967: Why U.S. Solar Costs 2–3x More Than Australia | Barry Cinnamon

0:00Suncast is proudly brought to you by CPS Americas. Hey, Solar Warrior, welcome back! A bit of a setup on today's episode. Not long ago, I sat down with Barry Cinnamon, founder and CEO of Cinnamon Energy Systems and genuinely one of the icons of our industry. He's been at this since 2001. We were in front of a live audience for this conversation at Inter Solar and Energy Storage North America, 2026, down in San Diego. Barry had been chewing on something that bothers a lot of us. Australia is putting solar and batteries on homes for about $2.00 of what, in some cases, actually much cheaper. Here, we're closer to 5, sometimes 5.50 of what? Same panels, same batteries, comparable safety rules, so Barry does what Barry does. He built his winter holiday around going to Sydney. Sat down with all the Australia insiders and installers that he could find. He came back with a category by category of tear down of exactly where that extra 3.50

1:06of what disappears to. I'll tell you now, the answer is not the one most of us give. It's not soft-cost. Barry ran the math on his own company and it doesn't get him anywhere near the $2.00 of what. And he'll show you what does. Now, this conversation ran long enough that we've split it up into two separate discussions. Today is the cost story of Australia versus the US and what would actually move the needle if we wanted it to. We'll publish soon. Barry's other half of the conversation with a completely different viewpoint, if you will. A concept for getting data centers to pay for your neighbor's rooftop solar. Now that one involves a jar of walnuts and I'm not going to spoil it for you. Let's get into this one. Even digging around into why the US solar and battery costs are so much higher than places like Australia, Barry. So I wanted to have you come demonstrate and illustrate for us what you have uncovered.

2:08I've always puzzled by costs of solar around the world. Germany has historically been cheaper than the US. And then recently there's been a lot of people saying that the costs in Australia are 60 cents a kill without a first solar and the dollar ten or so for batteries. And I'm just kind of running the numbers of even if I got the equipment direct from China and had no hassles in the US, it would still be a lot more. But I'm just wondering why it was so cheap. It just so happens that I didn't go to kind of design my winter vacation around going to Australia, Sydney, and then hung out in New Zealand after that. But really just to try and understand what we could possibly do here in the US to bring those costs down. And typically we hear about the issue being soft costs. It's basically not the hardware, but it's all the labor, all those permitting and things like that. And I look at the numbers from my company and even if I were to wipe those out, I'm still not getting down to 60 cents a kilo. So I dug into it.

3:09And what I found, and by meeting with a solar's in Australia and spend a lot of time there, diving into it, the real costs of solar in Australia before tariffs, two dollars and four cents. Okay. That's with a battery. With a battery. Two or four with a battery. Okay. So in Australia we're at two bucks a lot. Right. And then the US typically, it's about five and a half dollars a watt for a decent system with a battery. Huge difference. Why is that difference? So I'm starting to drill down and looking at those individual categories, the module, the batteries, the tariffs, the labor, the supply chain, the profits, all that. And this chart over here kind of shows those specific differences, category by category. And then I say, well, what can we fix? So first of all, I looked at solar in a battery. And since everybody's always talking about just solar, when I looked at the numbers in Australia, it's 82 cents a watt for just solar. That's pretty terrific. Yeah, of course. Now they have it at a 15 cent a watt incentive, which is, which is nice. Okay.

4:10We're at 330. We're at 330. Yeah. That's incredible. And so why? When I looked at it, I realized there's a lot we can do locally. There's a lot we can do statewide. But the biggest drivers of these high costs are US federal policies. No way. It's it. Go for it. It's go federal pause. So it's the manufacturing policies. You, aluminum, extrusion for frames of solar panels. First we have to pay US rates for aluminum. We don't sell a lot of aluminum here. The machine is expensive. The transportation is expensive. So that's a big one, manufacturing. We don't really have any fully automated lines right now for silicon and cells and everything else. Although we have assembly plants. So that's one. The second is regulations. Yeah. We have safety regulations. So Australia has them. They're comparable, but our labor costs are higher. The tax finance and business policy. Wait, the regulations are comparable, but we're five times more expensive. They have regulations three times. But it's still when you look at the numbers and they're still higher.

5:11The business policies are higher. And this is kind of interesting. When you look at how we have tax credits. Yeah. And again, three X. It's three X. And then finally, the direct tariffs and duties. So you look at Australia. They get good but very inexpensive racking directly from Shanghai. Yeah. The modules come directly from Shanghai. It's pretty good product. Battery systems are also very, very, very, as a result, no domestic racking in Australia. No, I don't think there's a domestic anything in Australia. Well, I guess that's going to be the corollary is that the market that we want to incentivize. But carry on. So we have to figure out what we're trying to solve. There's two problems. We want to solve. Australia is arguably much closer to Shanghai. It's closer. Do we want cheap energy? Do we want to create jobs in solar and manufacturing? I thought it was yes and. Well, my view is, let's fill the installation queue. Let's get those construction people to work. That's going to automatically drive in demand and it increases the quality of jobs.

6:14They're good jobs. Yes. When we look at these high manufacturing costs and our manufacturing policy, every four years we have a different president and they change the policy. I mean, it's push one, push two, Obama, Trump. Yeah. That's just a mess. So we just don't have steadiness. And if we were to put steadiness as far as putting those solar manufacturing policies in place, we would have factories making refined silicon, ingots, modules, the whole thing. But it just keeps changing. And that's even worse for batteries. We're going into the same cookie cycle. Yeah. You know, what's the lady's name that worked with Libric that does all the studies? She's Jenny. Jenny Chase did an excellent study on this. What kind of jobs do we want to incentivize? Do we really think everybody wants to be the kind of factory worker that is employed in China and these factories? Or do we want to incentivize folks to have more skilled labor? She wrote an interesting, she did an interesting interview with Bloomberg New Energy Finance and Jenny Chase, she's, you know, godness.

7:15She basically said, manufacturing solar panels is a really crappy business. That's right. And, you know, the Chinese, they kind of come and go, same thing in the US. They go and they go. It's just so incentive driven, so many changes. You basically have to redo the factory every three or four years, right? Right. Technology. When you're looking at the solar market, you have to ask who is the partner you can really trust for the long haul. That's why I hope you'll take a closer look at CBS America and see how they are shaping the industry's next chapter. The evidence is clear. Woodback has confirmed them as the number one market leader for stringin' verters in the US for eight straight years. It's nearly a decade of sustained dominance proving their reliability and cost leadership are unmatched. But they're not just resting on their inverter success. They've extended their leadership into energy storage. In fact, their fully integrated Gonzo ESS is the best in class platform for C&I, built for maximum simplicity and revenue generation.

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9:24a five-star rating and enthusiastic review. That's possibly the single kind of thing that you could do for me today. So if the show has helped, inspired, or even entertained you at all, I'd love it if you would head over to ratethispodcast.com-slazhe-suncast and give me a virtual two thumbs up. All right, back to today's episode. Coming back to it, what are the things that we can do? What are the most effective things we can do? I'm going to skip down to the very bottom. We are making progress with state-by-state permitting, regulation, interconnection, solar app. That's terrific. But if we really want to get down to really cheap, installed solar, it's eliminating the tariffs, eliminating interconnecture requirements, engineering around the technical requirements, and creating a cheap and simple national solar financing. Which is a little tricky. What does that look like? The green bag. It looks like the green bag.

10:24But what's app? Capitalism. Yes, you have competition. You have other companies that specialize in their business of providing solar financing, and that kind of, they're not supporting those financing tools. So it's tough. Yeah, we had a good conversation with Rovey Mikkelsen from Atmos about this. He points out a couple of things. His sort of the gong dealer fees and commissions. If we could somehow adjust them, we would get closer to the goal line. But it's still a very effective business model to drive very fast installations by just having door-to-door people knocking on doors and unfortunately lying, saying they're with the utility, and they're trying to make a quarter million dollars to be at the top of the solar bro club. Yeah. I was totally aghast in the interview I did with TJ last week that he said door-to-door is still the number one way to sell solar. I'm glad you mentioned that to me. It's a two and a half hour interview. It took me three workout sessions to go through the whole thing. I backed it up to the tub one minute, 12, one hour, 12 minutes when it started talking

11:29about the integrations he did with the cobalt, sunda, and the ambiator something. And fascinating. Not my cup of tea. I'm not knocking, door-knocking everywhere, but I'll tell you if you're trying to build this sustainable solar business, it's not by pounding on the door and persuading people to buy something. It's getting them to buy something reasonably that they'll repeat. Very, any parting thoughts on kind of wrapping up what you, what are your takeaways after your junket to Australia to uncover how we can be more cost-capative? Well, let me tell you the reason. Let me give you another example. So when I was in Australia, I met with a homeowner there's getting the installation of solar and batteries put on their house. The solar was on the roof. Fine. The guy pulled up in a truck looked like mine. They're putting in the batteries. Cruise looked just like mine doing the same work. Ty and very safe. Neighbor comes over and says to the installer manager and he said, I'd like to get a quote for a two kilowatt system and 40 kilowatt hours of batteries.

12:32Wow, that's very specific. I just, my jaw drop. Wow. Run on the mat. That's a tiny amount of solar and a hell of a lot of batteries on a normal size house. Afterwards I talked to the installer and he said, well, in Sydney they're coming up with a plan where electricity, you can draw as much electricity as you want in the middle of the day. It's free. So you don't, you can charge your batteries from the grid. That's right. But then it's like, why did he want 40 kilowatt hours of batteries? There's an incentive in Australia in Sydney. The incentive is $370 per kilowatt of batteries. Wow. And there are companies that are selling batteries for as low as $270 per kilowatt hour. So the more batteries you buy, the more you make. The money maker. Yeah. So, what can we do? Well, first of all, that's a irrational incentive program. But I think in the US, what we can do and we've had it and hopefully we'll have it again in some kind of rational incentive program that helps it's maybe a financing program.

13:34It's just, you know, another kind of tax credit, which worked really well. But we'll see. Okay, that's a wrap on this part one with Barry Senate. And here's what's stuck with me. We spend an enormous amount of energy in this industry, arguing about permitting and soft costs. And I think those really matter and they do. And we are making real progress on them. But Barry's numbers say that the biggest part of the gap still sits upstream of all that are manufacturing policy. Tariffs, the structure of our tax credits. And underneath all three of these, the fact that we tear up the rulebook every four years and start all over. Australia didn't out innovate us. They just stopped getting in their own way. The other thing I can't shake is that neighbor in Sydney walking over to the installers truck and asking for a quote on two kilowatts of solar and forty kilowatts of batteries. And that's not somebody making an energy decision. But somebody responding to an incentive exactly as designed. Get the incentive wrong and people will follow it straight off a cliff.

14:35They're right. You end up with the cheapest distributed capacity on the planet. We've done both in this country. So we know it cuts both ways. Alright, next time we have Barry back on, he will move from diagnosis to prescription. His concept for making data centers fill for rooftop solar and storage. If you're anywhere near the data center conversation right now, and at this point who's not, you'll want to hear that one. So make sure you peruse the feed soon for Barry's next episode. And if you're not subscribed to make sure you subscribe and hit the bell. That way you'll be notified whenever that episode is live. Remember, you are what you listen to. Thanks again for showing up, Solar Warrior. It's half the bat.