man, you did, what's his superpower? What do you think, you know, he's formed a, let's say a significant company here. What do you take from him? You say that's something really awesome. I need to do that. It'll be more like that. Great question. I think there's three statements he makes to us and he taught me very young words. You share, learn and succeed together. You're only as strong as the team you have. And the team that's in front of you. And if you have a team that's in front of you, and if you have a team that sees the vision and sees the bigger picture, sometimes it's not about salary, sometimes it's not about my future. It's about what we're going to do together. Now to answer your first question, I think what makes him and my mom so successful is being delusionaly optimistic, abundantly creative, and have a desire to win because of the circumstances you were born from. And I think those three principles across our group of family companies are the things that we look at, no matter what we do. Practicing. He was born in a village in Fiji. Yes, correct. I asked where it's what a story. Well, let's go to some quick fire. I'm guessing you 25 and you're prime. Do you have work life balance? Are you getting out there and having some fun as well or has Dad got you, Mum and Dad got you working all day and night like Raymond over here? Fair enough. I mean, finally, I'm going to give you two sets of it. I'm all full work life balance. I think work life balance is overrated when it comes down to the fact of what you want to achieve as an individual. For me personally, if you're asking me, do I care if I work 15 hours or 20 hours a day? Not at all, because I know what the end goal is. And there was one quote that I always lived by was, don't rest in the middle, rest at the end, which is once you're pursuing something that you really want to achieve. There's no if buts and maybes. And there's a theory I talk about, which I tell you. to any of my sales team is the theory of absolutes. If you believe you're going to do something, do it. Don't say maybe what if this could happen, speak in absolutes. So for me personally, work life balance is not something I look at. You got time for it later. Yes, maybe at 30 or 35, Simon, when I get up there. Yeah, well, you know, that still sounds young. That still sounds fantastic. You know, it's, you know, it's subscribed to what's there quite, there's something like, you know, they say working doesn't kill you, but I say why take their chance. Yeah, that's not my motto either, by the way. And, you know, what about, so, you know, and the rear occasions, when you're out there having fun, what does that look like? What are you doing with yourself? The honest answer for you is as long as I'm around my mates, of course, a couple of drinks, having a great time, maybe a nice barbecue, great conversations. I think that's where we tend to do a lot more. I think that's a perfect, ideal night. A perfect, ideal day is golfing. Fantastic. Have you got a handicap? Oh, it's not great. If I say it right now. No, I don't want to say don't need it. If you don't want to be, I don't want to discriminate. I'd like to be honest about maybe like a 25, a thing last I checked. Oh, that's, that's, well, that's better than mine. That's, which is non-existent. What about like, you got an ultimate holiday? Is it, is it swimming in Fiji? Would it be, I don't know, would you be somewhere else even more exotic than that? Love islands. I mean, being born in Fiji in a Pacific lad. I think Maldives probably, not there for me. Something like that. Yeah, that sounds very good. Well, I've been there. I'll put it on the bucket list. And look, NLGChance to say something nice about the Chamber. We always push for compliments here. Why are you an Auckland business Chamber member across a number of businesses I might add? I think it all stems down to connections, their ability to meet people and learn their story. And I think every BA5 event I've been to and at the honour of even hosting is just understanding people's background, what they came from, what they're doing right now. And it's their common synergies for us to mutually benefit of each other. I think the Chamber does a really good job of exemplifying those key things, connection based, community based, and building businesses in Auckland to be bigger and better together. Fantastic. How would thank you so much, Jesse. I feel like, I feel like we're going to be able to look back at this and say, we had him on before he really hit the big time. Because I'm in spy, you're a guy on the move and I really look forward to seeing how it goes over the next few years. Let's be great having you on the show. And thanks to all out there who've been listening. You've been listening to the Chamber Business podcast. You can listen to our backlog in a future episodes on Spotify. Talk again soon. (upbeat music)