The beginnings of Energy Matters

Part one of an interview with Energy Matters co-founder and CEO Jeremy Rich.

Tristan Edis: So, tell me how did you get into the solar business?

Jeremy Rich: Well, I studied in Germany on exchange from Melbourne Uni in 2001 and was amazed at the amount of sun… or lack of sun they had there, but the incredible push for solar and I'd never really heard much about solar in Australia. 

I ended up getting a job in corporate finance at the National Australia Bank as a grad.  But I wasn't totally passionate about that space.  I was progressing reasonably well, but it wasn't really exciting to get out of the bed in the morning. I always had this thing in the back of mind about renewable energy being the way of the future. 

I had a number of like-minded friends and we started the business literally sitting around my mum's kitchen table and we were all, you know, greenies. 

We're also green to business in the literal sense and I've been fortunate to be able to set up a professional board structure with the likes of George Pappas and Nick Brass who are very experienced in business and mentors for me and the other guys.

TE: So, when did you start operating?

JR: 2005, so before the mad PV boom set off. I think at the time the PVRP (government rebate) was four thousand dollars, while the cost of systems was about twelve dollars per watt installed.  So grid-connected systems were very, very small part of the business. 

We were mainly doing off-grid, very small, consumer power sort of products, twelve volt and standalone systems.

Then John Howard bumped-up the rebate to eight thousand in 2007 and the market just took off.

We just happened to be at the right place at the right time.  So, obviously in business you need a lot of hard work, but you need luck as well, and being in the right place at the right time.

TE: Did you have a plan in place before it came along that you thought, “oh this might happen so we'll do this”, or was it just “holy shit” and you just made it up as you went along?

JR: As I said, we were very green at the time and we couldn't have predicted that eight thousand dollar rebate would have come along when it did. 

But we did think the business was going to be big over the long term.  We knew renewable energy was going to be massive.  It wasn't a question of if; it was just a question of when. 

We were young guys at the start and didn't have any expenses.  I could live off the smell of an oily rag, so it didn't really matter as to when it took off.  I knew it would take off.  I just didn't know when. 

It just happened to take off sooner than expected.  We did have to do a lot of on the job learning and we are still learning as we continue to grow.  The industry is always challenging and exciting for us.

TE: So, how did you structure the business and workforce to manage this? 

JR: In the early days we had to employ our own guys. And initially when we started actually we were very web based. We've always been very web based, but initially we were solely web based. So we weren't necessarily that liked within the industry and we did struggle to find installers to work for us in the early days as sub-contractors.

So we had to employ installers. But now we can subcontract out to many installers and we like to use the John West saying, it's the installers that we reject that makes us the best. We think we work with some really good installers and we need to invest even more in that channel and get closer with our installers. 

Other segments of the interview:

-- The importance of quality

-- The importance of scale, diversified markets and a strong balance sheet

-- The changing nature of the market and the rise to quality

-- The increasing importance of non-hardware costs