Hitting the tipping point
SolarZero founder Andrew Booth gives six tips on scaling a startup.
Journalist
Mary Hurley
There comes a time for some lucky founders when a startup begins to generate results at scale and speed, commonly known as the tipping point.
Recognising that your company has reached that point isn’t easy, says solarZero founder Andrew Booth, especially when you’re in throes of it.
For Booth, that moment has been and gone and he’s now enjoying the fruits of the company’s collective labours.
Booth started solarZero (then Solar City) from the front room of his Nelson home in 2009, with the aim of reducing the financial and logistical barriers for people switching to solar power.
To achieve this, the company funds and maintains ownership of its solar installations while charging customers a fixed monthly fee that’s less than the average monthly power bill.
To illustrate the tipping point, the company had 104 customers one year after inception. Today it has over 11,000 nationwide and it’s planning to expand into Asia-Pacific in the next couple of years.
Getting to this point though has been something of an uphill battle.
Booth, citing a 2012 Parliamentary Commissioner for the Environment report, says in the early stages, there was a notable lack of support for solar from the government and energy industries.
The report, which considered the feasibility of using solar for water heating, concluded there were better and more cost-effective ways to heat water with greater environmental benefits than solar water heaters.
“You could argue that the incumbent energy industry tried to kill solar at birth in the same way that the oil industry tried to kill the electric car,” he says.
New Zealand changed its tune as countries around the world began embracing solar power as a “key survival technology in the face of climate change”, says Booth – a shift that has benefited solarZero.
Since 2018, the installed capacity of the country’s solar market has increased threefold, from 90MW to approximately 270MW this year.
SolarZero claims a 54 percent share of new residential rooftop installs in the solar market and generates over 89GWh annually. On average, its installation rate doubles each year (as a private company it doesn’t release financial figures).
Beyond New Zealand
The company's reach is poised to increase with a recent partnership with New Zealand Green Investment Finance. The government entity is providing a $170 million loan, which Booth says “helped unlock a roadmap to faster growth here in New Zealand”.
He says that government funding and support is important for businesses attempting to address climate change challenges as it signals the “social credibility” of green investments to private investors.
“Having government alignment around that has been and is immensely helpful because it creates a stable investment environment for people.”
SolarZero plans to invest $1 billion in new solar and battery systems across New Zealand over the next 10 years, in line with the country’s commitment to achieving 100 percent renewable electricity by 2030.
Planned expansion into the Asia-Pacific region is based on predictions it will generate half of the world's energy by 2030, says Booth.
The NZGIF funding comes after BlackRock Real Assets’ acquisition of solarZero last year in a deal worth more than $100 million. That was followed in August 2023 by BlackRock also announcing a partnership with the outgoing Labour government to create a $2 billion climate infrastructure fund.
BlackRock’s co-head of climate infrastructure for the Asia-Pacific region, Charlie Reid, says the move demonstrates BlackRock’s commitment to invest in attractive markets as part of a broader effort to offer global climate investment opportunities to clients.
“SolarZero is a global pioneer, and we look forward to supporting its expansion into other Asia-Pacific markets and, at the same time, to accelerating New Zealand’s net-zero journey,” says Reid.
Though Booth is not contracted to remain with solarZero through the sale, he will remain involved as executive chair to accelerate the company’s growth. His motivation, he says, is having until 2030 to ensure his grandkids have a great place and planet to live on.
Six tips to scaling up
- Trust your team
SolarZero wasn’t Booth’s first startup; he previously founded and directed World Television, a leading European video communications agency.
He’d already learnt that people would be central to solarZero’s success.
Booth is proud that the first two people who started working with him – Tim Savill in accounting and Luisa Giacon in business development – are still with the company.
Continuity of staff has proven invaluable as the business scaled, as early team members kept track of the largely undocumented processes and systems of the company’s early days.
Looking back, Booth says that trust is central to keeping the team – and it goes both ways.
As a founder, he says you need to learn to let go and trust your team to make decisions in the company's best interests. Conversely, the team needs to know that you, as the founder, have faith in them.
Not only does this foster a good team environment, it also creates a robust foundation for idea development.
“More often than not, the solutions or breakthroughs we’ve had have been made by lots of different people – it’s not been one person or one view,” he says.
- Make a plan and execute it
For Booth, a tailored plan is critical for each stage of growth, especially when raising capital.
“I’ve never operated without one,” he says.
The plan helps assess what is needed from future partnerships while providing a valuable reference point for investors.
He says it also acts as an anchor to prove to yourself that you can do it.
Going into discussions about the future of solarZero with shareholders prior to BlackRock’s acquisition, Booth says the plan made it clear the company needed a lot of capital to achieve its goals. That required a “financially mature business” as an investor, he says.
That’s where BlackRock came in. Not only did the investment company offer the necessary funding, but it also came with a network of global specialists, technical resources and a supply chain that could reduce production costs – exactly what solarZero needed.
- Use your networks
The 'two degrees of separation' in New Zealand is real and founders should use it, Booth says.
Whether it’s providing feedback or connecting you with someone who can help you reach the next level, in Booth’s experience, “the great thing about New Zealand is that everyone’s happy to give each other a hand”.
Those networks are equally as valuable as cash, he says. But they are also valuable for raising cash.
He says the BlackRock deal required other people within his network to “unlock” it.
- Learn from adversity
Like all startups, solarZero has faced its fair share of difficulties – from trying to raise capital to navigating the politics of renewable energy.
However, there were also challenges Booth could never have predicted, such as the Canterbury earthquakes in 2010 and 2011.
It proved a “tough” time for the company as the city was an important market for solar, but Booth says it emerged as an opportunity to learn what was needed in a natural disaster.
When the cyclone hit the East Coast earlier this year, Booth says the company was able to put those earlier lessons into action and effectively “keep the lights on for everyone [in the] system”.
- Be accountable
In finding ways to finance and make solar accessible for customers, much of solarZero’s journey has been an “experiment”, says Booth – and it hasn’t always worked out.
“Anyone that you speak to on the founder journey will say, ‘boy, do you make some real mistakes’.” Often, these mistakes can impact customers.
As an example, Booth points to an initial control system issue where an SD card (Secure Digital card) overwrite problem caused certain field systems to stop working.
To mitigate the situation, the company had to redesign the control systems and retrofit new hardware and software. Until the challenges were resolved, solarZero stopped charging impacted customers.
People will be tolerant of mistakes or hold-ups, as long as you are upfront about it, says Booth.
“The main thing is you give them guarantees and support so they know that if things don’t go according to plan, you will put it right.”
- Stay true to your values
Despite solarZero’s growth, Booth says it has always stayed true to its central mission: to stop climate change.
Everyone in the team of 216 thinks and talks about it every day, he says.
While these values influence who the company seeks funding from, he says it goes both ways with the company attracting investors interested in values-aligned partnerships.
BlackRock is an example of this, as Booth says it cares about doing the right thing for the environment and socially.
“They saw what we built here in New Zealand, and they wanted to take that to the world.”
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