Electrical engineer Ethan Simpson, co-founder of Auckland DIY solar start-up GridFree, discusses New Zealand's growing solar market, where the alternative energy market is headed and taking a bet on importing product.
What does your business do?
The main focus of GridFree is off-grid solar - not just the same kind of solar that residential houses have where panels on the roof feed back power into the grid, we include batteries so people can live completely self-contained.
We sell small solar kits and support people so they can set it up themselves, there are a small parts that require an electrician to set up but the vast majority is able to be DIY with our instructions. Our kits are four or eight panels and can be installed in a day or two.
Myself and Craig Simpson founded GridFree last summer, and we're based in the Mt Wellington-Panmure area in Auckland. We've just moved into our own premise in a space in a storage company facility. Before that we were getting product delivered to my uncle's workshop and moving stuff out of the workshop and into our garages; which we did for about eight months.
What was the motivation for starting it?
It all started when Craig bought some land up north and wanted to get power.
Craig: I bought 100 acres that didn't have any power. I called Northpower and they told me it would cost somewhere between $50,000 and $90,000 to get the power on as it needed power poles and transformers. Instead, I thought what I needed to do was build an off-grid solution, and because I'm a little bit DIY I thought I'd go and buy all the parts and do it myself but nobody wanted to help me because the whole industry is set up so that you just write out a massive cheque to somebody and they come and install if for you. It sparked the thought of; 'If it was hard for me, I wonder if it was hard for other people' - I realised there was a market there for people with a little bit of DIY experience but who didn't know a huge amount about solar, but would do it themselves if someone could point them in the right direction.
How big is your team?
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There are us two and then we have Zed, who handles all of our logistics. He has some connections in China so he knows how to talk to people and organise freight. We import all of our parts, our batteries and solar panels from China, and Zed helps us with that. Rachel does all of our marketing and social media work.
What are your plans for GridFree?
Ethan: We're looking to expand internationally because we get people contact us from all over the world, even America. We've sold five to 10 kits to people in the Cook Islands, Samoa and Rarotonga. We try to create something that will cover as many people as possible, instead of the tradie approach of making something custom for every person, so as we have all the processes in place to build that we can look at marketing overseas.
Australia is our next biggest target, then America. The are opportunities in other countries but there's also a lot of competition and it's kind of a race to the bottom with the price war.
Long term, we want to focus on our section of the market which is providing components and very good kits for people instead of trying to move into the market of installation.
Craig: There's massive growth in the rural sector. We've been selling mainly to people living off-grid and an alternative lifestyle like tiny homes, however, farmers run power out to a remote building or shed or water pumps near dams and we're getting a lot of inquiries from them, so we believe that there's really big growth in that commercial sector of rural farming.
GridFree recently had its biggest week in trade ever - tell me about that?
Ethan: That's in terms of sales revenue. At the beginning of this month we got one of our largest shipments ever. We were kind of nervous about what the demand would be after putting all of that capital investment into the shipment but we were surprised at the interest. At the beginning of the month we started selling on Trade Me and our website, and our biggest kits, the freedom kits; we sold three of them in three days.
We weren't expecting anything like this in this kind of weather or this kind of month which makes us really excited for the future and when it gets to summer if this kind of momentum continues.
Craig: We are now at our projected revenue - we will be a $1 million business, we will turnover $1m in sales revenue by the end of the year and we're less than 12 months old. Our first order was $40,000 worth of product, second order was $100,000 worth of product, and investment since then has been consistent of those numbers every three to four months. We're selling on average two to three kits a week and that's propped up with people expanding their kits or buying additional components.
Did you foresee the demand for DIY solar kits and how much potential is there for this segment of the market?
We didn't expect it to grow as quickly as it has but we knew there was something there because when we were doing research to build our own solutions we saw heaps and heaps of people asking the same questions we were after.
Ethan: New Zealand has more daylight hours than people expect and the efficiency of solar means it works really well in New Zealand, even in shaded conditions now.
There's a real growth in off-grid as it seems like the cost to get power connected is rising, and the cost to go solar is decreasing. There is an increasing demand in New Zealand, especially in Northland, for lifestyle blocks, which are one of the prime candidates for off-grid alternative energy solutions.
What advice do you give to others thinking about starting their own business?
You'll know once you have a good product. When you have the right product-market fit you'll know - people will come to you.