August 9, 2012
Solar Solution is the example of an innovation project, the realization of which requires a partnership and the success of which requires dynamic management, common goals and a coordinated way of working in the partnership. Read about the idea, the development phase, the streamlining of the project, the form of collaboration, the new ways of selling and the requirements for management.
By Lars Rasmussen
In June 2011, ceiling light manufacturer VELUX's innovation department Xlab and energy technology manufacturer Danfoss' Danish sales company joined hands on a two-year trial project for the commercialization of a joint energy and indoor climate solution.
Already after one year, the project has shown its justification and a relevant potential has been uncovered. In addition, the two partners have each gained new knowledge and insight into their own product portfolio.
But if you look back to the first thoughts and ideas, the "Solar Solution" concept has developed a lot as knowledge and insight have been uncovered in the realization of the solution.
The partnership between VELUX and Danfoss was not a coincidence. It was a deliberate result of the knowledge and insight VELUX built up during the first two years of the project up to June 2011. Without a partner like Danfoss, the concept would never have been realised.
Solar Solution is about offering end customers a turnkey stand-alone energy system that can supply homes with renewable energy (heat and electricity) and a good indoor climate. VELUX and Danfoss have developed the concept so that today it can be realized in a Solar prism, which can be placed on flat roofs, e.g. on cluster homes or multi-storey buildings or it can be integrated into the home's pitched roof and in the utility room. In both cases, the solution with skylights, heating, electricity and a good indoor climate contributes to the residents.
- The project has brought a lot of new knowledge to the two partners in a relatively short time, i.a. because the aim has been to make the project self-financing as soon as possible, says Jens Høgh Simonsen, VELUX.
– This is derived from the fact that there are two independent partners involved. In times of crisis, the management is always more friendly towards innovation projects that can rest on their own early on, he notes.
VELUX entered the project in 2009 following an inquiry from Albertslund Municipality. In collaboration with energy advisors from Cenergia and architects from the Martin Rubow design studio, the municipality applied for support for an EUDP project (EUDP stands for Energy Technology Development and Demonstration Project supported by the Danish Energy Agency). In the project, simple and cheap renewable energy and indoor climate solutions were to be developed for use in the renovation of the municipality's many non-profit housing. And VELUX was an obvious partner in terms of VELUX's great commitment and knowledge in indoor climate, as well as VELUX's interest in developing new solutions with the sun and daylight at the centre.
Knowing the potential of the existing housing stock, VELUX took up the challenge and agreed to oversee the development and construction of the first standard module for installation on a home in Albertslund.
VELUX supplied the surface – a window section, 2 thermal collectors and 2 PV solar panels (Photo Voltaic) – while the space under the inclined surface was used for the heat pump, hot water tank, heat exchanger and whatever else was needed to transform the solar energy into electricity and hot water in the House.
After a lot of development work to make energy technology work, the first 3 units were placed on the roof of the Hyldespjældet residential building in Albertslund on 29 November 2009.
The idea for the compact prism, which can accommodate everything on the roof, arose during the work on the solution for the Shyldespjældet. There is very little space in the apartments for the installation that a renewable energy system requires - i.a. water tank and heat pump. By gathering all the elements in the prism on the roof, it provided space in the apartments.
VELUX built the prism in Hørsholm in collaboration with other energy suppliers, and advisers etc. The primary USP of the solar prism was supposed to be simplicity and plug & play. Achieving these qualities created great complexity in the development phase and VELUX and other suppliers were challenged with the frustrations that arise when different systems have to be integrated into a simple finished solution. Expensive but necessary lessons.
In addition to the solar prism, the original solution for the home in Albertslund consisted of a house wind turbine and a modified geothermal heating system. But neither the wind turbine nor the geothermal system worked as intended and subsequently had to be replaced by additional solar panels.
- After two and a half years with the Albertslund project, experience has shown that well-insulated homes of 80-120 square meters can be supplied 100 percent of the Solar Solution prism with approx. 15 m2 PV, says Jens Høgh Simonsen.
In a new housing project near Aarhus that is equipped with the Solar prism, it is even calculated that the residents will get a smaller profit on electricity production, as the solar system produces more energy than what the house's heat pump needs to heat the home.
The project in Hyldespjældet was in many ways a great success and with a very satisfied resident. In autumn 2011, the municipality of Albertslund received the Nordic Council's award as "Best climate municipality in the Nordics in 2011", and the Solar prism undoubtedly contributed to this.
After the establishment of the first plant in Hyldespjældet, VELUX went in search of a partner for a commercial (test) launch of the concept. It had quickly become apparent that it was not appropriate to further develop the concept with the original partners. There were too many and they were too small. VELUX needed a strong partner in the energy-technology part and preferably with European sales.
VELUX has a large network and extensive experience in cooperation with carpenters and roofers and their wholesalers.
- The plumbing industry is fundamentally different, and VELUX has little to offer. So a strong Solar Solution required a partnership of 2 stronger suppliers: One for the roof surface and one for the technical room, says Jens Høgh Simonsen.
- We contacted Danfoss several times to get them on board as partners and as suppliers of an integrated solution, but we realized that the group's division into divisions was an obstacle. At the time, they were not used to delivering a complete solution with products from several divisions. But by placing the project in the Danish sales company, it succeeded, he says.
Conversely, anchoring the project at Danfoss has caused challenges in Solar Solutions' projects in the Netherlands.
During the negotiations, both parties agreed that a "gentleman's agreement" was the most appropriate framework for the collaboration. Despite a successful first impact in Albertslund, the concept and the project were fraught with so much uncertainty, especially regarding the purely commercial, that common will and understanding were more important than lengthy contracts dealing with a sea of unknowns. And as long as both parties found value in the project, there was no need for other incentives: VELUX's interest was to have light and indoor climate coupled with the current requirements for energy-saving insulation, including physical coupling of windows and solar panels. The interest for Danfoss was to develop and train itself to deliver an integrated solution that does not tempt the customer to look for competing products for parts of the plant.
"Together, the partnership had to prove that the concept also had a commercial justification. 2
Together, the partnership had to prove that the concept also had a commercial justification.
- At the beginning we thought that the prism itself would have a sales value for us at VELUX, but quite quickly we realized that it was mainly Danfoss' interest, and therefore we modulated the cooperation solution so that Danfoss is primarily responsible for the sales work towards the customers, says Jens High Simonsen.
- We also agreed that the prisms must not break the existing value chains, and therefore we calculate the earnings for each project based on what we each deliver. The products themselves are bought locally, and we leave the assembly to local craftsmen and contractors, he says.
Solar Solution has some common costs for e.g. brochures and films, and these are shared by the two partners.
The day-to-day management is managed by a project manager from each company, and they are responsible to a joint steering group.
- Precisely because of the many variables in the project, the project managers run the project according to the guidelines that we in the steering group have laid out. Therefore, the project managers can make quick decisions to achieve the goals, says Jens Høgh Simonsen, who is a VELUX member of the steering group.
- There are of course some challenges in connecting two company cultures together in one project, but the project manager from Danfoss has previously been employed at VELUX, so he is a good intermediary in understanding the cultures and values of the two companies, he says.
The project aimed to find solutions for energy and indoor climate renovation of existing homes, primarily private detached and terraced houses.
- In order to finance the project, however, we have had to cut the project short, explains Jes Høgh Simonsen.
- It turned out that the prism is not suitable for all houses. It weighs approx. two tonnes, and many houses, especially from the 60s and 70s, do not have the load-bearing capacity for it, and investing in support structures extends the ROI, he explains.
The focus is therefore initially on new construction instead of existing homes. In addition, the start-up costs in the project are best covered when these can be distributed over larger series, which is why housing companies and housing associations quickly became the target group.
The solution is aimed at homes with both flat and pitched roofs. But a large part of the magic lies in the prism itself on the flat roof, which is why the solution has made the biggest impression here.
The changed focus is of decisive importance for the organization of the sales work. It is important to get into the sketching phase of a new building, because once the architects have drawn the lines, it may be too late to say that everything for the electricity and heating supply can be placed on the roof. It is unknown country for both Danfoss and VELUX. Where we normally enter the projects when they are sent out for tender, it rarely takes more than 2-3 months from offer to delivery. Here, it can take 1-2 years from the idea being sold until the product has to be delivered, he explains.
- It is a challenge in itself to get in touch with the right people in housing associations, with investors, energy engineers and architects, but the long process time presents an additional challenge, says Jens Høgh Simonsen.
The Solar Solution project is being activated in many ways. In autumn 2012, the concept will be presented to GATE 21, an association of the municipalities in Greater Copenhagen. This is done in the hope of arousing the interest of municipal decision-makers, engineers, advisers and housing companies.
In addition to that, films, brochures and testimonials from professionals and end users have been made.
Renovation projects in the existing housing stock have not been abandoned. It's just a matter of starting with the lowest hanging fruit to ground the idea. The expectation is that Danfoss and VELUX will jump on to the other segments during 2014-15.
- We have development projects underway in several places in Denmark and the Netherlands, and we still have a lot to learn about the housing markets around Europe, because the large volume will make the project really interesting, explains Jens Høgh Simonsen.
- The Netherlands is interesting because there are many housing companies, and they have a long tradition of working with "plug & play" solutions, as Solar Solution also is. On the other hand, gas is more widespread. But this simply means that the provision of the solution in the Netherlands will not be quite like the provision in Denmark, he explains.
Solar Solution has challenged the managers of the project throughout the process, and there are still many challenges in terms of sales and technological solutions, but the goal-seeking approach to the project has provided learning for both Danfoss and VELUX, and much indicates a good, commercial success in the long term Lane.
Last updated 22 September 2022
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