Chris McGrath, 5B, Revolutionising the Solar Industry with MAVERICK

Very excited to introduce you to Chris McGrath (co-founder with Eden Tehan), who have developed their flagship MAVERICK solution aimed at revolutionising the solar industry -

"We're reimagining solar energy deployment – developing cutting-edge technology that drastically reduces the time and cost of deploying ground mount solar." - check it out at https://5b.com.au

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Transcript

- Philip Bateman, Bravo Charlie here, with Chris McGrath from 5B at the Australia China Renewable Energy Forum, and Chris, that was a pretty amazing presentation and you're keyed into some pretty amazing stuff that's going on. Can we start with what is 5B, and what is Maverick?

- Sure, thank you very much. 5B is a technology business, based in Sydney, and we're on a mission to accelerate the transition of the global energy mix towards clean energy. Maverick is our flagship solution, which we believe will be the world's lowest cost, fastest, and easiest to deploy solar power plant. It's a prefabricated system, it's built in a factory, and rapidly deployed on site, about 10 times faster than a conventional solar farm.

- And what are the problems with traditional installation of solar?

- We see traditional solar plants built in a construction infrastructure mentality, which really doesn't respect or reinforce the underlying elegance and simplicity of the solar panel, which can produce electricity with no moving parts, which is kind of miraculous. And really, we've tried to reinvent the way that we deploy the solar farm. We specifically say "deploy" and not "build", to really respect what a solar panel can do, and the simplicity of that. So we're shifting from a construction mentality to a product production mentality and really turbocharging that with production, factory-based efficiency and scale.

- And that opens up some innovative financing models, doesn't it?

- Yeah, absolutely, it's one of the really interesting parts of the solution; because you have a prefabricated product that then is inherently re-deployable, you can wrap security packages for finance solutions around that in a much more powerful way. So for example, lease finance becomes a very real thing, so we're talking to lease finance providers about owning our assets and leasing them to mine sites in the same way that a mine site rents a yellow Tonka Truck. They can then rent a Maverick power solution, so that allows us to compress contract periods or commitment periods down to in the order of a few years, which then removes one of the last barriers to solar PV on mine sites for example. So that's a pretty rapidly growing market and a new direction for solar as well.

- And what came through in the discussions we were having, is that conflation between resources and renewables, the resources industries and the renewables industries, which traditionally people have seen as like a hard line, "Oh if you're doing oil and gas, you're not going to be doing renewables."

- Yeah.

- Devil/angel kind of thing.

- Absolutely.

- Your thoughts on that?

- We have a Texan oil and gas guy working for us. I think that we recognise that there's a transition that's required, and by definition, to transition you need to collaborate and diffuse knowledge and build a bridge between two sides. So absolutely, starting from university and a solar degree, we could get kind of militant in our ideas about oil and gas, but I think now we see that there's a whole lot of grey in that area in terms of what industry needs to continue to do its thing. So for example, like, the resource sector extracting metals to use in solar panels, all mining is not bad, it needs to be done in a responsible way, and part of that responsible way is to use renewable energy to power it. So some of that, some of our biggest projects to date have been on oil and gas sites. We power some of Santos's oil wells in the Moomba Basin with solar, somewhat ironic, but it's a really interesting kind of application. We power an oil transfer terminal down in South Australia for Santos, we're building solar on a gold mine in Western Australia, we're about to deploy a small solar farm on a coal mine in Kalimantan in Indonesia, so really the full spectrum. But we do see that as a transition, and that's a starting point to start to transition away from fossil fuels, and towards renewable energy.

- And you mentioned why having this easily deployable energy solution, it creates really a new way of looking at industrial deployment. Can you touch on that?

- Yeah. We do, I guess, immodestly describe what we're doing as a paradigm shift, because we see that on multiple levels - on a product level, and on a solution level, and on a financing level, and on a design, and applications, and customer experience level - the idea of getting towards a fully modular, pre-engineered solar farm in a box is an incredibly powerful concept. So I think originally as technology developers, we decided we wanted to make a solar farm that was really quick and fast to deploy, but now as an evolving business we're actually discovering some deeper kind of, power behind the technology solution from all of those broader aspects. And it really starts to unlock a lot of different benefits and a lot of different ways of doing things. So for example, in our vision of the future, you go to the 5B website, or the Maverick platform, it might be branded with our customers brand, and you'll be able to design, scope, price, procure and have delivered a Maverick solar farm. All online, all through a platform that is fast, and easy, and quick to use. So some of it's actually becoming about tackling the soft cost behind projects, and the kind of barriers to uptake, as well as doing that with a hard product that does something powerful as well.

- I was interested in one of the other presentations where a gentleman was talking about the - it might have even been yours - that the cost to maintain assets is going to get to a parity point where it's simply cheaper to install renewables on top of it.

- Yeah.

- And that to me- I've been in power stations and things, listening to people talk about the- how basically because they keep selling the power stations to different owners, nobody's ever doing the maintenance on them.

- Yeah.

- So we're getting to this point where a lot of the coal assets are just going to- they're just grinding to a halt essentially.

- Absolutely.

- And one year of operational cost is much cheaper to just put solar in.

- Yeah, totally.

- Looking at your deployment video, which I'll include in a little corner so people get to see that, sh, sh, sh, sh, sh.

- Awesome.

- What do you do when grass grows under the panels.

- We use robots. So to your point about O&M, or maintenance, operations and maintenance, we really try to tackle the solution from a cost of energy perspective rather than just a capital cost perspective, because we have a lower yielding system and therefore we're short changing someone if we just say, "Ah, it's cheaper", because it's cheaper, it produces less energy, but over the lifecycle of the project you have a cheaper cost of energy from that equations.

- Yeah.

- Part of the cost of energy is lifecycle costs of the asset, and into something as- in one of the slides I was talking about, inflating labour cost bases in different markets, in solar PV projects, the capital cost is reducing much faster that the O&M or the OPEX cost is reducing because that's more pegged to labour which is inflating over time. And therefore innovative methods around O&M, including use of robots, and automation, and more sophisticated tools, and imaging, drone images, and AI or machine learning for example, is definitely an important part of our ecosystem as we grow the technology to include not just the underlying prefabricated folding solar farm, but the whole suite of solutions and platform that you need to operate that, to produce low cost energy for its life.

- And to go back a little, your journey to commercialisation?

- As a business?

- Mm-hmm.

- So our-

- 2013 you started.

- Yeah, our light bulb moment happened in a paddock in Western New South Wales, which consisted of a couple of solar panels, kind of resting against each other, and then a long drive back to Sydney with the creative juices on overdrive.

- So you're, was that a group of you?

- Myself and my co-founder Eden Tehan, and we, from there on had a burning hole in our brain and needed to explore that and develop that. And then we started with backyard prototypes, then we had a dusty sand quarry workshop in a shipping container on the outskirts of Sydney, then we had a small old panel beating workshop in Marrickville, and then a pilot production facility, and then a 3,000 square metre production facility, and now we're actually starting to, I was going to say ramp back, but we're starting to focus and tailor more of what we do, per our model, we now work with ecosystem partners that assemble our product for us, to allow us to focus on R&D, and pilot production, and where we add most value. Which is an exciting time, it's allowing us to not do so much heavy lifting around all the parts of our supply chain, and also develop some really powerful collaborations with people that are better at doing things than we are, such as manufacturing.

- Switching to an ecosystem model isn't a traditional linear growth curve, how did that smarts enter the business?

- As in where did the idea for the ecosystem model come from?

- When did you step back and go, "Hang on a second"-

- Yeah, I think that it's been- the idea of licensing the technology has been fairly core to our strategy for a long time. But we didn't really identify that as being the full ecosystem model that we can describe now, and which will continue to evolve, of course, into a much more mature model in time, until I'd probably say the last 12 to 18 months. So I guess now we've recognised that it's not just licensing a product to a manufacturer, but our ecosystem actually consists of the input components, and manufacturing those, the assembly process, the deployment process, the value added reseller process, which is sales, marketing, project scoping, design, optimisation et cetera, and then asset ownership and operations side of things. So we identify each of those roles as ecosystem partners, and functions that we're developing internally the blueprint for, to then be able to externalise to those partners.

- And you've gone beyond a concept, haven't you? I mean what countries are you in now?

- We've built projects in Australia, we got our first project, sold in Indonesia, that will be on the ground early next year. And we've got sales offices in South Africa and Germany. And certain interesting partnerships, developing in the U.S. and North and South Americas as well.

- Yeah, wonderful, and as an Australian start-up, as an Australian tech, hardware start-up, you're now at a capital raising phase, is that the case?

- That's right, we're going through our Series A, so we've done a series of seed rounds over the last five years, the first two years were a bit slow, we were doing R&D in a backyard.

- Yeah.

- And the last three years we've been growing pretty quickly. We're 30 people or so now, so maturing quickly, and the position we see ourself now, is that we have a proven technology, commercialised technology, a very clear picture of the model and validation of the model that we want to use to grow that around the world, and now we need cash to propel that and to propagate that around the world, which is a really exciting juncture to be at as a business as well.

- Potentially because of my personal exposure of having worked a lot with Atlassian, who to me is another amazing Australian success story on one of the preeminent ecosystem, like if you want to look at a good ecosystem where you have a core product and you spin off value for the people associated with you, Atlassian is like the gold standard. And, which brings me to a bat-shit crazy project, where the engineering checks out. I'm so excited about this, please tell people that may not know. And congratulations!

- The Sun Cable project is a bat-shit insane project which the engineering checks out on. It's a customer and partner of ours that's developing the project, we can't claim the credit for it. However, we're the preferred technology for it, so we'll be building for them the world's largest solar farm in about four years time. It's a 10 gigawatt solar farm in Northern Territory of Australia. Exporting power to Singapore via 3,800 kilometre, high voltage DC power link, similar to what's between the mainland and Tasmania, The Basslink, just a much larger version of that.

- Yeah.

- It's also got 20 gigawatt hours of battery storage, mainly at the Australian end, and some at the Singapore end, so it really is a lighthouse project for the industry and for Australia as a country and what it can be doing with its renewable energy resources. And for us, it's a very powerful North Star to our vision and our roadmap for our technology. We started in a small sandpit of Australia, building projects all over the country, and therefore can be mistaken for that being our target market whereas our mission has always been to build massive solar farms at the lowest cost possible, and this project really exemplifies that for us.

- Wonderful, and just to touch on, if you didn't realise, the cable would be running under the sea to Singapore, because there's a big ocean between Australia and Singapore. First wave to next wave of solar? What's going on there?

- So we see this as really underpinning the paradigm shift, or driving the need for the paradigm shift, that we are driving. Which is that, historically solar PV modules has been very cheap, low cost, coming down dramatically and that's really driven all of the, well not all, but a lot of the growth in the solar PV market, that's now at 100 gigawatts or so of scale, which is incredible and massive, and no one could have quite predicted that 10 years ago. I'm sure a few people did, but the broader market certainly didn't. However, the balance of systems side of projects, the construction costs, the steel, the concrete, the deployment, the labour, the cabling, everything but the solar panels and perhaps inverters, is not dropping at anywhere near the same rate, and we kind of describe, a little bit cheekily, that the balance of system side of the industry has been a bit lazy and had kind of ridden on the coattails of solar PV cost reductions, and we're trying to change that.

- Yeah.

- And that comes back to our philosophy around saying, solar panels are a simple commodity product, come out of a massive factory, we should be building those projects in the same way, and that's the best way that we can respect the underlying elegance and low cost of that commodity product, to deploy it into the field in a commoditised, productised scalable way, and therefore converting the construction exercise into a product assembly and rapid deployment exercise.

- Yeah, I've been to the Trina Solar factory in China and seeing- oh they've probably got many aside from the one I was in, but the headquarters, and essentially your solution is including hinges between the panels, and then concrete railings that they sit on, with a steel tension cable so they unload to the relevant distance.

- That's right.

- And then you drop them on the ground.

- Yeah.

- And you can do that from the factory.

- That's right.

- So why wait for months worth of mounting pile installation and things?

- And our model really enables; we may not be working with solar panel manufacturers directly to produce our product, we may well be, depending on where the future takes us. Our ecosystem model kind of allows us to do that if we want to, and if they want to, however in a physical sense, regardless of who's making it, it allows us to cut a hole in the side of the module factory, convey modules across the road and be taking modules directly into a Maverick factory that is building solar power plant blocks, rather than just pallets of solar modules.

- Yeah.

- Which logistically, is obviously awesome.

- Yeah.

- Less packaging, better shipping, streamlined logistics.

- Yeah.

- And also results in the underlying product, which is a very low cost building block to deploy a solar farm.

- So you can essentially diversify or increase the value capability of the module manufacturers and leverage their existing scale.

- Yeah, whether it's a modular manufacturer that's doing it, or a partner of ours, co-located with them, time will tell, however either way, it's putting all of that time, cost and risk into a place where it should be dealt with, which is in a factory.

- Yeah.

- And anyone who runs a factory production and has also had experience on a construction side, will choose a factory any day of the week, for wet weather risk, access to labour, the cost of that labour, efficiency in the factory, quality control, the list kind of goes on.

- Yeah.

- It's a bit of a no-brainer once you start to run a factory rather than run a construction site.

- Yeah, and you've got access to a lunch room, and a toilet, you don't have to do it in a field.

- It's the simple things.

- It's the little things.

- And it also from an economic growth and a job creation perspective, solar PV construction jobs can be challenging, as typically fly-in fly-out work, they're in regional towns, there will be some regional benefit, yes, but there's generally kind of a migrating labour force that are building these projects.

- Yeah.

- Whereas for us, we're able to provide long term, consistent employment in a factory environment that is ongoing, and stable. So actually thinking from a jobs perspective, it's actually a very interesting kind of transition as well.

- Yeah, because you can make solar manufacturing town, and then ship it where it's relevant.

- Exactly, yeah.

- Beautiful. For people who've watched this, what would you like people to get in touch with you about? What are you looking for from a business perspective?

- We're right in the thick of our Series A at the moment, so investment is obviously kind of high on our priority list. We're interested in investors, either from an impact investment perspective, or from a strategic investment perspective. Generally not just passive finance, but people that can really add value to our business as it grows around the world. And secondly, projects, we want to build more projects. We definitely like customers who are progressively minded, and understand the journey that we're on and what we're trying to achieve, so that we can really work with them to realign their business, and their customers, and their customers customers businesses to wield the power of Maverick in the best way that it can be. Which for any new technology, is not always a straight-forward exercise for the first one.

- Yeah.

- But every one of our customers comes back for more, because once you've done it once, it's faster, and easier, and simpler to just continue to... I guess I've just described the perfect customer that we're looking for, but there's no harm in asking, so-

- Absolutely Well, that's the future, the future's here now, get on board, if you're deploying assets and you need to power them because you do, use the sun. Pretty straightforward really.

- Well said.

- Thanks so much for your time, yeah?

- Thank you.