Wednesday, March 22, 2006
Interview with Brad Hines, Practical Instruments
Brad Hines is the CEO of Practical Instruments (www.practicalinstruments.com), a new startup in the Los Angeles area that is in the energy space. With energy receiving an increasing amount of attention in the investment area, I thought it would be good to talk with Brad about how the company fits into their market.
Ben Kuo: What is Practical Instruments, and what are you developing?
Brad Hines: We are developing solar panels that generate electricity that cost a lost less than today's solar panels. What's unique about our company is that, although there are quite a number of companies doing solar concentrators, they are difficult to install and manage. The shape and size of our product is of a regular solar panel, which makes it easy to install for the channel, existing VARs and installers.
BK: Energy seems to be a hot area right now, with lots of startups. How are you finding interest in your company by investors?
BH: We've had a lot of interest in the company, and this week we are presenting at the Cleantech Venture Forum. We've also pitched our company at the Tech Coast Angels Fast Pitch event. We've got customers interested in our product, and two letters of intent from customers who want to install our product. There's lot of interest.
BK: Tell me a bit about the market—how is your approach different than others?
BH: The problem is that solar power costs too much. Experts say that when you can get down to an installed cost of 3 dollars per watt of power production, the market will take off. That's when solar power will equal the cost of other forms of electricity, at the retail level. We're going after the rooftop market, and believe we can hit he goal of 3 dollars a watt with the rebate in California, and stay below that even after rebates go away. It's cheaper than electricity you buy from the power company.
BK: Haven't solar concentrators been done before—why now?
BH: The economics of solar power have changed in the last three years. At the macro level, the Kyoto Accord and the Carbon Treaty have had an effect, and there's investor interest, of course. There are $3.9B in incentives and tax credits from the Federal government. Plus, with the same solar cell today—from any of the top manufacturers—are 30 percent more efficient than in 2000. That drastically changes the economics for regular solar power by 30%, and for us much more dramatically. The thing we're doing different is that we didn't set out to build a solar concentrator, designed our products to be flat, like a solar panel. The alternatives are a bit unwieldy.
BK: Does a concentrator have more moving parts?
BH: We have a single motor which moves the concentrator throughout the day.
BK: Are there others in this market, designing solar concentrators?
BH: Of course, there are many companies. The well known ones are Energy Innovations in Pasadena, and Pyron Solar in San Diego, which is focused on utility scale concentrators. Companies are differentiated, with some going after the rooftop market, and others after the utility market. We're after the rooftop.
BK: How long before your product are available?
BH: We're shipping early adopter units later this year, and ramping to volume in late 2006 and early 2007.
BK: I understand you're looking for an angel or VC round right now. What are you hoping to do with that round of investment?
BH: Well, we want to build first 100 units. We want to get our Underwriter Laboratories listing, and staff up to do sales and technical work.
BK: How far engaged are you with installers?
BH: We've got a letter of intent from several companies to participate in our early adopter program, and have interest from several more. We're talking to the largest installers in the state.
BK: What's the background of the founders?
BH: I'm the CEO and I cut my teeth at NASA's Jet Propulation Labs, where I worked for 14 years on space telescopes. Space telescopes are important, because they have the same components as concentrators – optics, electronics, and high reliability engineering. I learned this all on space telescopes, and then I went to Energy Innovations, where I was VP of Engineering.
BK: How about the others at the company?
BH: The core team has been working with me for 10 years. They were at JPL, and followed me to Energy Innovations, and they're now here. It's the same basic area—space telescopes, solar concentrators, and now our new kind of solar concentrators here at this company.
BK: Finally, what's the toughest part so far of starting up the company?
BH: There are so many things that are not building the product. There is a lot of making everything happen—every day, day in and day out to get company going. We've got the technology and people, and just have to do the rest of the stuff to make the business successful.