Beyond the Tax Credit Cliff with Freedom Solar CEO Bret Biggart

The federal 30% solar tax credit has driven demand for solar but it’s about to expire. And when it does, some worry the bottom will fall out of the market. But what’s actually emerging looks less like a collapse and more like a shift which could lead to bigger growth down the road.

In this episode, Bret Biggart, CEO of Freedom Solar, offers a grounded look at how a major Texas-based installer is adapting in these uncertain times. Freedom Solar began in Austin and now operates across Texas, one of the fastest-growing residential markets in the country.

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Biggart notes that while the tax credit’s end will make sales more difficult, other forces like rising power prices and better financing tools are keeping solar within reach. New third-party ownership models are allowing companies to use commercial incentives to maintain homeowner savings, smoothing out the post-credit transition.

That’s not the only shift underway. Consumer protection has become a growing focus for regulators after years of aggressive door-to-door sales and subcontracting issues. A recent Texas bill aims to bring more transparency to the process, ensuring buyers know who is selling, installing, and servicing their system. The Texas Legislature also made it easier to build with faster permitting.

And storage is quickly moving from luxury to standard: 67% of Texans get storage with solar from Bret’s company now. The number is 90% in Houston. Freedom Solar is also expanding into efficient HVAC systems like heat pumps, which cut energy use and increase comfort.

There are still challenges ahead. Equipment costs, tariffs, and permitting inconsistencies remain barriers and the ending of the tax credit is an undeniable headwind. But after Winter Storm Uri and Hurricane Beryl, Texans put a high value on resilience and the flexibility of distributed systems has massive value for the grid. Even as incentives fade, technology keeps improving, and Texans want reliable, resilient, and affordable power.

That’s what this moment represents, not the end of the solar story, but its maturation.

If you found this perspective useful, share it with a neighbor and subscribe for more grounded insights on Texas energy and policy each week.

Timestamps

* 00:00 – Introduction

* 01:45 – Guest intro and background, origin of Freedom Solar

* 05:00 – Importance of in-house salespeople and customer-first processes

* 07:30 – Impacts of federal budget bill, end of tax credits

* 11:00 – Long term implications for solar, rethinking the business

* 13:30 – Third party ownership, pre-pay PPAs and other structures to lower costs

* 17:30 – Transferring solar and solar payments when selling a house

* 20:00 – Consumer protections and stopping bad sales practices

* 25:00 – Some Texas bills that make it easier to build and install solar + storage, problems with implementation

* 31:00 – Attachment rates of storage is up to 67% statewide and 90% in Houston

* 33:30 – An integrated demand side: solar + storage + heat pumps

* 39:30 – Difficulties for customers trying to get heat pumps

* 43:30 – Heat pump cost differential from minimum performance HVAC

* 46:30 – Supply chain, tariffs, domestic content

* 51:00 – Two main variables for solar economics: cost to install and cost of electricity

* 53:00 – The value of resilience

* 56:00 – Closing

Resources

Guest & Company• Bret Biggart - LinkedIn

• Freedom Solar Power + LinkedIn

Referenced During the Show• Solar legislation passed in Texas’s 89th Session (summary)

• New law cuts red tape for rooftop solar and batteries (SB 1202) + Bill Text

• TDLR: Residential Solar Retailers program (SB 1036) overview

• Texas Legislature passes Residential Solar Retailer Regulatory Act (SB 1036)

• Do Solar Panels Increase a Home’s Value? | The Wall Street Journal

• Texas Energy Poverty Research Institute’s Community Voices survey

• Sara DiNatale’s award-winning series on solar sales | San Antonio Express News

• Heat pumps, heat pumps, heat pumps! Noahpinion

Related Podcasts by Doug• Resistance is Still Futile: Exploring Heat Pumps with Eric Wilson

• How Load Flexibility Could Unlock Energy Abundance with Tyler Norris

• Know Before You Go Solar with Sara DiNatale

Related Substack Posts by Doug• The End of Solar & Battery Manufacturing in America?

• Rapid Demand Growth Outpaced by New Supply in Texas

• Energy Scarcity

• Helping the Grid by Helping Customers

Doug’s Platforms• LinkedIn

• YouTube

• X (Twitter)

Transcript

Doug Lewin (00:05.87)

Welcome to the Energy Capital Podcast. I’m your host, Doug Lewin. My guest this week is Brett Biggart. He is the chief executive officer of Freedom Solar Power. Freedom is one of the largest solar companies in the country, top 10 by size, around 500 employees, and probably the largest or among the largest within the state of Texas. I thought it was a good time to do an interview with a solar entrepreneur, given all the changes going on with the tax credits. But here’s somebody who’s employing a whole lot of people, is worried about the future of the industry, partially because of some of the changes made in DC, but is determined to innovate and is in fact doing that around financing where there are tax credits that can continue for leased systems for the next couple of years. Also innovating by starting up Freedom HVAC to complement Freedom Solar because HVAC is by far the largest use inside Texas homes. So linking that with the power generation for his business made a lot of sense. So we talked a lot about how companies can innovate. We also talked about some of the legislation that was passed during the session to remove permitting barriers, a bill that was passed to increase consumer protection, which Brett actually advocated for. We covered a whole lot of ground. I hope you enjoy the show. Please give us a five-star review wherever you listen, and please share the recording with anybody who you think might want to listen. That is one of the ways we grow fastest is through organic growth and sharing. So please like and share the podcast with anyone you know. With that, enjoy the show.

Brett Biggart, welcome to the Energy Capital Podcast. Excited to have you here. Been reading your tweets and posts and seeing your name in news stories for quite a while. You guys are a pretty big deal in the solar space in Texas. You built quite a business over the last decade or so, a little longer than a decade. At this point, why don’t you just start by telling us a little about yourself, just briefly about Freedom Solar, origin story, size, scope, all that kind of stuff.

Brett Biggart (01:47.704)

Thank you for having me.

Sure. I guess the short version of this is Adrian Buck and I started Freedom Solar probably around 15 years ago. And I had kind of come out of the sort of professional finance world after business school. I actually got sober—that was sort of the catalyst thing in full transparency. And I got sober and I was trying to figure out what to do with my life, as many of us come to those junctions. And I moved back to Austin where I’m from, where I grew up, and the idea of starting a solar company kind of came to me and I started to do some research and try to figure out sort of as a customer, what’s the value proposition for a customer trying to go solar. And I couldn’t figure out the answer to that question. You know, I couldn’t get people to call me back. I was sort of doing the math, you know, there were tax credits and there were local rebates and trying to think about kilowatt hours. It took me about two weeks to sort of get to the answer of like, what does this cost and what is the sort of payback, the economics of it.

That was sort of a light bulb moment. Like, wow, there’s got to be other people out there that have a similar situation that are just trying to quickly understand the economics to make a decision. Does it work or not? And so Adrian and I—I met him and we sat at a Mexican food restaurant and I sort of said, look, I think I’m going to start a solar company and here’s why. Sort of fragmented. People don’t really explain it very well. Don’t know how to finance it, sell it. And I’ll never forget this. He sat across from me and he says, “Okay, I get that. Like I’ve been doing this for—I was the first NABCEP certified guy in Texas and I’ve been running installation crews and doing installs and designing systems for a while now, but I don’t even like people.” Okay. So this sort of behind the scenes, you know, profile of a guy who’s very technical and very detail oriented, doesn’t quite frankly like to deal with people. And so we sort of got together at that moment and started out of his garage.

And so that was whatever it was 15 years ago.

Doug Lewin (04:08.152)

So him more on the technical side, you more on the people side, basically.

Brett Biggart (04:11.852)

Yeah, clearly. And so we were like, let me see if we can go put together a way to explain this to customers in a way that wasn’t explained to me, which is a clear kind of quick way to get to a yes or no, it either works or it doesn’t. And then his skill set to go install the solar and do a great job and sort of bend over backwards on the quality side. You know, we started building the business in the first year. We were like, okay, wait a minute. We just did a million dollars. Whoa. High five. Unbelievable. And then the next year we sort of did $8 million and we kind of high-fived and said, whoa, this is sort of growing.

And Austin has always been sort of a leader, certainly in Texas, I would say, as it relates to renewable energy. And so they had a good program here. So it was a good place to start. And then we sort of expanded across Texas, San Antonio, Dallas, Houston, and then just grew the business and sort of realized what we did that was unique was everybody that works still at Freedom Solar is an employee. So we don’t subcontract the work. We manage the quality.

And so our salespeople are W-2 employees and our installers are obviously the same. And so in an industry that is sort of gotten to a point where those two things tend to splinter, you have like sales organizations and install organizations. And I’ll speak to that later maybe, but that sort of creates an incentive structure that doesn’t put the customer first as maybe I had characterized. Yeah. I think we’ve seen that over the last five years sort of explode into a real problem.

And so we kind of always stuck to our knitting of keeping it in-house, mainly just to control the quality. And so we’ve been real fortunate. You know, I feel like a lot of businesses being in the right place at the right time. And certainly to start the business, we were in the right place at the right time. And the interest level of solar just sort of grew with the business. And we were sort of the beneficiary also of being in Austin, Texas and in the state of Texas where the population was growing and people were coming and interested.

And so we’ve sort of grown it into a pretty decent-size business. It’s sort of a $200 million top-line business. It was 300—count it at 200. And we primarily serve Texas. Got a commercial business that sort of does projects all over the country, but really heavily focused in Texas and then also Florida.

Doug Lewin (06:22.626)

And even within Texas, you’re doing both residential and commercial systems.

Brett Biggart (06:26.702)

That’s right.

Doug Lewin (06:29.77)

And roughly how many employees, how many installations, a few other just stats or...

Brett Biggart (06:33.442)

Yeah, sort of 500 employees roughly and 30,000 customers we have today and then 500-ish commercial installs that have been completed. So.

Doug Lewin (06:46.64)

That’s got to put you on the higher end of like solar as far as like the—if you were to like rank the size of solar companies, you’ve got to be up there on the short list, at least of those within Texas, right?

Brett Biggart (06:55.968)

Yeah, we’re—I think we’re probably top in Texas. In the U.S. we’re sort of kind of bounce around the seven, eight kind of size. Okay. Top 10, but sort of just right in there, depending on the year. Okay.

Doug Lewin (07:07.822)

Okay, so definitely want to talk to you about the sort of like culture and the sales culture, right? We’ll get into that. Sara DiNatale—I interviewed her for the podcast—did that award-winning series on some of the things going on in the sales world. So we’ll come back to that in a minute, but let’s actually just kind of start with like, okay, we’re recording end of September 2025. We are obviously now in this sort of post-O3B, the one big beautiful bill that has put this very aggressive sunset on the tax credits. Obviously that’s sort of like the obvious place to start, and the question I think everybody has on their minds: what is the biggest solar installer in Texas doing to kind of adjust to that new reality? So maybe kind of level set with like where we are. When are the tax credits actually going away? There are, if I’m understanding all of this right, and I follow this very closely and I’m still a little confused by it, but the third-party ownership piece, I think stretches for a couple of years. So talk a little bit about where the tax credits are and then sort of how you’re adjusting as a solar company and living and then hopefully thriving under the new rules.

Brett Biggart (08:16.128)

I’d say for those that don’t—I’ll just paraphrase the big, beautiful bill and sort of the biggest impact, which is the 30% tax credit going away at the end of this year for residential projects. So it’s sort of a dramatic cliff, right? If it’s not done by the end of the year, it goes to zero starting in January in terms of tax credits that are available. So I would say the expectation of what is going to happen to the market—if you read annual reports and people that really follow this, it sort of ranges between anywhere from like a 60 to 70% kind of cliff in terms of drop of demand starting in 2026. So that is certainly the scary big 800-pound gorilla that we deal with in business, which sort of adds to the complication of it is now everyone wants solar. So if you were on the fence and you were considering it, you were sort of in the pipeline for the last two years and you know, you and your wife are thinking about it, I don’t know—now’s the time to do it. Like definitively the time to do it. And so many people understand that and are kind of flooding us with projects. So you have this bad news situation followed by a huge increase in demand with a short runway to get it done, which is the end of the year. So from a business perspective, we sit in weekly meetings here at Freedom Solar and we’re like, wow, this feels like the good old days. Customer acquisition cost is low, close rates are good, people are interested, but it’s a sort of a short-term bubble, right? And so nobody can get—

Doug Lewin (09:46.444)

Sugar rush, right? It’s like all at once.

Brett Biggart (09:48.918)

Nobody can get too excited about it because we all know there’s something coming, you know, a couple months ahead. And so there’s been the ramp up right now. And then, you know, what I think about the impact of the tax credit going away, I would say as an immediate thing, it’s bad. I would say, because it puts too much of a halt on an industry that sort of—these are businesses, Freedom Solar is not a recurring revenue business. So, you know, if we do a great job for you and we install solar at your house, you won’t talk to me again for 25 years. That’s the reality of it. So every month you’re sort of hitting the flywheel, trying to make these businesses go with new sales. And so to have a 60, 50, 70% cliff is a very big drop. Not to mention that’s on the heels of a two-year run that’s also been a huge decline from interest rates, from, you know, consumer confidence, maybe be the best way to put it. But I think over the last two years, many people have said, you know, we’d rather go on a trip to Padre this summer or something rather than do solar. So that’s sort of all playing in the background. Then you get the beautiful bill, which kind of like puts a big hard stop and a date on it. And so then we have to sort of rethink our business a little bit. It’s sort of what we’ve been doing at Freedom Solar, which is what do you do and what do you think that cliff looks like? I would say long-term, I actually liked the idea of the tax credit going away.

I long for a business that provides enough value and economic upside to customers that it doesn’t need any incentive. Yeah. So I’m actually pro that. How that happens, I would have chosen a slightly more, you know, step-down kind of process to it, but it is what it is. So long-term, I’m less worried about the implications of it. And why I say that is if you take all these renewable things offline, you think about utility scale and big solar projects and wind projects that move the needle—you cover ERCOT, you know how much this, you know, on a day-to-day basis contributes to our power. Yeah. In the power stack, it’s a meaningful amount depending on the day, right? 30, 50, it’s a real number. And so as you start to...

Doug Lewin (11:56.166)

The day we’re recording, like, solar was 40% for four, five, six hours today. I mean, it’s really—it’s very significant.

Brett Biggart (12:03.758)

People don’t know that. I mean, I think that the common misconception is it’s like a 4% contribution. You’re like, no, it’s—it’s 40. Not anymore. And so I think as projects sort of fall, the renewable stuff at scale sort of slows down and you are forced to use natural gas in most cases to go power much of the state. The price of power goes up. And so as the price of power goes up, you see this offset to the 30% tax credit that will happen at some time in the future. And so the question to me is sort of like, when does that happen? Every utility in Texas that we operate in estimates a 5% increase in electricity prices next year. I’m sure. And probably a lot more. But for sure, five even in municipal utilities like Austin Energy or CPS. And in Austin Energy, it’s a five-year, 5% step-up.

And so you can sort of do the math there and figure out, okay, in a couple of years, we work back to a price of power being pushed up where the 30% tax credit is sort of offset. So, you know, how to get from here to there is sort of our tactical question as an entrepreneur. And the solar industry has done a great job surviving. I’ve been doing this for 15 years. So I feel like that’s maybe, I don’t know, 30 or 40 years in regular business life cycles, but there’s sort of a sort of a cockroach mentality. And I include myself in that sort of negative connotation, which is a will to survive, you know, no matter how difficult the situation may be. And I would say the way the big, beautiful bill was written and sort of a third-party window that was left open, so to speak, in sort of a burning house situation of like, okay, we’re taking away the tax credit, the house is on fire. But you’ve got this third-party ownership window, which sort of opens.

And what does that look like and is there a ladder out and does that work? What I’d say today is there are lots of creative structured finance products that are coming to market that take advantage of the tax credit that exists on the commercial side for the next couple of years and allows that to flow through to the residential side. Now I don’t think that’s Trump’s intent personally, but that’s what’s going to happen. And if you were to look at the economics, this was sort of the aha moment for me. A project that is $18,000 after the tax credit in 2025, you take that exact same project in 2026 and you do the exact same project in Houston, Texas, for example. And you use a prepaid PPA. That project is $14,000. Because that project can take advantage of domestic content adders. There’s some regional areas like Houston where their traditional oil and gas industries get an additional 10% tax credit.

Doug Lewin (14:59.154)

Wait, that stuff is all still there? The like energy communities?

Brett Biggart (15:02.398)

That stuff is all still there. Wow. And you can take advantage of it through the commercial side. So if I’m a customer, I do a prepaid PPA, which means I buy the power on the front end. I pay $14,000. It’s a PPA. So a third party owns the system. They service the system. So they guarantee the production.

Doug Lewin (15:23.246)

Which is nice for the homeowner, by the way. Which is great for them. Yeah, you don’t have to worry about certain—they have to monitor its performance and all that and maintain it.

Brett Biggart (15:31.074)

That’s right. And they’ve got, you know, it’s actually more guarantee for the customer that the system will do what it’s supposed to do. And then at the end of the five-year period on year six, it transfers to the homeowner at no cost. So that’s just an illustration to show there are creative structured finance ways to go solve this problem. And so if I look at—back to the cliff again and we say, okay, well how steep is the cliff in January?

I sort of don’t know the answer to the question, although I’ll tell you I’m less worried about the cliff today, given these new products that are coming online than I was two months ago. Because I think the economics to the customer are quite frankly, in the example I just gave you, not only are they the same, they’re better. Can a customer understand that? Those are all questions I don’t know the answer to. Mathematically, that’s the case.

Doug Lewin (16:23.394)

Yeah, and look, I think also, like, you know, when you’re talking about like 5% increases, typically, like, for instance, I did a podcast with Energy Innovation, and they did some modeling and showed that, like, residential bills were going up 20% over a—I can’t remember if it was five or 10 years, whatever the period was. But they made the point to say that’s 20% over and above what it would have been otherwise. So without O3B, like, bills were going higher just because of energy inflation, right? We’ve already seen everything’s getting more expensive from eggs to cars. And then you add tariffs to it and all that kind of stuff. Like you got even more inflation happening, more cost inflation of various goods and services, and then add to that now the tax credit’s gone. So I think that’s exactly right. I think we’re going to see much higher bills and having those kinds of structured finance and making that very intelligible to customers, helping them do that math and understand what that means. Brett, one of the things I wonder about is transferability. So like if you do that, you sign this sort of PPA and a third party owns it, and then you sell your house after two years or four years or whatever the period is, is it easier, harder or the same for then a new homeowner to like pick that up?

Brett Biggart (17:39.104)

It’s super easy. They’ve got the transferability. There’s sort of a pre-qualification piece to it, or you can just buy out whatever’s left on the lease or the loan, depending on what timeframe it falls into, but it is transferable.

Doug Lewin (17:50.796)

Yeah. You could buy it out, like, if you’re a homeowner and you’ve just sunk all that money in and then you leave in a period—I think this is one of the biggest barriers to a lot of homeowners. Like how long am I going to stay in the house and how long is that payback? What are you seeing with your customers? I understand what you said about like, we would sell them something every 25 years, but presumably you live in a community where you’re selling a lot of these. Okay. Are customers telling you, yeah, when I sold the house, I was able to get more money for the house because of the solar panels or they paid off the rest of it? Is it a mixed bag or some people saying it made it harder to sell? What are you hearing?

Brett Biggart (18:25.742)

Yeah. So it’s a little bit of a gray statistic, but the Wall Street Journal did a great article a couple of years ago about solar systems and the value that they provided in the resale to a home. And so if you had two homes that were identical on the same street and they’re just on the opposite sides of the street, one has solar, one does not—exact same home—the one that had solar on it was like $4,000 for every kilowatt that you put on the home in additional value to that. Now, I say that’s great because that’s California where you’re paying whatever, 26 cents a kilowatt hour.

Doug Lewin (18:56.622)

Oh, 26 would be a bargain in California. I think you’re paying like 35 or 40. Right, exactly.

Brett Biggart (19:01.016)

Yeah. And it peaked to me at 60, right? There is some increase in the value of the home, but I haven’t seen any studies done in Texas. Typically what happens is real estate agents contact us and say, okay, what’s the deal? There’s a solar system on this house. What does it do? And you sort of provide them with some modeling and say, look, this is going to save X amount over the remainder of the next 10, 15 years. And they sort of price that into the home.

Doug Lewin (19:24.61)

Got it, got it, yeah. So it is kind of a mixed bag, but yeah, I think that’s an interesting one, particularly as we start to get into talking about third-party ownership and these different kind of creative structured finance. I think as much as possible—as if the sales process and education process wasn’t difficult enough—helping homeowners understand that piece of it, because I think that is a big barrier for a lot of folks. I want to ask you also about—so we touched on this a minute ago, but I want to make sure we don’t lose this point, because I think this is very important for listeners, particularly those that are either considering solar themselves or know one of their family members or neighbor, whatever, friend from college, whatever. And a lot of the listeners of this podcast are in the energy industry. So they’re probably people that are getting a lot of these questions from their friends. And one of the things I tell people when I’m asked about this is ask the company, how is your sales structure set up?

Is it commission-based? Are the employees in-house? Are they outside contract? Because some of the stuff that I read in that Sarah D’Natale series, it was really wild. I mean, some of the sales culture stuff is just terrible. Just selling people systems that were sized completely inappropriately for their house and all that kind of stuff. I know you were very outspoken when that series came out that like, your company is called Freedom Solar. You’re not a guy that wants big government regulation, but this is a clear case where consumers do need some protection. There was a bill passed during the last session, but you guys do things differently. Can you just talk about, A, what your company does, and B, a little more broadly from an industry perspective, what should consumers look for in a company to make sure they’re not going to be taken advantage of?

Brett Biggart (21:09.644)

Yeah. Let me start by saying to your point, you know, the name of our company is Freedom. I never thought I would be some outspoken advocate for regulation. You know, never in my wildest dreams. If you would have told me five years ago, you’re going to be very outspoken about demanding regulation in an industry that you operate in. But that’s what I was doing in the last year. And I would say the reason for that—I don’t, you know, it’s hard to put a finger on it and say, well, let’s give everyone the benefit of the doubt maybe for the sake of this comment, which is you have an industry that was set up with a very low barrier to entry. And so if you have an in-home sales organization, which are typically sort of aggressive by nature—think of selling you encyclopedias in the sixties. If anybody comes to your door is sort of an aggressive sales thing. I would never buy anything where someone came to my front door personally. Never. Never have. Never would. Right. And they’d probably get chased off. But there are people that do sort of shockingly. And those people tend to be the ones that are most taken advantage of, which is someone shows up at the door and sort of promises the moon in terms of what a solar system can do, how much it’s going to save you, sort of willing to say whatever it takes to get you to sign on the dotted line to commit to it. They’re paid 100% commission based on whatever the price of that contract is. So they’re incentivized to do one thing. They’re, you know, they came from wherever they were to Texas to go do this for a summer, for example.

And they’re trying to make as much money as they can. So they’ll sort of, you know, the temptation to say a bunch of nonsense is there very heavily. They’re incentivized to get a bigger contract. And then they take that contract. Once you’ve signed it as a customer in sort of unknowingly, I think in most cases, they just turn around and sell that contract to a subcontractor to go install the work. So in its worst version, you have someone selling something that is incentivized to sell it as expensively as possible—

Doug Lewin (22:34.944)

Yeah, not good.

Brett Biggart (22:35.362)

—to say whatever it takes to do that, which is totally ridiculous. And then turn around and throw that contract to an install company who’s incentivized to do what? To install it as cheaply as possible to make whatever margin they can on it. In both of those cases, you have two outstanding opportunities to get your face ripped off as a customer. One on paying too much and two on getting a lousy installation. And that’s what’s happened.

Right. And so that sort of happened in a prolific way. And so I think from a customer perspective, you know, you want to go look and look at reviews online, the sort of basic things that we all look at, and then also really understand who is doing the work. If I have a problem in two years, is there a throat to choke? Who is doing the work and who’s responsible?

Doug Lewin (23:54.968)

Are they going to pick up the phone when I call? Is there going to be somebody on the other end of that when I call?

Brett Biggart (23:59.67)

And so I, you know, hate to say, but the sort of idea of, you know, historical performance indicates some kind of future prediction kind of applies here, which is, you know, if you’re buying solar from someone who’s based in another state far away, it’s a sales organization. Your chances of those guys being around is pretty low. And so sort of some basic due diligence around contracting, who’s doing the work, making sure it can’t be subcontracted, warranty work, performance obligations, those kinds of things. And then just sort of a gut check, which is go online and read some reviews and see what people say and start with the worst ones. You know, I hate to say that, but that’s sort of, let’s just start at the bottom of the pile here and work my way backwards. Just doing that basic exercise will eliminate, in my opinion, sort of 80% of the people that are out there. Yeah.

Doug Lewin (24:53.31)

Yeah, that makes a lot of sense. So you said you’re pro-regulation on that one. I think that one was Senate Bill 1036, if I got it right. We could put a link to the bill in the show notes. There were also some that removed some regulatory burdens. And here’s where, you know, I’m guilty like every other human being sometimes of negativity bias, but let’s give the Texas legislature some credit for passing Senate Bill 1202 and 1252. I think it was 1202 was the one you were keyed into more, but you can correct me if I’m wrong, but both of them make it easier for homeowners and business owners that are trying to put in backup power systems. Can you talk a little bit about that? And I also think it’s just kind of fascinating, Brett, like the juxtaposition here. We’ve got a state government that’s trying to make it easier for people to get these systems while unfortunately on a lot of levels, maybe not with the tax credits a little bit on the residential side, but even the bulk solar level, you got all these federal agencies now trying to make it harder.

So shout out to Texas for trying to make it easier for people to get energy resources at their place. But do you want to talk about 1202 and/or 1252 from the recent legislative session?

Brett Biggart (25:58.542)

Yeah, I think to your point, those were both sort of bright spots that came out of the legislature, which were—I think the intention here is about how to speed the process along in terms of a customer says, yes, I’d like to go solar. They sign a contract. I’m ready to move forward. What happens next? Most customers don’t know what happens next, but what happens next for a residential project is a lot of different steps, right? You’re involved with local jurisdictions. So AHJs, which 1202 addresses—

Doug Lewin (26:26.15)

AHJ’s authority having jurisdiction, right? So that’d be like your city or county or whoever. Not county usually, but usually—

Brett Biggart (26:28.628)

—utilities, rebates, paperwork, federal stuff in terms of tax credits to your point. So sort of federal, state and then AHJ, and add utilities to that. And then by the way, there’s also homeowners association. It’s usually a city. It’s like 653, I think, in Texas. Wow. So a lot of them. And so you have this weird mix to your point of like, okay, you’ve got basically every, you know, every level of sort of jurisdiction involved in one residential transaction—federal government, the tax credit, state here, and then, you know, a utility and an AHJ, and then maybe an HOA if you live in an HOA.

So we kind of handle all that for the customer and going through that process. That process on average, if you said, yes, I want to go solar Brett, I’m going to buy—I’m going to sign a contract today, it’s roughly 120 days till the project is done. 120 days. That is all a function of sort of those hoops, submitting paperwork and permitting documents and you know—

Doug Lewin (27:32.562)

And this is for something, by the way, that like, you know, the United States, we’ve been installing tens, hundreds of thousands of these things for like a decade or more. Like we know how to do this. It’s fairly standard. Like this is not some big, massive engineering project. This is not a data center. Yeah. Yeah.

Brett Biggart (27:50.23)

This is a straightforward, you know, residential home improvement project. Yeah. But it takes 120 days. Why customers care about that to state the obvious is one, who likes to pay for something and have to wait 120 days? I don’t know about you, but I don’t. Yeah, no. More importantly, if you add to that in our business, hundreds and hundreds of projects a month that are on that sort of spectrum, you’re adding cost.

And so it just drives the price of solar up. So how do you make this happen faster? And so I think the intent of 1202 is like, listen, on the front end, when you’re submitting a permit, there’s a quicker way to get a turnaround. There’s a sort of a required quick turnaround, but there’s a small detail to this. I won’t—I don’t want to get bogged down on it, but it’s a qualified person. You could use a qualified person in the AHJ to approve the permit. So that’s one part of 1202.

And the second part is to conduct the inspection. So a third party could be involved. So if you’re in a little AHJ, they don’t have a lot of resources. They make a list of what is a qualified person. And that’s sort of the sticking point of this, which is if you’re an AHJ and you’re like, hey, wait a minute. I’m in Plano, Texas, for example. And I don’t want the state government to tell me what to do. We have our own process here by God and that’s what we’re going to do. They make the qualified person so difficult to qualify that they hold all the keys to the cart. So I think the intent was to make it go faster. I think there are some AHJs who are participating in that and doing a great job. And I think there’s others that are sort of digging their heels in saying the state government didn’t tell me what to do. We’re the local jurisdiction. And so we’re whatever we are, 25 days into that bill being adopted. So it’s a little early to tell, but I’ll tell you it’s sort of a mixed bag of jurisdictions that are like, oh yeah, of course, rubber stamp. That’s what the state said. And then others that are like, no, no, no, no, no, no, authorized project. Here’s the laundry list of things that that requires.

Doug Lewin (29:53.142)

Yeah. So kudos to Chair Schwertner, Vice Chair King for passing, respectively, those two bills. But it may be that the work is not done with those, that there may need to be some tweaks in the next session or just ironing out some of the implementation. I mean, like this is always the way with legislation, people. I think there’s this idea out there among the general population that if a bill is passed, then it’s just done. That’s just law. But there’s implementation, which is actually like 90%. Passing the bill is one thing, how it’s actually interpreted and implemented in the real world is often a whole different thing.

Brett Biggart (30:26.112)

You know, if you were to say though, if that bill in a perfect scenario where you have an AHJ that makes it easy to endorse what that bill says, it probably takes on average four weeks off the process, which is pretty good.

Doug Lewin (30:39.97)

Yeah. Yeah. That’s great. Let me ask you something just slightly different here. I noticed a couple of months ago, you guys launched Freedom HVAC. I’m really interested in this. Look, I think, you know, there’s a huge potential here. I think this has been missing for a long time, Brett, that you’ve got solar and storage. And I want to ask you about storage too, by the way. Maybe you could talk about that in the same answer. Like how much are you doing solar alone versus solar and storage? But to the point, to start to see the demand side as more of this integrated kind of thing as opposed to just solar on the rooftop, getting the storage along with it, and then having that heat pump that the solar is actually powering. Of course, you can get into like EV charging. There’s all these different ways that these kinds of things can go as these technologies are developing. But talk a little about your thinking behind being a solar company to now also being solar and HVAC. How much of that was sort of prompted by what you were seeing happening in DC with tax credits, how much of that was separate, and then a little bit of your vision for how those things fit together, solar storage on the one side and kind of HVAC and other things that people are using on the other.

Brett Biggart (31:51.598)

Okay, so I’ll start with storage for a second. You asked the question, what is—we call it attachment rate. How many customers that buy solar also buy some sort of battery backup system? I can answer that question. It’s about 67% across our portfolio.

Doug Lewin (32:05.858)

Wow. Now, is that over like the last year? Because I assume like five years ago it was nothing close to that, right?

Brett Biggart (32:11.286)

I was going to say five years ago, literally it was single digits. Yeah. I would go so far as to say that probably four years ago it was still single digits. Yeah. And then it started to kind of creep up and then all the things happened, right, that we lived through. Uri and all the kind of storm weather events and all of a sudden it sort of exploded. At the same time, a lot of advancement with battery backup stuff started to be released. So Tesla has a new Powerwall 3 that came out. So 67% attachment rate in Texas is sort of outrageously high. It’s really good. And so it tells you that people really care about resiliency and this backup power idea. And so we sell Powerwalls in most cases, but several different things. Enphase makes a battery as well. And so there’s several different things that we sell related to the product side, but the attachment rate is sort of—in places like Houston, in Houston last month, it was 90%. 90% of the people in Houston want some form of battery backup, which is...

Doug Lewin (33:14.186)

Those folks have been through Uri and Beryl. They’re, yeah, even more so.

Brett Biggart (33:18.894)

So it’s really become a big part of the mix. So we continue to like focus on that as it relates to battery backup. And then as we sort of think about the whole solution, what are we doing here? To your point, you know, we’re putting kilowatt hours on the roof through a solar system and okay, maybe you’re storing some kilowatt hours in a Powerwall. Okay, great. But you’re consuming the same amount of electricity in most cases. And oftentimes you’ve got an HVAC solution that is very old or antiquated. And so we started to look at the HVAC market and what’s going on here and sort of what’s the technology. And it became evident to me that we at Freedom Solar talk about sort of complicated things, microinverters and kilowatt hours and lifetime savings and degradation and sort of the world in kilowatt hours. And here you are with an HVAC and in many cases you have some builder-grade model that just turns on and turns off. It’s a single speed and it’s super inefficient.

So, you know, the bad analogy I’d use is sort of like building a race car and putting a motor in this thing that’s got a souped-up motor, which would be your solar system, but then putting old tires on it and saying go burn a couple laps on the track. It’s like, well, it’s not going to go that great. It’s a little bit of the same thing, which is can you come inside the home, which on average is 52% of your electricity consumption is your HVAC.

Doug Lewin (34:40.846)

In Texas, yeah, easy, right?

Brett Biggart (34:43.628)

So what is happening in this world? And so we started to dig into that sort of at the beginning of the summertime. And I was sort of shocked that there are a lot of products that are available. You mentioned heat pumps is probably the best example. And that was actually the thing we sort of walked into, which is if you have an energy-efficient home, you have a solar system on the roof and a heat pump that’s heating and cooling it. And you’ve got a little backup storage. You got a great solution. You’ve got a really good energy-efficient solution that is going to take the worry of sort of storms, electric bills, all the things we sort of characterize. You’re going to solve that problem completely. And so is there a way that we could come into the home, so to speak, and solve this HVAC thing? And so 90 days ago we launched an HVAC division and there are parts about that business that I’m just like so giddy over. I don’t want to geek out on this call and tell you, like how I characterize—

Doug Lewin (35:41.475)

Please do. No, geeking out is all I do on this show. Yeah.

Brett Biggart (35:45.686)

I told you that the average day, the timeline for a solar system is 120 days. So yes, 120 days, we put a solar system on your roof. You have an HVAC problem. We come up with a solution, we solve it in the morning and we install it the same afternoon and it’s done. And so this whole speed-to-solution sort of timeline is like compressed into what I sort of used to say in the solar industry, it’d be a dream to sell it on a Monday and install it on a Tuesday. Like I couldn’t imagine a world where that takes place. Now in the HVAC thing, we get to do that. The other part to it is there are a lot of technology advancements that have happened in the HVAC world. Heat pumps, the great one, where you can have a very efficient electricity system running your heating and cooling, put a solar system on your roof, offset those kilowatt hours and you have a great 25-year savings sort of energy solution. And so there’s microinverters in these things. There’s all kinds of different variable speed solutions that are available. And most people just don’t know, you know, it sort of feels to me, at least like the solar industry did sort of 15 years ago. And I think that it sort of speaks to the customer because it’s a different dynamic in many cases, right? If you’re an HVAC customer, this happened to me. We’re sitting around in my conference room with smart lawyers and we’re talking contracts and risk and da da da da, paralysis by analysis about HVAC. I go on a trip and my HVAC goes out in the upstairs of my house. Do you know the only question I had? How quick can someone be here?

Doug Lewin (37:23.672)

I mean, especially like the vast majority—I don’t know what happened with yours, but obviously the vast majority of HVACs break when it’s super hot, right? Or super cold, right? Like what are the other—right? Like you need it. Nobody wants to wait. Nobody can wait. I mean, it’s just like unsafe to wait a week, right? You have to replace it as quick as possible.

Brett Biggart (37:44.856)

And then if you also kind of overlay that with our customer base of 30,000 people, they’ve all spent sort of $35,000 on average for a solar system on their roof. They already understand kilowatt hours and long-term savings and peak demand things and all of the sort of techy things that you need to kind of wrap your head around and make that big investment. So let’s go to those customers and explain to them there’s better solutions that are available for your HVAC.

And so that’s what we’re doing. We’ve spent 90 days so far spinning it up and getting it going, getting it kind of fine-tuned in Austin. We launched in Houston, October 1st, and then go into Dallas. It just fits together perfectly in my mind in terms of the solution being sort of on your roof and inside your home. And then it sort of fits our skill set, which is we’ve been talking about solar, which is kind of complicated. We can apply those same things to the HVAC world to explain higher efficiency solutions that are available for customers. And our customers tend to understand that stuff. There are people that are probably on this call—

Doug Lewin (38:47.942)