Every business endeavor – even a non-profit – needs to be financially viable or it won’t benefit anyone. But it’s refreshing to see a successful profit-making company so clearly focused, not just on the bottom line, but on enriching the community. PFMG Solar is such a company. I spoke with Paul Mikos, President of PFMG Solar, about what drives their vision and the role renewables can play in the community.
Jules: PFMG Solar recently underwent a brand change. As PsomasFMG, the company was mainly an installer of solar panels. How has that changed and why?
Paul: I think the name change is really kind of an evolution of our original business plan. What we were really hoping for was to make a difference and get involved with something that really mattered. We wanted to be able to give back to the community. People always asked us what we did, so including the word solar clarified that. And with the help of our partners we came up with a natural idea: PFMG stands for Partners For Many Generations.
Our solar systems are going to last at least 20 to 25 years. So generations really will benefit from renewable energy, better air quality, and reducing their carbon footprint. Besides that, our systems contribute quite a bit to a school’s general funds.
Read Renewable Energy Finance: Theory and Practice from Amazon.
When you start a company you need to make a profit; you need to be successful in order to grow and to bring in the right type of people. But you don’t have to make so much of a profit that you can’t share it with the community.
Jules: You mentioned schools. Clearly, PFMG Solar is focused on bringing solar to schools. Can you tell me why that’s important?
Paul: California, particularly the Los Angeles area, has in some ways turned back to the old days. I grew up in the 50s in California when smog was terrible, and then for a while it got better. But today there are so many people here and so many cars are on the road, that when you get away from the coast the air quality is pretty bad, particularly when there’s a warm day.
The thing about the air quality is not just that it’s bad air; it’s bad breathing for the kids. In fact, asthma-related illnesses are the main reason that kids are missing school, and it costs the school districts money when their kids aren’t in school. School districts get paid when kids show up every day, so when they have absences because the kids can’t breath and they’re suffering because of the air quality, it hurts them.
One of the benefits, then, of renewable energy, particularly solar, is that it allows for clean air. That really fits our model of better health for the kids.
Additionally, our solar systems not only bring substantial savings, better air quality, and health benefits to the area, but they also help to modernize the campuses. Most of our projects at schools are installed on canopies either in the parking lot or out on the field where they provide shade. Shade is a big deal in southern California when you get away from the coast, so you can actually justify these systems just by the shade they provide.
Jules: PFMG Solar gives back to the community in another way too. Can you elaborate?
Paul: Since we started the company we’ve given over $1 million worth of scholarships, mostly college scholarships, to high school kids. The vast majority have been for minority kids that wouldn’t have had an opportunity to go to college without a little bit of a boost. We’ve also made a big effort to get involved with K to 8 kids and working with school districts on things that they need.
Jules: Of course, school districts have to pay for these systems. But they reap a significant financial benefit in return. Can you explain how that works?
Paul: Here in California the way utilities are set up there’s something called Demand Charge, which means they charge more for certain times of the day and they charge you more if you’ve used a lot at that period previously. In essence, they’re holding electricity in demand for you. That makes the summers very expensive in general.
But, since most schools use less electricity during the summer because classes are out, much of the electricity produced by the systems is above and beyond what the schools can use. Therefore it’s sold back to the grid at the highest possible price. It’s sold back at the price they would be paying.
So our systems provide a very cost-effective way to bring in solar.
Jules: What sort of challenges does PFMG Solar face in rolling out solar systems to schools?
Paul: This is a tough market. There are more than eleven hundred school districts in California, half of which are in southern California, and fewer than 10% have solar, so there are opportunities, but there is also the difficulty of getting the message across to administrators and boards. They’ve got a lot of problems and issues to worry about, and we’re introducing one more thought process that they have to consider.
It’s also particularly difficult to build on school property because you’re building almost always while there are kids on campus. So safety is very important. But we’re very proud of our ability to build on school campuses safely.
Then there’s the issue of subsidies for solar. Over the last several years, subsidies have gone way down. And now the ITC, which is a big part of our sales opportunity today, is due to sunset down to 10% at the beginning of 2016.
This means that we have to really do a good job of keeping our costs down and making our opportunities very cost effective for our clients, while still delivering the high quality they’ve come to expect.
Jules: Where would you like to see things head in the future?
Paul: Presidents since Eisenhower have tried to make the country energy independent and I’m not sure we’re any closer to that than we were in the 50s, with the world events in the middle east. So we need to look at renewables. This is important, not only for California but for our country.
Certainly we have resources, and I think we should get the resources out of the ground. But the reality is that big cities particularly have serious pollution problems and issues, not the least of which is the health of our children. If we want them to be in the best possible situation to learn they need to be healthy. So, I think solar can make a real contribution to that, particularly in schools and in communities, and we’re excited about being in that niche.