Rodolfo Bitar | VP Business Development at PVH USA

Speaker A: Foreign.

Speaker B: Welcome to the Zenergy Podcast. I'm your host, Karan Takar. Today I'm joined by Rodolfo Batar, VP of Business Development at PVH usa. We dive into what it takes to build a solar factory in the US in 2025. From what drew him to solar, to how the industry has evolved, to why PVH chose to launch a factory here. Rodolfo walks us through the first steps of getting it off the ground, the cost and automation challenges, and how PVH is positioning itself to compete in the US market. We also talk about the impact the obbb, their partnerships with JP Morgan and pnc, and where Rodolfo sees us solar headed over the next decade. And now here's my conversation with Rodolfo Batar. Hello Rodolfo. Welcome um, to the Zenergy podcast. It is a true pleasure to have you on. Thank you for taking the time. I'm really looking forward to diving into your journey, your current work and to kick us off, I'd love to get a sense of what inspired you to ultimately work in solar.

Speaker A: Yeah, absolutely, and thank you for having me on. So I started my career back in, I think it was 2010, 2011, uh, up in Canada. I was uh, raised in Canada, I went to school in Canada and uh, at the time Canadian Solar had opened a big manufacturing facility for a program that's very similar to the domestic content we have here in the US and uh, I got a summer job there. I got offered a full time position after the summer and, and I took it and haven't looked back into uh, doing anything else but uh, renewables.

Speaker B: Very cool. Yeah, I mean that was the time when, and the sector was still relatively early in its journey, at least as I understand it. And over the past 14 years what we've seen is incredible growth largely driven by increasingly favorable economics. Uh, at the time when you started working in Canadian Solar, were you expecting for this growth to hit the levels that we have seen them hit?

Speaker A: It's been astounding. I mean back uh, when I started, I think I was 19 or 20, um, and just in what was the Ontario Fed market, I didn't have much of a global picture on to what it could be and what it has become. Um, especially when even in a small geography like Ontario, where we had uh, some political turmoil like we were experiencing now and other parts of it kind of have experienced, we seem to have a long Runway when, when I started out and it definitely has blown out of proportions into what it actually became and has become to what you could Foresee back then. Right. It's uh, the industry has come a long, long way from a technology, technology standpoint, uh, an understanding standpoint, the economics behind it, the reliability behind it, uh, it's, it's massive. Far beyond like I said, what, what I would have expected as a young 19, 20 year old, uh, starting an industry 100%.

Speaker B: I mean in some ways I feel like you probably started at such an opportune time for, for solar would like to peel, peel back the growth and the drivers slightly before diving into your current work. Because I think an understanding of how solar has evolved will help provide a strong foundation for some of what you're up to today. Um, so someone who has rode the solar wave for a lack of a better term, how do you view what the main reasons are for why solar has taken off at the current levels and what do you feel like are the, are like the main levers that have initiated this current scale?

Speaker A: Yeah, absolutely. I mean there's obviously a number of factors, um, and you know, I'll give you my perspective on them and know which uh, order. But being green energy uh, or green production uh, is a big factor. Uh, there's always the environmental impact, impact that we're having as an industry and what the entire world wants to move towards. There's also the cost of it, the decrease in capex to actually build and the efficiency that comes along with it as uh, technology improves. Then you have factors just like how fast you can put it up. Right. Uh, the flexibility to put it up a massive plant in under 12 or 16 months, uh, from a construction standpoint is huge. Um, and if you count, you know, the permitting and the development of those sites, you're still looking at putting up a massive facility or a massive production facility up in less than three years that not a lot of other technologies can do. Right. In a time where energy demand is so high, um, we depend on it uh, so much. Um, it's a very one safe way and quick way to get generation going. I think that has definitely helped the industry grow, um, beyond uh, the other factors that I mentioned.

Speaker B: Thank you for highlighting each of those factors. I do agree that those are the main drivers and each are extremely important in their own way. Um, now transitioning to your current role at pvh. Um, so as I was performing research for this conversation, I learned that PVH has had some pretty large investments that it's made. For example in opening up a new factory in Houston as well as um, it sort of has pivoted its strategic direction in the past couple of years given giving the company as I understand it, an advantage in the U.S. um, but would love to pass it over to you for you to give me and the audience a quick little overview about the company and um, some of these major investments and moves that it's been making these past couple of years.

Speaker A: Yeah, uh, absolutely. So pv, uh, hardware. We're a Spanish owned company based out of uh, Madrid, um, part of the Grand Solar Group. The company uh, a number of years ago decided to bring in all of its manufacturing in house. Uh so we manufacture I would say close to 85, 90% of the tracker, um, or the components of the tracker including the controller. The strategy was if we can bring all of this in house we have better cost control, uh, we can look ah, at raw materials, uh, closer, we uh, can control quality and it's going to be our own product. Right. Uh, so that strategy started with our first factory in Valencia, which is about 20 gigawatts of production. Uh then we replicated that ah, in Saudi Arabia, in Jeddah, which is a uh, 12 gigawatt factory. And then a number of years ago, three years ago now pretty much uh, the decision got taken to, to establish uh, one here in the US Uh PV hardware had been focused on a lot of geographies around the world, uh but not had the opportunity to set it same in the US market. Uh so about three years ago the company took the decision that to keep growing, uh, the U.S. market was essential and the research and uh, investment started to where to put the factory. Uh you know, are we going to replicate the same model or are we going to use third party agreements? Uh ultimately the decision got uh, got taken that we were going to replicate the model that has been working for the company over the last, over a decade now and uh, here we are. So we, we acquired a facility here in Houston, expanded it from uh, 50,000 square feet to uh, roughly 80,000 square feet. And right now we're, we're in the uh, even expanding even further with a second facility here in the Houston area.

Speaker B: And how have you seen client expectations and demand?

Speaker A: The expectations um, uh, that we have for the US Uh are there uh, even with all this political turmoil that we're encountering now, the next couple of years are still looking very, very busy. I wouldn't call it a slow start but uh, it's been a hurdle to come into the US as a new entrant, especially when the other leading manufacturers are us. The coming in as quote unquote a foreign entity. Uh, and Establishing presence obviously takes time. Right. Uh, it's a very mature market where uh, as I mentioned the other uh, tracker manufacturers have established their reputation and history here has been a hurdle to get through. But overall the market expectation is there. The market growth was there when we made the decision up to uh, a couple of months ago. Um, and like I mentioned the next 24 months are still looking to be very, very busy and um, in a pattern of growth.

Speaker B: That makes a lot of sense. Yeah. Can you, could you talk a little bit about firstly what the opportunities were when you initially made the, when your company made a decision to launch a factory here in the U.S. uh, was this, just trying to put it in, in uh, time context. Was this before the Inflation Reduction act was enacted?

Speaker A: Was it after the decision got taken a little bit prior to. Again since the model for PV hardware is to actually manufacture, we weren't going to enter the market uh, any other way. So yeah, the Inflation Reduction act definitely helped and pushed it over the edge in terms of making the investment uh, really, really look good. That said, as I mentioned, the strategy was always to implement something here. Um, and again even with all the turmoil that's going on, we still decided to expand our current operation. Um, so it wasn't solely reliant on the Iraq.

Speaker B: Got it, got it. And then what were some first steps with after the factory is up and running, what's the strategy? You connect to some large developers I assume, lock in projects. Could you just walk us through what that process looks like?

Speaker A: Yeah, absolutely. Um, as any new product, you know, we launched the manufacturing facility, we launched our training center here as well, um, started reaching out to clients and um, first off with the APCs, bringing them uh, through the factory, seeing what we had to offer, uh, getting them familiarized with our products. Some folks had experience with PV hardware. Um, the launch of this facility was at the same time that we relaunched a new product. So teaching the industry what we were up to now and what our new product had to offer. Um, and from there obviously leaning on the ipps and developers to uh, see what we had to offer for their long term uh, management of the asset. Right. The fact that we preassemble our components, that we offer a very competitive if not faster installation, uh, rates uh, to the owner, um, and providing uh, how to protect their assets against hail with all the technology and uh, stowing procedures um, that we have and so on and so forth. So it's uh, like I mentioned, it's been an opportunity to teach the market here what pbh can do. And uh, I think we've had good success on doing so so far.

Speaker B: Two questions I often get asked a lot, um, as it pertains to manufacturing different components within solar, um, the first has to do with U.S. competitiveness and I think is a really interesting, interesting decision, um, that you all opened up a factory here in the US three years ago and I feel as if there is like objectively a big push to try and bring more manufacturing in the U.S. however, some argue that there are a lot of cost constraints in, in, in the US market. So I'd love to get a sense of whether that is actually the reality, whether building here is naturally more expensive than for example in your other two factories, Spain and uh, I think you said Saudi and then part B. The question is how does AI tie into some of your current operational capacity?

Speaker A: For sure. Um, so I guess the first one in regards to const, um, yeah, I mean naturally the raw materials, the labor, the land, taxes, everything's a little bit more expensive here in the US but uh, it didn't prevent us from offering uh, a competitive solution. The upside to being the manufacturer and having everything in house, uh, is it lets you optimize and find efficiencies, uh, as you go along. Right. So yeah, even though there might be some cost adders, our business model allows for us to find those efficiencies to um, zero out those cost adders or even find uh, some benefit. Um, you know, to your point in regards on how costing compares to manufacturing here or manufacturing, uh, in one of our other plants, yeah, it's cheaper to manufacture in the other plants in a perfect piece or part basis. But then you got to take into account the logistics fact, the fact that I, I don't have any tariff risk with most of my components, uh, because they're made here in the U.S. uh, so there's definitely factors that play in, in hand to it over the last six months with, with all the tariff wars that have been going on, obviously that fluctuates and um, they could go all, all the way to zero and maybe it makes more sense. Right. Um, but uh, to bring material in or they keep getting higher and it makes more or more of a case to really keep us manufacturing going. To answer your initial question, we made the choice knowing what our manufacturing capacity is, our manufacturing cost was going to be and it came out to be a competitive product, uh, and price point for what the market is expecting.

Speaker B: Have you seen a lot of evolution in the technology you're applying at the manufacturing level? Over the past couple of years for sure.

Speaker A: I mean we try to automate uh, as much as we can. Right. Just like the next guy. Um, you know from having physical uh, welders to using robot welders uh for certain components to you know the, the presses uh, that we use and uh, their, their capabilities to just be able to change the die and press a different part um, as we, as we service, you know the, the previous die that we used, uh, the torque tube machine. So there has been a lot of evolution in technology and in manufacturing. I don't think it's as advanced as you uh, would expect in other industries but uh, there has been some, some leaps in how we manufacture and our process. Right?

Speaker B: Yeah, Yeah. I uh, had the opportunity to tour BMW's factory in Munich uh last year and I was amazed by the amount of automation that they had integrated into their manufacturing process. So I'm m especially curious to see how the solar manufacturing process stacks up on the automation piece of things. And it seems like there is a good amount of automation but there is still some ways to go. Is that a uh, fair way to detect?

Speaker A: Yeah, absolutely, I mean, I guess. And it also depends in what you're manufacturing, right? I mean um, when you look at some of the world leading solar panel or uh, solar module manufacturers, their assembly is virtually uh, fully automated. From soldering the cells together to placing them uh, and it's a, is wonderful to see. I don't know much about inverter manufacturer but uh, I'm sure that uh, those guys are including very cool technology uh into their product too. So definitely, definitely the industry is moving forward to try to make it more efficient and uh, automate as much as possible.

Speaker B: Can you talk a little bit about uh, solar farms that don't use trackers, compare from an efficiency standpoint to those that actually do use trackers. I know there's a lot of variation according to geography and angular placement, things like that but um, I'm just personally curious as a developer or from a developer lens, what incentive do they have to integrate trackers into their uh, portfolio versus Not?

Speaker A: Yeah, uh, absolutely. I mean you just hit the nail on the head there with uh, uh, how to take the decision. Does the decision if you, you go fix tilt or tracker? We offer both so we can, we can help our, our clients with that decision. As you mentioned, it's going to have to do with land constraint, uh, geography, whether you're in, in you know, up in Alberta, uh, at uh, minus 40 with high winds and you're going to be stowed all the time versus having a fixed tilt and you're just producing and don't have to worry about operations and maintenance. Right. Um, there's obviously a lot to gain from a tracker. I'm going to use Texas as an example. We have a lot of land. Uh it's fairly flat and with all the technology that's been implemented by everybody out there with the diffuse and backtracking uh optimizing the day and in production um it's obviously going to give you more than a fixed tilt system. I would say from um, complete comparison on a flat site tracker obviously is going to produce more but the complexity comes into uh, when you get into parcel off sites uh very odd shaped uh, very undular that you start looking at other options whether it is uh, uh two two P tracker or going fixed just because you can fit more. Right.

Speaker B: It's helpful context. So essentially the developer's decision is whether the cost per tracker is more optimized than the amount they'll be able to generate by integrating trackers can like multiplied by whatever utility price to to figure out whether the revenue potential exceeds the cost. Am I missing any key criteria there?

Speaker A: No, I think you got it there. It's a matter of uh evaluating your capex costs with one technology or the other uh to what your ending generation uh that you could possibly achieve with one technology and the other and comparing it to your hurdle rates and what you need. As I mentioned PBH has an offering for both tracker systems and fixed tilt. Um and we've gotten a number of requests for fixed tilt more and more especially as um the square flat land runs out. Right. Um and you get into a little bit more complicated topographies and placement. Um but uh, it's essentially a business case uh on a site side by

Speaker B: side basis are there any size constraints for whether it makes sense to integrate a non fixed tilt tracker?

Speaker A: No, no, no. I mean we, we've sold uh five 500 kilowatt trackers uh uh all the way to you know two or three gigawatts in Saudi. So there really isn't a uh size constraint. It's uh, at the end of the day is how much you're producing and how much uh you're gaining with that production. Right. To offset the cost. So there's no real size constraint in terms of uh, is better suited for a smaller project or a bigger project.

Speaker B: For some reason I had the perspective that only very major developers would be customers um because the trackers might add capital costs and as A result, only at certain thresholds does it make sense to integrate non fixed tilt trackers. But it's great to hear that even smaller projects, 500 kilowatts, um, integrate the non fixed tilt trackers out, transitioning slightly. So of course what everyone's talking about these days is what's happened recently with the big beautiful bill and now there's an EO out that's created a lot of uncertainty and in the space. And I'd like to preface, preface this by saying no one really knows what is happening and things are changing day by day. Um, I've personally been on like too many webinars to count over the past couple weeks and almost the consensus is we just gotta wait and see. Um, given that, would love to just get a sense of someone who works on the ground, talks to developers, et cetera. Like, what are, what are you hearing unfold in this moment? Are you seeing developers making moves to secure trackers in this window? We're reporting this July 17th? Um, or are they mostly holding off, waiting for the EO to, to uh, see whether treasury ultimately changes guidance and then make a decision? Could you just provide a little bit of insight into what you're seeing take place here?

Speaker A: Yeah, for sure. Um, uh, as you mentioned earlier, nobody knows what's going on. Right. It's a time of really high uncertainty. The executive order coming out, uh, the legislation, the rules still being established, real time, and they seem to change, um, daily, if not hourly. It's very, very, very, very, uh, I hate to repeat myself, but uncertain, uh, at the moment in regards to what owners are doing. We're having all types of conversations, uh, from safe harboring to what our outlook is, uh, in the next couple of years. I think there was a press release quoting me actually, uh, about the fact that we've bought quite a bit of raw materials to, uh, help clients if that's uh, a route they want to take with the safe harbor in the next couple of weeks. At this point in time, people are just being careful, having the conversations, uh, getting ready to pull the trigger, uh, but getting comfortable with what the current scenario is and the uncertainty that comes along with it. It's obviously very clear that the administration is doing everything to create obstacles for the industry and they seem to throw a new obstacle out, like I mentioned, weekly or daily. And it's going to be hard to really get a perspective and an understanding on everything until the dust settles and all the factors are out on the table, uh, whether it's within those 45 days that uh, the executive order mandates or a little bit beyond. Uh, until that happens and uh, until the guidance on what construction start means, uh, who's eligible for credits and the safe harboring, the fiat stuff, the industry is not going to be able to sit down and see what the next course of action is. I think that the industry can agree that we've been very resilient as an industry for a lot of years. Um, uh, a lot of administration changes, not just in the U.S. but globally. Um, so, um, it's uncertain, but what is certain is that we're still going to be around one way or another. Uh, we all hope and we're just going to have to wait at this point. But the general conversations I think, uh, to mirror what you said at the beginning of this is uh, yeah, we've all been on a lot of webinars over the last couple of weeks. Assumed, uh, charge, uh, for each webinar that they're putting on, they'd be making a lot of money. Yeah, we're all asking questions and the what ifs at this point. Um, I think everybody in industry is talking to each other, um, seeing what the best case scenario is as well as what the worst case scenario is for, for what's to come.

Speaker B: Yeah, I really hope Zoom doesn't take a page out of the Trump administration's playbook. And it was a digital tariff, otherwise be very expensive. These webinars would really add up. Um, thank you for expanding on that one quick clarification question. So you mentioned that you all bought material to Safe Harbor. Could you expand on what exactly that means?

Speaker A: Yeah, for sure. So, um, we, you know, everything we've done here in, in our U.S. manufacturing is with U.S. steel, uh, from the get go. Um, and obviously if a high demand of requests come, come in regarding uh, Safe harbor equipment, we'd have to do what it takes to manufacture and follow procedure to Safe harbor that equipment, uh, and provide uh, that capex spent to our EPC or developer. So what we've done is just, we've worked with our mail partners and sourced more material, more raw materials. So we have ah, large stock of um, the coils. We took on um, more than we planned to essentially in our purchasing, um, forecast to make sure we were ready for an influx.

Speaker B: Are you seeing sort of an influx again?

Speaker A: We, we've started to uh, have a lot of conversations. Uh, again it's, it's uh, a matter of, it's ongoing.

Speaker B: Yeah, makes sense. Makes sense.

Speaker A: We've been asked several times. We've gone through uh, different strategies depending on what the client's looking for. Um, so the conversations are very live. Um, and uh, it seems that yeah, we will have uh, a very large influx in the next couple of months.

Speaker B: Oh, it's going to be a busy couple months I feel like for everybody in the solar industry. And as I was conducting research, I was very intrigued by the partnership with JP Morgan and PNC that PVH has established over the past couple of years. Could you walk us through how that came about and how uh, that relationship has translated into growth for PVH here in the US Market?

Speaker A: Yeah, absolutely. So I mean PV hardware being a global company. Right. Um, it's not a matter of just the U.S. u.S. Uh, both, both banks have presence uh, elsewhere. So their relationship coming uh, to the US and establishing a relationship here domestically, uh, has definitely helped. Uh, it gives our potential, uh, clients and clients a lot of security on the fact that you know, if we need a uh, line of credit or to, to post a bond or whatever it is that we have that uh, that backing, uh, and it's not necessarily coming from out of country. The fact that they've helped us uh, here in the US with different matters, uh, as well as provided us uh, those financials uh, really, really does help uh, provide that sense of security and financial strength. Right.

Speaker B: Looking ahead five to 10 years, what role do you see PVH playing in the future of American solar? And what excites you most about where the industry is heading?

Speaker A: You don't make an investment like we did to just go up one year and then close down the next. Uh, we're really bullish that uh, the industry here is going to kick uh, back up at some point. As I mentioned, we're still a global company and if we need to produce for other countries from here, we're happy to do so and we're happy to keep that manufacturing here in the US the next five to ten years in the American solar industry. Um, I hope that with the energy demand going on and with everything uh, that's coming online for data centers and other energy consumption, uh, areas, um, that the industry continues to grow. Perhaps it won't be in the same manner that it is today. The models look a little bit different, uh, but the hope is that the players looking for um, generation still look at the positive of solar and bass and wind, uh, and other green energy fuels. Right. In terms of what excites me most on what's coming up, uh, is in the short term, to be quite honest, Karen, uh, I'm excited to see where all the ships fall and how we can, uh, plan and strategize and, uh, look for a way to keep growing and move forward. If we're anything, we're creative. Uh, so, um, I'm sure that great minds in this industry are thinking of ways on how to keep moving the sector forward, and I'm looking forward to

Speaker B: finding out what those ways are creative and resilient. Love it. Thank you so much, Rodolfo, for taking the time. It was a pleasure speaking with you. Really appreciate this conversation. And, uh, best of luck these next couple of weeks and months. Make sure to, uh, preserve some of that energy. I know you're going to be working hard, but don't, um, work too hard.

Speaker A: Appreciate it, Karen. It was a pleasure speaking with you and, uh, we'll be in touch soon.

Speaker B: Thanks so much for checking out the Zenergy podcast. If you enjoyed today's episode, please take a moment to rate and subscribe to the podcast. It would mean so much to me and the rest of the team. We release episodes every Thursday, so stay tuned for all new episodes featuring industry leaders building a cleaner, greener future for us all. See you next time,

Speaker A: Sam.