A&R SOLAR AT A GLANCE
Location: Seattle, WA, and Portland, OR
Team Members: 43
Impact: 7,500 MWh per year produced by systems it has installed
Awards or Recognition:
• Puget Sound Business Journal’s Washington’s Best Workplaces: 2015 Finalist
• 2013, 2014, and 2015: Puget Sound Business Journal’s list of Washington’s Top 100 Fastest-Growing Companies
• Solar Power World: #1 Solar Contractor in Washington, 2015
2015 Revenue: $12.5 million ($5.8 million in 2014)
Tell us how A&R got started and where the idea came from.
Reeves Clippard: We started in early 2007 with co-founder Andy Yatteau and myself. The idea had been percolating in my mind for some time. Both Andy and I came from different industries besides solar and needed to get into something more aligned with our values. We both got some training and on-the-job experience working as solar installers, but there were two really key pieces missing there: treating customers right and treating employees right.
We felt that in order to get to a more sustainable planet and sustainable American society, we needed to start shifting the way business was done. It came back to taking care of our employees. If they were taken care of, then that would naturally roll out to our customers as well. I had never been in the contracting world before, but most people have this stereotype expecting your contractor is always going to take you for a ride. We wanted to provide customers with a quality experience where they didn’t have to second-guess if we were deceiving them.
You mentioned trying to take really good care of your staff. What are some of the things that you do to make sure that happens?
RC: We pay entry-level workers above living wage for the area. It’s always very important to us that they are able to take care of themselves at home so they can bring their best selves to work.
As we grew, we were able to provide healthcare benefits and retirement plans, employee ownership, paid time off with as few strings attached as possible, unpaid time off. We’re a male-dominated industry, so we wanted to be able to provide paternity leave. There are a lot of other benefits that are a little more intangible, like being involved in decision-making and strategy. We’ve been horizontally organized, whereas in a lot of job sites, you see this hierarchical, command-and-control attitude. We’ve been intentional in making sure that doesn’t come into A&R Solar.
What motivated you to make A&R an employee-owned company?
RC: I worked for very small companies where I had zero ownership stake, and I worked for mega-national companies where I had zero percent stake, and in both places, there’s this trend of, “how do you engage your employees to think like an owner and act like an owner?” Well, why don’t you just make them an owner? That seemed to be the simplest way. It’s certainly not the easiest way.
At this point, we are 100 percent employee-owned. All owners currently work here. Not every employee is an owner. We just rolled out a new ownership plan: people get their ownership after three years, and then they just get it; there’s no vesting schedule or anything like that. There are 43 employees right now and seven of us are currently owners. By the end of the year, 11 or 13 of us will be owners.
Interesting. How did you decide on that three-year time period?
RC: We wanted people to be invested, time-wise. Some companies do that through a vesting schedule and say, “You’ll get 30 percent of your shares this year.” But we wanted to reward longevity, not a “get it while it’s hot” attitude.
While you’re coming up on 10 years, is there anything as a company that you’d like to be able to do in the future that you’re still not able to do for your employees?
RC: Oh, geez. All kinds of things. We’re always working on building a greater sense of community. Right now we’re split between two warehouses and another office in Portland. There’s a real split that happens between field and office. When you’re working in the field all day, you think that people in the office do nothing but look at cat videos. And when you’re in the office all day, you think that people out in the field are doing nothing but sitting around drinking coffee and enjoying the sunshine. We are missing the cross-pollination of those two different cultures to make a cohesive A&R culture.
Now we’re seeing an extension of that as we have a new Portland satellite office where we want to make sure what we’re exporting isn’t just our technical expertise, but the same culture of caring.
“If you cannot build a business that supports personal values and company values, then you’re doing the wrong thing.”
How has having a second office impacted the business?
RC: There’s a sense of excitement that we have something of real value we’re trying to wrap a bow around, to export what’s special about us into a new marketplace.
You were named one of the fastest-growing businesses in the Seattle area three years in a row. How has that impacted your team?
RC: It impacts everything. We’ve always tried to take a “go slow to go fast” mentality; it’s better to get it right the first time and then iterate off that success rather than to go so fast that you shoot yourself in the foot and have to undo and redo things. Those kinds of things can really hurt your brand.
Every year we set an intention around what we’re focusing on, and every year, we come back to “How do we do what we’re doing better than last year?” Every time we focus on that foundation, the growth just happens. A lot of that’s in the marketplace, which has been averaging 41 percent growth. We’re at 117 percent growth for last year, and we doubled the year before that, and the year before that it was 70 percent growth.
The early years of growth were incredibly stressful. We’ve bootstrapped since we started, so we were always strapped for cash and people. In the last few years we invested more in people and made sure that we had a staff we could lean on. Even then, we’ve been stretched thin.
But as long as our culture is still having some fun and the attitude is “How do we get this right?” not “How do we get it done?” then it’s made things easier than they could have been.
When, say, you sit down as a group to talk about your intentions, who’s the “we”?
RC: Everyone in the company.
Wow. Very nice. Bringing other people in is an interesting puzzle. How do you find the members of your company, and then what’s the training process like?
RC: The short answer for training is: in the past, it’s been horrible. It’s really been “pitch someone into the fire and see how they do,” which is not the best. With our latest round of hires, we spent a lot of time and energy putting together a good training plan for them and it’s worked out tremendously. They’ve gotten up to speed in a fraction of the time of previous hires.
Bringing the right people in is always a challenge. We hire to our values first and then technical skills second. It’s a lot of behavioral-based questions.
You talked about your remarkable growth over the last three years. What is driving that business growth?
RC: Definitely public awareness. More than 9 out of 10 Americans believe that we should be pursuing more solar energy. That’s across political spectrum. We’ve seen real government support that has a timeframe long enough for us to want to invest. When the government just gives and takes away incentives left and right, there’s just not enough certainty to put my cash back in.
This last year, depending on the month, direct referrals from existing customers were north of 40 to 60 percent of our contracts, which, for contracting, is just phenomenal. It’s a good indication that we’re taking care of people by having direct referrals that high.
It seems like policy plays a major role in the clean energy world. How is it impacting your work and how are you navigating that?
RC: Policy is critical. It’s not just clean energy. We’re a part of the whole energy ecosystem, and energy is the most political of industries. We’re interfacing with coal, environmentalists, natural gas, oil, hydro, and everything. There will never be a day that we are not having to work at a policy level. Our CFO, Dave [Kozin], is very active in trying to steer policy from a trade group platform, and we’re always watching what’s happening on a regional and national level.
How has the technology improved since 2007, and what areas would you like to see continue improving?
RC: Panels have gotten more efficient, but not as much as a lot of people expect, thinking of Moore’s law and cell phones, how quickly computing advances. Solar panels do not follow that same kind of development curve.
The biggest improvements have been in process: simplification at an administrative level of being able to interconnect with the utility and get it through a permitting process. Also, standardization: manufacturers are able to reach an economy of scale to make sure that their product is compatible with the next product down the line. We’re keeping fewer parts on a truck and things are more universal so you can speed up the labor side.
Another important development is the panel manufacturers getting to a scale where prices have absolutely plummeted. They’re about 60 to 70 percent less than what they were just a couple of years ago. People are usually spending the same amount of money as they were, they’re just getting more for their buck.
What I’d like to see change is for people to realize that there is no magic bullet for solar two or three years down the line that will suddenly make the technology “viable.” It’s viable now. There’s no reason to wait three years. The government support that we have now may not be available in three years. Hopefully, we won’t need those incentives; I don’t think anyone in the solar industry wants to be married to incentives like we are, but we’re in a position where we need them until we can get to grid parity.
And I would like to see better ways for people to connect with their power. Right now, you just have a little LCD screen that says, “I’m producing these numbers that are a metric that I just don’t understand.” How do you get someone to think, “Okay, I really should change my behavior or think about my buying patterns in order to achieve some kind of goal” — be that net zero or being a producer or even just making whatever impact they think they should?
What are some of the differences between A&R and other top-of-the-line solar companies versus ones that just don’t perform as well, and how would someone know the difference between those things?
RC: Knowing the difference is really about doing your homework, and it’s hard to take the time to talk to several contractors. It’s kind of like interviewing new employees. For homeowners, it comes back to trusting their gut. Do they feel like they’re being “sold,” or is someone educating them and making sure that they have the information they need to make a decision? It can be really complicated, but when you’re working with someone who really knows what they’re doing, they’re able to simplify and educate in such a way that you come away feeling smarter.
Everything we’re doing is a design choice. We could produce more by tilting up panels in weird ways and ultimately it would look like a satellite crashed into someone’s roof, but our attitude is that we’re not just building a solar company, we’re building the solar industry. It’s not just your roof and your aesthetic, but how the next buyer might evaluate it, how your neighbors think of it. By putting panels on the house, are we adding to the community or are we subtracting? If you just throw them up there willy-nilly then you’re not doing anyone any favors. Maybe you’ve fit one more panel up there, but you’ve sacrificed the aesthetic of the entire house and potentially the neighborhood.
How are you preparing to continue growing the company and to handle the next phase? What are you doing to make sure that the future is not going to surprise you?
RC: The future could certainly surprise us. I think it comes back to always doing foundational work, always thinking about how we can best take care of our people so they are prepared to take whatever comes their way. It’s a lot of internal training. It’s a lot of getting people engaged. The more eyes we have on the future, the better off we are and the more flexible we can be.
We don’t see ourselves as just solar installers. What we are learning to be the best at is delivering technology to someone’s home or business. If there is a disruptive technology that’s micro black holes, that inventor, that manufacturer, is going to have to get that technology to someone’s home or place of work. What we’re good at is connecting what can be complex technology to end-users and rolling the trucks and getting the boots on the roof or on the jobsite in order to get that technology to those people.
We feel like the future of the utility grid, whether it’s with solar or not, is going to be highly distributed. Content creation, telephoning, computing — everything has gone distributed, and we think the grid of the future will be the same. Whether it’s solar or storage or some other generation, we’re learning the best ways to mobilize to do that.
CLIPPARD’S TOP 3 PIECES OF ADVICE FOR SOCIAL ENTREPRENEURS
1. FIND MENTORS
Formal ones definitely help, and if you can pay to get a great coach, that’s awesome. But with an open mind and heart, you will find a lot of people can be your mentor. Outside help is critical because you get so lost in the day-to-day minutiae that it’s a long time before you can pull out and see the big picture.
2. KNOW YOUR VALUES
That includes your personal values and your business values and how they’re different. Make sure all decisions point back to those. If you cannot build a business that supports personal values and company values, then you’re doing the wrong thing. It’s not going to work out for you no matter how hard you try.
3. CARE ABOUT CULTURE
Learn to hire to and develop your culture as much as you’re developing whatever spreadsheet. That’s what’s going to make you come back to work the next day.