Case Study: SunRise Solar
Product and service mix
SunRise Solar Inc. manufactures and sells solar-powered attic fans (roof vents that run entirely on a built-in solar panel). The attic fan removes hot air from the attic to keep the house cooler. With less heat dissipating back into the house, there is less drain on the air conditioning system. This extends the life of cooling equipment and reduces air conditioning bills. The product also extends the life of the roof shingles which are petroleum-based products.
Affordable solar fans that reduce energy bills. The fans are one of the most affordable solar products on the market, costing approximately $500 on average. After installation, homeowners will start to see immediate savings on their energy bills. When consumers order the attic fans, the product comes in a box ready to run with no assembling required.
President of SunRise Solar, Bill Keith (see profile), was a roofing contractor for almost 25 years before he founded the company. As a roofer, Keith noticed that ventilation issues were some of the most common problems that customers faced. Keith explains that the decision to manufacture a product that would help roofs properly ventilate was a "no-brainer": "By putting in a solar-powered attic fan, you're helping customers, reducing their energy bills, extending the life of their roof, cutting down on mold and mildew, and doing it all by using the power of the sun."
Sales rise sharply. Keith launched the company in 2003 after taking a home equity loan on his house. Since the first year of sales in 2003, sales have risen sharply. Sales for 2009 are expected to be between $3 million and $3.5 million dollars. In Keith's view, the company's 2008 sales were just the tip of the iceberg. Keith describes the company as just getting started, and that SunRise Solar is yet to be a household name.
The company has grown through grassroots efforts. In the early years of the company, Keith sent letter after letter to politicians, business people and the media without hearing responses from anyone. In early 2007, Senator Lugar, of Indiana, reached out to Bill Keith, marking a big turning point for the company with the media. Senator Lugar awarded Keith the Energy Patriot Award, spurring press attention for SunRise Solar. Before winning the Energy Patriot Award, the company had won awards for having the most efficient product; however, the recognition was very industry specific.
Company location logic
Keith was born and raised in Indiana where he and his family have deep roots in the community. When launching SunRise Solar, he decided to stay in Indiana, because, as he put it, "there's something about being where your roots are." SunRise Solar ships their goods from Indiana to places all over the world. Indiana is an appealing place to do business because they are right near Chicago and have a great transportation hub.
As a coal-burning state, Keith describes Indiana as a place that has an old way of doing business and where it takes some time for people to change. Keith remains optimistic about Indiana:
"I would like to see Indiana become a leader in green technology, and there's no reason that we can't do it. We have leading engineering schools that are recognized worldwide (Purdue University). We have top-ranked trade and technical schools, one of which (Ivy Tech Community College) is starting a degree program in environmental science and green technology. I see a lot of the underpinnings of us becoming more of a leader."
Keith goes on to explain:
"Coal is the cheapest form of energy, and because Indiana is a coal-burning state, we could be doing it cheaper than anyone else. But it's not environmentally friendly. That's our dilemma: We have this cheap source of energy, but we don't want to tap it more and pollute the environment. Why can't we turn around, do 'a 180' and become the most environmentally friendly state?
"Air Conditioning, according to the EIA, accounts 16 percent of total residential electricity use in the U.S. Central AC typically uses 2800 kWh per year. If 20 million homes added attic ventilation, we would save about 9-10 billion kWh's per year. That's about three 500 Mw coal plants we would no longer need."
Company size and structure
SunRise Solar's products are manufactured and assembled at a nearby plastics molding plant in Warsaw, Indiana. By not having the responsibility of manufacturing, SunRise Solar President, Bill Keith, has the freedom to promote his product and attend trade shows throughout the country to drum up interest.
SunRise Solar has four full-time employees and two part-time workers. The plastics molding plant, which also serves the automotive and RV industries, employs 18 to 24 people depending on the time of year. Although business in the automotive and RV industries has dropped in recent months, SunRise Solar's has picked up and allowed the plastics molding company avoid layoffs.
Relationships with partners in the value chain
When working with partners in the value chain, Keith always starts within Indiana. If he needs a component, he will not buy it out of state unless he cannot find it in his own state. Keith explains that there are many benefits to finding local materials: "The closer the vendors are to me, the less shipping costs there are, and the more green we can be."
SunRise Solar is building an installer-dealer network in the area. In addition to selling the fans, the dealers can also install the product. Keith explains that anyone with basic carpentry skills could install his solar-powered attic fan. Because so many different kinds of workers have the skills to work on roofing, there are a lot of potential installers. Roofers, carpenters, plumbers, HVAC and chimney workers are all able to install the fan. SunRise Solar also has local contractors and roofing supply stores that can refer customers to installers. Keith notes that with the current economic situation, HVAC contractors from all over the country are interested in working for him.
Immediate plans
Keith's vision is to produce his product domestically and in his own state (Indiana). Keith explains that having everything right in Indiana — raw goods, workers, right down the supply chain — keeps the whole economy going, and everyone in the community can prosper. Keith's goal is to produce everything locally and thereby keep everyone working.
Thus far, SunRise Solar has not been impacted by the credit crunch. The most recent year-over-year monthly sales have reached record levels, and the company is in expansion mode. If sales grow as much as expected in 2009, Keith plans to add four to eight more employees in the next year. In addition, the plastics molding plant would likely need to add two to four more workers for assembly and order fulfillment. Keith also hopes to be able to find talent that has energy auditing expertise.
Keith's immediate plans are to grow the company with the lowest overhead possible. In order to do so, Keith explains that another assembly plant in the U.S. would be key and would add another 15 to 25 jobs.
Top opportunities for future growth
Keith is optimistic about opportunities for growth. SunRise Solar is currently working on a product for Australia and Germany. He explains that the European markets are much more embracing of renewable energy and energy efficiency efforts than the American market.
Top requirements to capitalize on opportunities
To keep his company growing, Keith would like to know more about existing incentive programs that could help businesses like SunRise Solar. Many projects such as weatherization programs and R&D programs have already been established, and Keith wants to learn how to connect with these initiatives and find out if his business would be qualified to participate.
Keith mentions that state tax incentives have also been helpful for his business. Customers in Hawaii, for example, receive a 35 percent state tax rebate when they purchase SunRise Solar's products. He is certain that if more states adopted similar state tax incentives, SunRise Solar would benefit from even more opportunities for growth.
Keith is now working on a proposal for a project with the local high school to install a solar system on the school's roof. For the project to succeed, he would need to set up a power purchasing agreement with the local utility that would include a feed-in tariff. Ultimately, the school would spend less money on its electricity bills because it would feed energy into the grid. Electricians would need to be hired to install the solar panels, and Keith hopes the school could be used as a training facility for new electricians. Keith explains that grant assistance would be needed to get the project started:
"The government still subsidizes oil tremendously. Why can't we subsidize clean energy? Anything that government could do to encourage utilities to be open to generating energy from cleaner sources would help. The grid needs to be deregulated to a point where I can go out as a consumer and feed in electricity to the grid and get paid for it. Although Indiana currently has net metering standards in place, utilities only pay nine cents to the dollar, which is not viable."
This case study was prepared by Collaborative Economics for Environmental Defense Fund.
Posted: 17-Feb-2009; Updated: 17-Feb-2009
