The IREC Interview: Tal Mamo of United Wind
Tal Mamo is co-founder of United Wind, where he is responsible for the development of new markets. Tal has served on the Board of Directors of the Distributed Wind Energy Association (DWEA) since 2011. He also serves on the Board of the Small Wind Certification Council (SWWC). Previously, Tal founded Talco Electronics, a wind turbine distributor and installer, where he engaged in operations in 28 States and territories, as well as international projects. Tal has a B.S. in Electrical Engineering from California State Polytechnic University – Pomona. In addition, he has his pilot’s license and claims to be as comfortable in the air as he is on his feet.
Thank you so much for agreeing to this interview. We especially appreciate it, given how busy we know you are right now.
My pleasure Larry, thank you for the invitation and allowing us to tell our story to your readers.
Leasing is a hot topic in the Distributed Wind Generation world. Can you explain to our readers what this model is and how it might be utilized with small wind?
The solar industry has been revived since they began using the leasing model over 5 years ago. It has helped renewable energy projects come into the reach of mainstream Americans. Now that same model is being applied to the distributed wind world and it’s poised to change the industry in the same way.
To better understand how leasing works and why it is such a benefit to small wind, it is important to take a look some of the challenges to installing a system and how leasing solves those issues. As you know one of the key incentives for small wind is the federal ITC (Investment Tax Credit), which allows the system owner to enjoy a 30% tax credit on the total system cost. For example a residential sized wind turbine might cost around $100,000 installed which would then qualify for $30,000 of tax credits; similarly a larger system for a farm or business might cost around $400,000 installed and would receive $120,000 of tax credits. The challenge for most property owners has been two-fold. First, a large upfront investment between $100,000 and $400,000; and second, being able to monetize the federal ITC to get the $30,000 to $120,000 in tax credits. Most property owners can’t monetize the ITC because they don’t have to pay that much in federal taxes. They therefore lose the benefit of the ITC, which makes the project unaffordable on the whole.
With our 15 years in the industry, we’ve seen these same issues play out time and time again. United Wind came up with a solution: a WindLease. With the leasing model, United Wind is the actual owner of the system and can qualify for those tax credits. To that end, we’ve raised over $25 Million to finance small wind systems, which enables us to monetize all of the tax credits and incentives through our tax equity partners. This arrangement allows us to install those same small wind systems for as little as zero dollars upfront and charge a small monthly lease, typically 25% less than the customer’s current electric bill, resulting in instant savings.
Since United Wind is technically owner of the system for the term of the lease, the property owner has no out of pocket expenses for the turbine other than the monthly lease payments. This helps make installing the system even more affordable by reducing the total cost of ownership, which many times is overlooked in a purchase scenario. With leasing a wind turbine through United Wind the property owner enjoys 20 years of warranty, maintenance, insurance, and an industry first: production guarantee.
What potential does leasing offer the small wind market?
The potential is huge, just look at what leasing has done for the solar industry. Solar has seen exponential growth and a dramatic reduction in price since the adoption of solar leasing. In my opinion leasing is the way forward for the small wind industry. With leasing, using distributed wind energy is as easy as using power from the grid, and we can to do it cheaper! To illustrate the potential a bit more for some of your readers who are selling small wind turbines, I would like to pose two scenarios. Imagine knocking on a potential customer’s door and offering to sell him a wind turbine for $100,000 with a 10-20 year payback, only 5-10 years of warranty, no insurance or maintenance coverage, and no guarantee of how much energy the turbine will generate. Now imagine knocking on that same door and being able to offer savings of up to 25% on his electric cost with little to no money down by installing a wind turbine with 20 years of included warranty, maintenance, insurance and production guarantee. The second scenario, equivalent to selling a WindLease, is clearly a much easier sale. In short, there are millions of property owners across the country that can benefit from small wind and leasing makes it a realistic option for them.
From your perspective, what are the biggest obstacles to the lease model in the small wind environment?
The biggest obstacle I have come across is finding quality turbine manufacturers to work with. Currently, United Wind feels comfortable owning (and maintaining for 20 years) two turbines: the Bergey 10kW and the Endurance 50kW. The challenge is to find reputable manufacturers that have a proven track record, certified turbines and are willing to back their technology for 20 years. However I believe this challenge will be overcome as the industry grows and brings new investments in technology and manufacturing improvements.
Let’s back up a bit. Tell us how it is that you got involved in renewables in the first place.
My journey to renewables started over a decade ago and began in a completely unrelated field. When I first started out I was selling audio/video accessories and satellite TV equipment for the RV industry. One of my top products was an automatic tracking satellite dish for motor homes and boats that allowed people to watch their satellite TV programs anywhere in the country even while in motion. I started to realize that people wanted all of the comforts of their home while in their RV or boat. To be able to run this equipment, they would need a way to charge up their batteries. I started offering solar panels and small battery charging wind turbines as an alternative to running a gas generator, and customers loved it. From there I decided to focus on renewable energy and began selling larger grid tied systems and the rest, as they say, is history!
What inspired you to start United Wind?
When I co-founded United Wind, I had been distributing small wind turbines to dealers and installers all around the country for over 10 years. Over the last few years I saw more and more companies and manufacturers struggling financially and going out of business due to lack of sales volume. During that same period the solar industry began to boom with the advent of solar leasing. Thus, I began my search to find a way to bring that same type of financing to small wind. About 4 years ago I met Russell Tencer of Wind Analytics, who had a very strong background in finance and modeling of wind projects. Together we set out to create United Wind and WindLease.
Finally, what advice would you offer to people who are thinking about getting involved in the distributed wind energy world?
In my opinion there has never been a better time to get involved in distributed wind. We now have the ingredients necessary for success. Having a wind turbine installed has never been easier or more affordable, and we have DWEA, our strong industry association that has been fighting hard on both Federal and local policy issues to further expand our markets and opportunities. I would advise anybody who is interested in getting involved in distributed wind to contact DWEA for invaluable market insights and networking opportunities.