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July 16, 2006

SAN DIEGO UNION TRIBUNE - Q&A
Kirk Mulligan; co-founder, president and chief executive officer of Clean Power Systems
by Melanie Stevens

In 2003 Mulligan opened his Poway-based Clean Power Systems, a company that designs, markets, and installs solar electric systems for residential customers. The company has installed 200 systems across San Diego County and in Temecula and Murrieta.

Mulligan, 28, started his career after creating a solar energy system for a college thesis. After working for a commercial distributor, he decided to open his own business and target the residential market.

Plans are in the works to open offices in Orange County and Palm Springs sometime next year. Clean Power Systems currently employs 17 people.

Explain how a solar system works.
First, you put a solar module on your roof to convert the sun to electricity. It outputs power that is DC (direct current) and then it goes through an inverter, which converts the voltage to AC (alternating current). Because most people are not there during the day, the system stores the power on an SDG&E meter. It spins it backward onto excess power, which is sold back to SDG&E. When you get home at night, you use that power you just sold back to SDG&E, depending on how much you need. When you install a solar energy system, you change from a monthly billing cycle to an annual billing cycle. Some months they'll owe you, and others you'll owe them.

What would a solar system cost?
A minimum cost is somewhere around $10,000 after rebate. Say the system starts off at $20,000 and the state will pay about 30 percent (about $6,000), so now you'd pay about $14,000. Then you get a $2,000 federal tax credit. The state incentive has been around since 1998 and the federal tax credit was just signed in the energy bill last year.

What are the benefits of solar energy?
What most people have realized is that solar allows them to own something. It's not a question of whether they're going to spend money on electricity, because they will, but will it be to SDG&E or their bank where they're building equity? It's energy independence.

Where do you purchase solar panels?
Our main supplier is Sun Power. But we do use a number of vendors because there is a huge module (panel) shortage. That's actually one of the biggest barriers to entry of this market and for companies like us who want to expand. Solar electricity manufacturers are now competing with semi-conductor manufacturers for silicone, so there's a lot less of it to go around.

Is weather a factor in how well the solar system works?
People in San Diego are always wondering about the effects of the marine layer at the coast. There's what's called a usable sun hour. At the coast you might get five of those hours, whereas in Ramona you might get six. What that means is that homes near the coast need to add more solar panels to make up for the loss of sunshine. There are actually two things that need to exist for solar to be viable option and sun is not one of them. It's high electric rates and a strong rebate program. The second largest market next to California is New Jersey. They don't get as much sunshine, but they have the other two factors.

What do you predict for the future of solar energy?
As problems in the world continue to arise, like our dependency on foreign oil for example, prices begin to increase and politicians' views on renewable energy as a whole will change. I see more incentives down the road for solar and programs to help companies get into the business. As this happens, you're going to have major corporations get involved. The goal is to drive the demand such that the economy of scale will kick in and the prices for solar will come down.