Embracing the Unusual: Southern Energy Management’s Expert Resilience

Reader Contribution by B The Change
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This article was reprinted with permission from B the Change, the digital publication of the nonprofit B Lab, which certifies B Corporations. You can follow what they do on Medium, Facebook, and with their weekly newsletter.

How Pythons, Renewable Energy Credits and Leading With Values Have Shaped the North-Carolina-Based Business

Bob Kingery, CEO of Southern Energy Management, keeps a constant eye on policy and the best possible future for his business as renewable energy is positioned to take the residential market by storm.

When Bob Kingery picks up the phone for our Tuesday-afternoon chat, he’s excited to tell us about his new office pet. “It’s a royal python?—?4 feet long, middle-aged. His name is Clyde.” It is, to be sure, an unusual way to start a conversation, and an unusual choice of office companion (though Kingery says the snake was a gift from a friend). But we learn, throughout the course of our conversation, that onboarding Clyde isn’t the most unusual thing Kingery has done as the head of a renewable-energy company.

Take, for example, the story of how he managed to keep his entire team employed when his company lost around half of its business a couple years ago. It’s not python-at-the-office unusual, but it’s remarkable all the same. (Keep reading for full details.)

As CEO of North Carolina-based Southern Energy Management , Kingery has become adept at thinking outside the box. The renewable-energy sector is still rapidly developing?—?economically, politically, technologically?—?so there’s really no such thing as “business as usual,” even for a 16-year-old company like his. New administrations and developments in tech present opportunities as well as challenges. That means the 65-member Southern Energy Management team must continually advocate for highly accessible renewables while expertly rolling with the punches.

About a year ago, Bob’s wife and Southern Energy Management co-founder, Maria, transitioned out of her role as CEO to start a new business?—?one that helps other companies run more efficiently for higher profits. She’s still actively engaged in the inner workings of Southern Energy Management, and she’s a committed member of the company’s leadership team.

B Lab talked to Bob Kingery about steering his business?—?a 2017 Best for the World, Environment honoree?—?toward success in a climate of excitement and uncertainty.

Renewables seem perfectly poised to take over the energy sector right now. What are the biggest obstacles of being in your industry today?

Our company does two primary things: One of them is we do energy efficiency and green building ratings for new construction. The second is we install rooftop solar systems on homes and businesses. They’re two completely different services with different customers, so they have their own unique challenges.

On the solar side, the challenges are obvious. Solar is an emerging industry with declining costs and hundred-year-old incumbent utilities that don’t want to have their business models eroded. That creates all types of policy challenges. Utilities change their rates in different ways, which makes it somewhat of a challenge to predict what solar is going to look like for customers in 20 years.

All those emerging-industry things on the solar side make it a real challenge to forecast where we’re going to be in five years. Policy is the core challenge, but also figuring out how the utilities are going to act and interact with us over time.

What’s your strategy for staying ahead of the growing competition in your area?

We highlight our B Corp values to show what our company stands for. We teach our team members what a sustainable company should look like around B Corp values. And we talk to our customers about that as well. We’ve been here 16 years. We don’t want to be the biggest company or the fastest-growing one. We just want to do the very best job we can, do right by our customers and give them a valuable product for a valuable price. We’re not flashy. We’re very much honest and hard-working just like the people who want to buy our solar systems. We want to be an Italian grandmother and wrap a blanket around you.

In 2015, the North Carolina legislature let its solar state tax credit expire. What affect has that had on your business?

Yeah, that was disappointing. We had to downsize our business, but we made a commitment not to fire anybody off of our team, and we succeeded in that commitment. We found jobs for some of our people at other companies that were doing utility-scale solar. We shifted a chunk of our solar team onto our building-performance team.

That was a challenging year to deal with. At the end of 2015, the credits ended, so there was a massive run-up to the end of the year for people who wanted to get that last-minute benefit. It was a big incentive to get it now while you could. So, in addition to 2016 being a down year, we also had a giant run-up at the end of 2015, which was doubly challenging.

We haven’t rebounded yet. We’ve continued to grow the company since then though. This year is a little better than 2016. It looks like in 2018, there may be some utility incentives that will put us into more of a growth mode than we have been for the past two years. We anticipate 2018 to be the financial equivalent of 2015. That’s what we’re hoping.

How do you foresee the current federal government and political climate affecting the solar industry and your business?

On the challenging side, a U.S. manufacturer of solar panels went bankrupt in 2017. One of the last things they did was they invoked a seldom-used trade dispute method called 201 trade case. Basically, what that says is that material harm was done to them by Chinese panel manufacturers dumping product in America. This will likely go to the President’s desk at the end of the year, and he’ll have the opportunity to add a significant tariff on top of solar panels. It’s widely believed that if that happened, the whole U.S. solar industry would go down 30 percent. It would effectively double the price of solar panels from 40 cents a watt to about 80 cents a watt. So that’ll be a potentially major problem for us. It’s entirely possible, in which case our growth would be significantly less than we had hoped.

There’s little within the Department of Energy that’s positive for renewables. It is heavily bent toward fossil fuels and mostly run by fossil-fuel people.

But on the positive side, we’ve seen consumers react. We get customers that say, “I want a solar system on my house because it’s going to cut my carbon footprint in half, and it’s a big action I can take personally. Since I can’t take any other political action in the world right now, I’m going to show my environmental consciousness through buying a solar system.” It’s not a giant group of people by any stretch, but it is positive.

Has Southern Energy Management?—?beyond advocating for its business?—?been active and outspoken in the push for accessible renewable energy?

Since our beginning, we’ve always been involved in the political landscape because it’s a requirement to advocate and lobby for our industry?—?both the energy-efficient and the solar part of our industry.

We will rarely stand against something. An example of that: There are groups that will go out and picket the nuclear power plant here. We don’t advocate on the negative of anything. We would only advocate on the positive of something. We’re all for advocating for more solar. This has been one of the policies Maria and I have believed since the beginning: For change, you can’t take the negative side of things.

We’re at the legislature every year and have been for 16 years. We’ve got lots of friends down there. We’ve known the last four governors of North Carolina, and we try to influence them to the positive for solar and renewable energy and energy efficiency, some with a little more luck than others. So my belief is that it’s a part of what you do in an emerging industry.

It’s frustrating because you win half of them and you lose half of them, maybe even worse than that on average. You spend countless hours trying to get the legislation right, and it just fails. It’s disheartening to stand up the next year and try to do the same thing.

What are some of the big shifts you see coming in sustainable energy in the next decade?

The biggest next shift is going to be zero-energy homes and people owning their power plants on their roofs. That’s like … that’s here right now. It’s happening. When people realize that it costs less, that’ll be the next big shift. You’re going to buy a house; and you’re going to pay your principal, your interest, your taxes, and your insurance; and then you’re going to pay your power bill. We can make your mortgage $100 a month higher and your power bill $100 less right now, and you’ll own the solar system on your roof. The big shift is going to be as customers recognize the economics of zero-energy homes. The demand will be massive.

When you talk to people, everyone wants it. When you show them, they say, “That’s exactly what I want.”

What does it mean to you to be a Best for the World honoree?

It’s something that puts a smile on my face every time I think about it, and I’m extremely proud of how hard our team has worked to put us in a position of accomplishing that. Achieving this is a major marker of a long-term goal and it’s the outward showing of all the hard work our team has done. It just makes me smile.