Automated solar asset management has become increasingly necessary as the solar industry grows. After receiving an award from DOE’s SunShot program, Ra Power Management (RPM) has developed the industry's first technology platform to improve the financial and operational management efficiencies of third-party-financed solar developers.
Through a conversation with George Zviagin, founder and CEO of RPM, Clean Energy Finance Forum learned how this software can reduce soft costs and increase profit margins for solar developers.
CEFF: How does the software work? What makes RPM unique?
Zviagin: We are the industry-first technology platform for financial asset management, which provides a scalable system that creates contract proposals, manages fund deployment, and generates customizable reports and analytics.
RPM is a SaaS (Software as a Service) platform that automates the process of deploying and managing the billions of dollars of solar assets.
Developers can create any financial structures themselves in the software through the online web platform. RPM can help allocate and manage the transactions as well as the downstream reporting and analytics.
Through effectively generating performance reports for investors, RPM can also help retain and attract more capital for solar developers.
CEFF: How did you come up with the idea of the company?
Zviagin: I had been working on solar asset management development in SunRun and SolarCity for years. In SolarCity, I realized the traditional manual way of solar asset management was not efficient at scale and that Excel was not a viable long-term solution to managing a large and fast-growing solar portfolio.
It is necessary for developers to have an infrastructure to manage the data and automate the processes once we reach scale. The founders of SolarCity did see the values of such automation. The project-finance investors also gave me very positive feedback about having such a software help with tracking the performance of the developers.
So I decided to go out on my own and build an integrated asset-management software platform, which the industry needs for efficiency at scale.
CEFF: What problem is the company targeting?
Zviagin: We mainly target three key problems for solar development: the biggest problem is that the financial operations are not effective at scale. Currently, the leading solar developers have financed over $21 billion dollars’ worth of solar systems in the United States, which are managed manually. Such manual work may lead to lots of mistakes behind closed doors.
The second problem is the limited capital for solar financing. There are very few repeat tax equity investors. We hope to attract more capital and retain the existing investors through presenting the solar project performance.
The third one is the high cost of capital for solar financing, which has heavily been financed by tax equity with 8-14 percent internal rates of return. As securitization is a more effective way for solar to get a lower cost of capital (around 4 percent), we need some infrastructure to facilitate the transaction of securitization, meet the high-level due diligence and evaluation, and eventually make the developers to be more profitable.
CEFF: How has the software been received?
Zviagin: We released our software two months ago and have already had several developers on our platform, both domestically and internationally. We currently have over 150 MW under management, and we have a big pipeline of customers to get their way on board.
We have also been engaging with almost all major solar developers for a year now as part of our customer feedback program, which is a requirement of the Sunshot program. We gathered in-depth feedback to ensure we build solutions that are custom-tailored to what our customers need.
CEFF: How does the government SunShot program help?
Zviagin: We received $500,000 grant funding from the United States Department of Energy (DOE)’s SunShot program. It has been a tremendous help to us. We would not able to be what we are now without it.
It is very hard for solar software startups at their early stage to raise capital. Although we were able to raise an initial seed round last year from several industry leaders, it was still challenging to catch traditional investors.
The SunShot program saw the value of our software. It is specifically important that the program funds early ideas before there is an actual product in the solar industry.
CEFF: What do you think are the other important aspects to reduce solar costs, especially soft costs?
Zviagin: I think there are mainly three aspects.
The most important one is to reduce the cost of customer acquisition. Right now, it costs $3000-4000 to acquire customers, and that’s too expensive.
The second one is to streamline the permitting process. For example, Germany’s permitting cost is at a minimum scale compared to United States.
And the last thing is to increase the operational efficiency on the installation side. Currently, an individual team may solve only one system a day, but it is important for the team to schedule and execute two to three installations per day to increase the efficiency and lower the operational costs.
CEFF: What do you hope the company can achieve in five years?
Zviagin: In five years, we hope to help attract more financing capital to solar developers, lower the internal cost of financial operations, chart the course to access lower costs of financing through securitization, and bring more transparency to the industry.