The world has an enormous appetite for energy – and it is growing. Yearly, 7.7 billion people consume 3,081 kilowatt-hours per person, on average, or an annual global total of 23 trillion kilowatt-hours.
As a relatively wealthy country, Israel consumes double the world average, around 6,000 kilowatt-hours yearly per capita, or a total of 55 billion kilowatt-hours. Much of Israel’s and the world’s energy comes from burning fossil fuels – oil, natural gas and coal – which wrap the world in a blanket of carbon dioxide and cause our climate crisis. Only about 4% of Israel’s energy comes from renewables, even though there are over 1.3 million solar water heaters, because of regulations that make them mandatory.
Electricity is relatively cheap. Households in Israel pay about 57 agorot (17.7 cents) per kilowatt-hour, compared with $0.15 in the US. That doesn’t come close to covering the indirect cost of the resulting climate crisis due to burning hydrocarbons.
There is an alternative to hydrocarbons. The Beatles sang it, in 1969: “Here comes the Sun!”
Consider our Sun. According to MIT scientist Prof. Washington Taylor, the Sun’s rays that strike the Earth every second comprise 10,000 times the world’s total energy use.
Ten thousand times! It’s free. It’s clean. And it’s almost forever. The Sun has shone for 4.6 billion years and will shine for about another five billion years.
So, where are the innovators and entrepreneurs who can harness the energy of our Sun?
I spoke to one, Eran Tal, co-founder of Volta Solar. His company is covering Israeli rooftops with solar panels that generate electricity and feed it into the grid. Here comes the Sun! Volta Solar has a unique rent-a-roof business model. I asked him how Volta does it.
The Report: Over 90% of start-ups fail. One of the main reasons is the lack of a business model, with focus solely on technology. Volta Solar’s main innovation is your brilliant business model: “Rent us your roof!” And a key component is your stressing customer service. How did you get the idea for this business model? And most important, what were the key milestones in implementing it?
Tal: Generally I’d say that pioneering and innovating are one of Volta’s key elements and core values, and it comes in all sizes and shapes. For instance, we were the first in Israel to use drone technology to photograph, map and render rooftops in 3D – to make it more visually accessible to customers and to let them give their opinion regarding the design. We were also the first to offer a production guarantee to our systems, that relied on cutting-edge production simulators and a strong in-house engineering backbone to give us the confidence to do so. The list goes on and on, and ranges from digitalization to automation of processes, hardware innovation (for instance in mounting equipment) and more. It also includes the SolarLease model you have mentioned.
We always take one of two approaches. The first is to look for inspiration in cutting-edge elements – products, technologies and so on – and then work our way to improve them from there. The other is from first principles, meaning to break problems into their core components and to reason up from there.
In the case of the SolarLease model, we took inspiration from other markets such as the US and worked our way up, pioneering it from the core fundamentals of the Israeli market (i.e. regulation, financial models, infrastructure, funding architectures and more).
As for making it happen, the most important thing is to make something, start testing it with real-world conditions (i.e. customers, regulators, financing partners and so on), get feedback and improve upon it. The goal is to move fast, work in closed feedback loops, and reach product-market fit. In other words, to sculpt the product or value proposition to the point where there’s a bunch of people (a market) who love it and want it.
Another strong reason for start-up failure is the failure to pivot, to shift strategy in response to rapid market changes. You have signed two strategic collaboration agreements – with Synergy, which does large-scale solar power generation, and EDF Renewables, a subsidiary of the French energy giant EDF. In addition, you signed an agreement with Union Motors and EV Edge for possible recharging stations for electric vehicles. This could be a pivot. US President Joe Biden’s new $1.5 trillion infrastructure bill allocates funds for such charging stations throughout the US. Do you see Volta leading this infrastructure in Israel?
The short answer is yes. A longer one: I believe Volta can be a significant player in the Israeli market for renewable energy, producing solar energy on rooftops, integrating storage and electric vehicle charging infrastructure with our partners. I had the vision already in 2012, but I had to wait until the time was ripe (in 2017). It is something that we as humanity should strive for and push for, and Volta is driven to do so in the most customer-oriented fashion possible, along with an innovative approach and operational excellence.
For the past 21 months, Israel and the world have grappled with the corona pandemic. One consequence has been to seriously disrupt supply chains and imports. How did you deal with the disruption that the pandemic brought?
Our vision is to make Israel into a country where most of its energy comes from the Sun – through rooftop panels that turn the Sun’s rays into electricity. When we saw what was happening in China [with corona], we organized daily evaluation sessions to track our supply chains and ensure we are prepared for any eventuality. Quickly we understood that a complex event is unfolding that demands creative solutions and organizational changes to survive. We decided to turn the coronavirus lemon into lemonade and to regard the crisis as an opportunity. We were designated as an ‘essential industry’ and gave our workers a message of security, transparency, optimism, responsibility, and mutual care. We adapted all our client services to video-call format for both new and existing clients. We hired dozens of workers, reinforced the teams installing solar roofs on private homes and commercial buildings. We reinforced our cooperation with our partner, the Israel Electric Corp., and pushed them to improve their digitalizati
on and the efficiency of the process. And we arranged to double our monthly production.
A significant moment was the strategic deal with Synergy, a sister solar company that focuses on large-scale projects. The need to respond, change and cooperate in such circumstances can drive empowering processes in any company. In our case this move greatly strengthened us as a significant player in the field. The pandemic showed us all that Nature is the one controlling our planet. Activity in this field [solar energy] is my way of making a positive impact on this world, for a cleaner and better future, for our own sake and for future generations.
Ports all over the world are clogged. Containers are in short supply. Supply chains are in tatters. How have you managed to maintain unbroken supplies of solar panels from China?
One key is building good relationships with our suppliers through communications, mutual feedback and so on. Another key is forecasting and planning. Good predictability along with the ability to make sound estimates even in cases of uncertainty can assist you in weathering storms. Lastly, it is is having a flexible mindset and organization, to be able to change designs and engineering, and to adjust to what’s alternatively available in case of certain shortages. All of these help in smoothing production in high seas.
You had a strong business background, prior to establishing Volta. Even while doing your B.Sc. at Technion, you started Barbarossa Bar & Restaurant, in the Jezreel Valley. You headed ClicksMob, a mobile performance network, and were the CEO of Empire Media. All this, while serving as platoon and company commander in the IDF tank corps – and raising two daughters with your wife. What role did previous businesses and IDF play in your start-up venture?
My years prior to Volta, ranging from local food and beverage to global hi-tech, were the best real-life MBAs I could’ve asked for. My years in the army reinforced my stamina, tenacity, grit and leadership capabilities. Building a company could be very challenging and requires every bit of strength and help one can master.
What is your plan for scaling up Volta, and possibly implementing your model abroad?
We still have a lot to do in the Israeli market, which needs to grow in more than 10 gigawatts of installed solar capacity only to reach our current target of reaching 30% of energy produced from renewable resources by 2030. This doesn’t take into account the additional storage we’ll need to install, and honestly, 30% is way too low and not enough, and will definitely grow. So there is a lot of room and plans for growth here. That said, we do believe that Volta’s models and operating system could expand our impact in other markets, so we’re looking into making our first steps on that front too.
What advice would you give to young entrepreneurs, eager like you to change the world?
Strive for the convergence of ability and passion. Identify what you are good at and focus on it – with the hope that you will also enjoy it! Strive to build something or help someone you feel strongly about, for the value it creates. Dare and be bold! And work insanely hard! Things do not happen without putting your blood, sweat and tears into them! ■
The writer heads the Zvi Griliches Research Data Center at S. Neaman Institute, Technion, and blogs at www.timnovate.wordpress.com