This morning I awoke to a dark room which normally has a lit night light. The Los Angeles Department of Water and Power had done it again. Yes, we were undergoing another outage from one of our nation’s largest city-owned power companies. My alarm company quickly sent me an email that they had detected the outage and that we should respond if we were concerned. What were our possible courses of action? NONE! We had no heat because our gas heaters are dependent on electricity. Our refrigerators and freezer were already beginning to warm, and our electric coffee maker was cold to the touch. The outage was over by 10:00am and all our electrical appliances were once again operational. An inconvenience, certainly, but one easily endured.
Wait a moment: If we had an infant or young child in the house, or if we had an adult with serious health conditions, it would clearly not be just an inconvenience. This outage could easily have led to a 911 call. Outages are not just the result of lack of maintenance, they may also be due to a Ransomware attack, as recently occurred with Colonial Pipeline on the East coast. Also, they may be due to a supply shortage (brownout) during high usage periods.
Let’s look at some of the major components of our western power system and how it works. First, is the source of power. Sammy Roth recently wrote in Boiling Point, a review of power sources in the Western United States. Where he described the decline and eventual abolition or retirement of the twenty coal-fired power sources in 8 western states. Two years ago, these twenty plants had a long-term future. Now, 10 of them are scheduled for shutdown and the last 10 have a very limited life span. There are approximately 35 nuclear plants in the rest of the country, many of them scheduled for retirement. They are being replaced, in some cases, by LNG (Natural Gas), but in many cases by Solar and Wind. California has a state policy to be 100% renewable by 2045. California also has its own grid, like Texas, where we import a substantial amount of our power from the four corners area (Coal and LNG gas) and other Western states.
The most difficult major component of our state managed power system is the Grid. All those poles and wires are necessary in some form to transport our energy from our various sources to our homeowners. The ongoing construction and maintenance of this Grid is expensive and, arguably , not done very well. Roof top solar does not require a huge grid system because the power source is right next to the power usage. Bingo! Fewer fires and lower costs.
Solar systems , in conjunction with Battery systems are the wave of the future. California, currently, has approximately 1,300,000 roof-top solar installations. That is about 10-12% of the total number of residential homes in the state. Prices for solar cells and related components are dropping rapidly. California is planning to phase out their one remaining nuclear plant, Diablo Canyon, in the next few years, unless the Governor grants a reprieve.
SOLAR & ALARM PARTNERSHIP INTRO AT CAA CONVENTION IN PALM SPRINGS
In prior articles we have speculated that Solar and Alarms are symbiotic and that they will soon be sold as a package to homeowners and commercial customers. Vivint was the first alarm company to understand this new paradigm and now ADT and Brinks-Monitronics , with their large dealer bases, have joined the party. Industry rumors suggest that many more alarm companies are interested in this new installation arena and increased RMR.
CAA-Palm Springs welcomed a new company, Complete Solar, to the Alarm industry. Their current focus is on developing partnership arrangements with alarm companies. They are currently in 30+ states and looking to expand. Why partner with alarm companies? There is an easy answer to that question…alarm companies already have a relationship with the prospective solar customer. Increased sales revenue, cash flow, and RMR will be the immediate benefits to the future focused alarm company. In addition , there is every likelihood that financing Solar and alarms can be done at the same time which will strengthen customer loyalty and reduce attrition. Give them a warm welcome when they call, they just might be the vehicle to move the needle on your profitability dashboard.
Tony Smith is a Past President of the CAA and a former member of the Board of ESA. He is the Founder, President, and CEO of Security Funding Associates, a leading industry financial services firm focused on No-recourse financing for small to medium sized alarm companies. He may be reached at TSmith@SecurityFundingSolutions.com or (855) 723-2229