The Solomon Story

Solomon Energy helps its clients reduce their utility bills through solar and other proven and reliable alternative energy solutions.

We are neither consultants nor contractors. Unlike these other professionals, our clients do not pay us for our advice or our products. Rather, we help our clients, at no cost, analyze potential energy-savings solutions. We get paid only if we are successful. In this way our interests are aligned with those of our clients. Our clients are under no obligation to proceed with an energy savings project. At any time they may decide, in their complete discretion, to retain the status quo.

To understand why Solomon Energy exists it makes sense to look back at our history: Where our founders came from, what our clients want, and how we have dedicated ourselves to be the “go-to” energy resource for municipalities and large commercial property owners.

Background. Solomon Energy was formed in 2011 by veterans of the dirty energy industry. In prior careers the company’s founders worked with companies engaged in the financing, production and distribution of coal; crude oil; and natural gas. They worked with transportation fuels like jet fuel and gasoline; refined products for heating and manufacturing like residual fuel, kerosene and heating oil; and key components of chemicals, plastics and gasoline such as propylene, ethylene, ethane, and butane.

The founders of Solomon Energy decided to move from dirty energy to clean energy, from fossil fuels to renewables and new technologies that reduce energy consumption.

As experienced energy market professionals they understand the need for fossil fuels. But they also understand that affordable alternatives exist today that can help their old energy clients reduce their costs through lower consumption.

Why Fossil Fuels? Much of the world depends on these carbon-based fuels. They make our lives more productive and, well, livable. Without them we would heat our homes with wood. We would plow our fields and reap our harvests with the brute force of man and beast. We would use horse power to transport goods across the land and the wind in our sails to carry us across the seas. We would eat our meals out of pottery thrown by hand while our clothes would consist of animal hides and natural fibers. Our daily lives would be regulated by the rising and setting of the sun.

For hundreds of years fossil fuels have been the lynch pin of modernity. By making our work more productive they have freed us up to engage in other activities such as education, entertainment and sports. They have permitted us to travel far from where we were born. They have provided the power to fashion tools with which to build, to manufacture, to improve our health.

Unintended Consequences. Yet fossil fuels have brought unintended consequences.

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  • As commodities they are subject to rapid changes in supply and demand. This, in turn, can have an impact on prices, the ability of businesses and homeowners to pay their bills, and on the stability of entire economies.
  • The burning of some fossil fuels such as coal and products refined from crude oil emits sulphur dioxide, a major pollutant that causes smog and in heavy concentrations such as we see in Beijing and Mumbai today can cause respiratory illness.
  • All fossil fuels emit carbon dioxide on burning, contributing to the greenhouse effect that traps the sun’s rays, raising atmospheric temperatures that can impact growing seasons, ocean temperatures, and weather.
  • Drilling for fossil fuels can release methane (CH4), the principal component of natural gas, which is approximately 23 times more impactful than carbon dioxide on atmospheric temperatures.

Lower Cosumption; Volatility. The founders of Solomon made a choice: Instead of working to increase the consumption of fossil fuels they decided to help large energy consumers decrease their consumption. They determined that they could accomplish this objective by helping their former energy clients adopt renewable energy alternatives such as solar and wind as well as implement energy efficiency technologies such as cogeneration and LED lighting.

They also realized that turning to alternative energy sources would help their clients mitigate the volatility of energy prices. After all, being 100% dependent upon utility pricing exposed energy consumers to market pricing. It is not that utilities are gouging consumers: Indeed, utilities do not profit from energy prices; their own returns come from their fixed assets and are subject to regulatory oversight. The price of electricity is determined by supply and demand forces, not by the utility. Demand out of China, which can increase the price of crude oil and indirectly affect other energy markets, plays a more meaningful role in energy pricing than a utility in, say, Chicago.

However, because utilities pass through their energy costs they have no incentive to help mitigate cost increases. If market prices go up because of supply and demand forces, consumers will pay more. Therefore, by investing in alternative sources of supply an energy consumer can help to lock in that portion of his or her energy costs, avoiding unpredictable future pricing.

Typical Approaches. By 2011 a number of companies existed to help energy consumers rein in their costs and control their volatility. These companies fell into two categories:

  • Consultants. Companies like Navigant that helped their clients manage their energy costs and charged a fee for time and materials spent on the consulting engagement.
  • Contractors. Companies like Johnson Controls or Honeywell that sold products that helped reduce energy costs. In some cases, these companies acted as both vendors and consultants and charged a fee based on the savings realized from their efforts.

In each case, clients of consultants and contractors were either required to pay funds up front in return for advice or enter into energy performance contracts that would build the project they wanted.

Neither of these two alternatives satisfied Solomon’s founders. Many clients resisted the idea of laying out precious resources before knowing whether there was any benefit to be achieved. After all, the consultant would be paid whether or not a successful project was completed; it was not unthinkable that the consultant’s staff would have a perverse incentive to analyze the client’s needs and deliver advice that would not be helpful.

At the same time, clients who deal directly with contractors often have trouble interpreting the offers they receive. How do they compare different offers for solar photovoltaic panels, for example? One panel from a Chinese manufacturer is for 305 watts and has a micro-inverter on the back. A cheaper panel is from a Korean manufacturer and makes 245 watts. Or one design calls for 5.7 kilowatts of panels on the roof and another for 4.8 kilowatts and another 2 kilowatts above the garage.

Our Clients’ Questions. If energy consumers could be put off by consulting fees and confused by contractor bids, how could Solomon provide a service that would not scare them or confuse them?

To answer that question, we went to our clients, the people we want to serve. We asked them to share with us the questions that they wanted answers to. We asked them to tell us the issues that were most relevant to them.

  • Does solar energy work for us?
  • How much does solar cost?
  • Is solar energy cost-effective and can we afford it?
  • Can I install solar panels myself?
  • Should we buy or lease our solar panels?
  • How much will my utility bill go down with solar?
  • What is the breakeven time for solar?
  • Who are the best and most experienced solar energy contractors?
  • What is the optimal configuration of solar panels on my roof?
  • Are there any drawbacks or negatives about solar?
  • When does solar not work?
  • What if my roof is not large enough?
  • Can I use solar panels if my roof needs repair?
  • Can I put solar panels on my land?
  • Do I have to cut down shade trees for my solar?
  • Will solar energy help me mitigate energy price volatility?
  • Are there better alternatives than solar?
  • What is energy efficiency?
  • What are some examples of energy efficiency technologies?
  • What are the comparative benefits of solar, wind, cogeneration and other energy efficiency technologies?
  • Would cogeneration be more cost-effective than solar?
  • Who are the best energy contractors?
  • How do I compare contractors?
  • How do I compare bids I receive from different contractors?

As we assembled this list of questions it became increasingly obvious to us that our clients were not looking for expensive consulting advice or contractors with one product to sell. They were looking for information. For clarity. For understanding. For guidance. For answers. Most of all for straight advice, irrespective of technology.

Defining Our Business. We finally knew how we could be most effective: The founders of Solomon would work with our clients to help them find the most cost-effective solutions to their energy needs. We would align our interests with theirs. We would not be paid unless we could find a solution that worked.

We realized that if we were going to be effective we could not confine ourselves to one solution like solar. We needed to be neutral and open to all possible solutions. There could be many answers to the questions we raised: Solar could be cost-effective but so could cogeneration. Utility prices might be so low that investing in solar and other renewable energy technologies might not be cost-effective. Or there may be factors such as an old roof in disrepair that would mitigate against using solar panels.

Our Key Objectives. Any solutions that we came up with for our clients would need to meet a number of objectives:

 

  • Our clients must save money. If we did not believe that we could deliver long-term savings we would not proceed.
  • Our solutions must be practical and proven. We would not sell our clients on experimental technologies that could be obsolete tomorrow.
  • Our analysis must be objective. We will not have a bias for solar over cogeneration, for example. Even if our clients tell us they want a specific solution we will evaluate the merits and deliver our honest assessment.
  • Our relationship must be transparent. We are buy-side advisors, helping our clients find solutions. Our fees will be paid by contractors and will be fully disclosed to our clients. We will receive no other payments or enter into any “soft dollar” arrangements with contractors that so often create conflicts of interest.
  • We are interested in our clients’ entire energy load, not simply the portion that we may conserve through renewables and energy efficiency. We want to help protect our clients from the impact of energy volatility on their entire baseload energy consumption, irrespective of how much they avoid through energy saving technologies.

Finally, we decided to dedicate ourselves to forming long term relationships with our clients. We aimed from the beginning to develop a reputation for integrity and reliability. We want to be a knowledge center for both existing and prospective clients, a place where they can find unbiased, straightforward views on their energy alternatives.

We believe we have begun to achieve many of these ambitious goals. Every day we learn something fundamentally new about the energy markets. As new questions arise we will eagerly look for answers.

In the meantime, we welcome hearing new questions from our clients. We may not have the answers at our finger tips but we will use our best efforts to find them. If you have such questions please let us know by writing to us at info@SolomonEnergy.com.