Episode 10: Mentorship + opportunity = How we keep advanced energy startups in Tennessee

The Tennessee Advanced Energy Business Council has four commitments to our members. In this episode, we’re focusing on one: Foster the growth of Tennessee's advanced energy startups. TAEBC doesn’t just want advanced energy startups to launch in the state, we want them to grow, thrive and stay here.

Today, we’re speaking with Harvey Abouelata, Vice President of Commercial Solar at Solar Alliance, and Dr. Bianca Bailey, CEO of Agriwater. In the episode, host Cortney Piper talks with Abouelata and Dr. Bailey about the importance of mentorship, programs that support early-stage companies, and how solar power and wastewater treatment systems go together like peanut butter and jelly – more on that analogy in our episode. And listen all the way to the end of the episode to hear a special clip of Dr. Bailey playing the saxophone.

Solar Alliance is a TAEBC member. Abouelata is an Entrepreneur-in-Residence in TAEBC’s Energy Mentor Network program, run in partnership with Launch Tennessee. Agriwater is in Cohort Six of the Innovation Crossroads program at Oak Ridge National Laboratory, a two-year program for fellows focusing on energy and advanced manufacturing technologies.

Learn more about TAEBC, Solar Alliance and Agriwater. 

Transcript

Cortney Piper: Welcome to Energizing Tennessee, powered by the Tennessee Advanced Energy Business Council and FirstBank. We're your number-one podcast from news about Tennessee's advanced energy sector. I'm your host, Cortney Piper.

The Tennessee Advanced Energy Business Council has four commitments to our members, and the one we're focusing on today is fostering the growth of Tennessee's advanced energy Startups. We're speaking with Harvey Abouelata, Vice President of Commercial Solar at Solar Alliance, and Dr. Bianca Bailey, CEO of Agriwater.

About the importance of mentorships and programs that support early-stage technologies and companies. We don't just wanna launch advanced energy startups in Tennessee. We want them to grow, thrive, and stay here. But before we speak with today's guest, I want to give some updates about our TAEBC annual meeting in Nashville on March 7th.

This annual event allows TAEBC members, stakeholders, potential members, and anyone curious about advanced energy to gather from across the state to celebrate our growing advanced energy economy. The agenda features, panels about Chattanooga becoming a smart city and why businesses choose Tennessee. Our speakers will also provide updates about the Tennessee Valley Authorities' integrated resource planning and Rivian Solar Project in West Tennessee.

You won't wanna miss this. The event is free for members and public officials. If you want to learn more or register to attend, please visit our website at tnadvancedenergy.com and to stay up to date about the latest event developments, follow us on social media or sign up for our newsletter. 

Now a word from our sponsor.

As many of you know, FirstBank is a valuable partner in helping TAEBC launch the Energizing Tennessee Podcast. For today's episode, we've invited Brent Ball, FirstBank market president for Knoxville, Tennessee onto the show. Brent, happy to speak with you today. 

Brent Ball: Thank you, Cortney. Happy to be here.

Cortney Piper: What are some specific financial challenges many startups face? 

Brent Ball: You know, really I think it starts with, you know, just explaining the entrepreneur's vision and the company's purpose. You know, to be an advocate for a client, you know, the bank and the banking advisor have to understand the industry and the business.

And of course, that can be very difficult for startups. You know, it may be a newer industry or it may be something that's just, you know, extremely complicated that most bankers don't know. So you've gotta be able to, in your business plan, or when you're meeting with the financial institution, be able to clearly explain your vision and the industry. 

You know second is something that we deal with a lot right now is cybersecurity. You know, there's a huge, a ton of stuff out there right now, fraud and things that we have to worry about. And of course, for a startup, you know, this is a huge threat and can be detrimental.

So, you know, I would, I guess advise anyone that when you set up your accounts, make sure you have the proper fraud prevention attached to them and banks are able to offer many services there. There's usually a small cost, but I always tell people it's really about it like paying a small insurance premium. And we see this every single day right now. 

And then the third, of course, is just, you know, we're in a rising rate environment. Lines of credit for businesses. The interest rates have doubled or even tripled in the last year. So, you know, that's just something that you need to, when you're putting a business plan together, you know that that initial interest cost has probably increased quite a bit and you know, make sure when you're talking with this institution, you understand how the rate is determined. If it is a variable rate, on what index is it tied to. And that's something to really monitor. And, you know, most people say rates will continue to rise over the next six months to a year.

Excellent points and excellent pieces of advice. So, how can financial institutions support startups in Tennessee? Well, you know, it's really just Having the want to get out and meet with entrepreneurs and learn more about these businesses. It's more difficult for a bank to do that than just, you know, go do a real estate loan somewhere. Right? 

There's a lot more that goes into it. So the bank's culture has to be one that is willing to get out there and take the time to understand and do something that's somewhat out of the box. I heard a story a couple of years ago and somebody told me, they said, you know, banks, that they'll give you an umbrella, but then when it's raining, they'll want to take it away. And we don't want to be that type of bank here. 

You know, we want to be the bank that has the advisors that want to go out, meet with clients, understand their business, and be with them as they grow. You know, from a startup into a super successful company.

Cortney Piper: Brent Ball, first bank market President for Knoxville, thanks for joining us on energizing Tennessee. 

Brent Ball: Thank you.

Cortney Piper: Today on Energizing Tennessee, we're speaking with Dr. Bianca Bailey, CEO of Agriwater, and Harvey Abouelata, Vice President of Commercial Solar at Solar Alliance. We're talking about energy startups, entrepreneurship, mentorship, and how solar power and wastewater treatment systems go together like peanut butter and jelly.

We'll have to ask our guests a little bit more about this particular analogy in a moment, but Dr. Bailey and Harvey, welcome to the podcast. 

Bianca Bailey: Thank you. 

Harvey Abouelata: Thank you. 

Cortney Piper: Dr. Bailey, tell our listeners what is Agriwater and what problems are you solving? 

Bianca Bailey: Agriwater is an early-stage technology company. We actually are building a water treatment system that would be modular and be housed onsite of a farm. So that technology would be able to take in the animal wastewater from a lagoon and treat the water and the livestock farmer would be able to reuse that water onsite. Either for crop irrigation or other uses such as flushing down the barn floors, for example, the dairy cows.

So yeah, that's what Agriwater does. And currently, right now we are in the Department of Energy's Innovation Crossroads program. And that's partnered with Oak Ridge National Lab here in Tennessee. So I've actually been working with our Oak Ridge collaborator on developing the technology and trying to commercialize it.

Cortney Piper: Now, Dr. Bailey, this might seem like a silly question, but is treating wastewater at these large confined animal feeding operations? Is it a problem? 

Bianca Bailey: Yes, it's a big problem actually. In the United States of America, we produce about 500 million tons of animal manure in the US and that's over 1000 times the weight of the Empire State Building in New York City.

So you can imagine sometimes this wastewater ends up in our rivers. And that can pollute some of our aquatic life and also limits some of our recreational activities. So managing animal waste is a big problem. Overall, I think it's an environmental issue as well, Cortney. 

Cortney Piper: All right. Well, thank you.

Harvey, Solar Alliance has been a TAEBC member for a while now. And Harvey, you were actually involved in the first iterations of this organization too. And you also have been in the news a lot lately for some of your recent projects, including there was a one-megawatt solar project for the Knoxville Utilities Board and a solar project for Faith Lutheran Church in Oak Ridge. 

So tell our listeners who might not be familiar with you and Solar Alliance, just a little bit more about Solar Alliance and your approach to solar energy. 

Harvey Abouelata: Our approach is all about dollars and cents. You know, one of our oldest customers, as you know, is Wobblers Farm Sausage - and what Teddy will tell you is, I don't sell solar, I sell money. And so I kind of like that description. I'll wear it, I'll own it. But essentially what we do is try to find. The most innovative ways of making solar affordable. So unique to this year, and again, policies change, right? So we have to change with policies.

So we're constantly evolving how we do things. You know, for the longest time we worked with USDA and REAP grants which we're at 25% now they're up to 40%. So we've got a resurgence of agricultural type based businesses. And it doesn't have to be agricultural-based, it just needs to be in a rural area and for profit. 

Well, in this particular case, which is interesting is the first time in our history, in our career, Cortney, is that there have been incentives for nonprofits. So you can go from a community solar, like KUB megawatt project, and that gets a 30% direct pay.

So they get 30% back to help fund their solar system. And it can go as small as a Lutheran church. And these are all markets that have never been tapped before. They've never been touched. So any nonprofit, whether it be an animal shelter or a church or a boys and Girls Club - all are eligible for solar.

And so for the direct pay incentive, which is 30%, which makes, again, the payback very quickly. So again, being a cost accountant, kind of a nerd about just really digging into the numbers and making some sense out of 'em. You know, solar can be done by producing energy that you use, but it also can be an accounting play.

For instance, you can do peak shaving and do demand charges, and so that's another function of Electricity that can be monetized. And so you can look at a manufacturer, for instance, and if you said that, Hey, my downtime costs me a hundred thousand dollars an hour, guess what? You can figure that out over the last 10 years, how much downtime do you have? And then we can monetize that. So we have to look at a lot of different things. You know, our process, and I won't drag this out, I promise you, is evaluate, reduce, and produce. So that evaluation process is Data monitoring. We want to build an energy profile, we wanna understand how you use energy.

And then the reduction side, of course, if you can reduce the energy you need, then the capital investment to produce energy becomes less. So that's kind of our approach to everything, the simplified approach to solar.

Cortney Piper: And Harvey, for our listeners who are not familiar with the USDA REAP Grant program, which is a fantastic program, give us the 30-second elevator pitch for this program. What is it? Who can use it? What are the benefits? 

Harvey Abouelata: Okay, well, it's a 40% grant. So you're receiving a check. It's not a tax credit, it's not a deduction, it's a full grant. You have to be in a rural area. So population in general, under 50,000 your business has to be for profit.

 You have to have been in business for three years or more. Or provide a business plan. The other thing about the U SDA grant is you have to show control over the site. So in other words, my building, if I lease, I have to show a lease for the life of the project, which in U SDA terms, they think of the life of a project as 15 years.

What you'll be surprised at, or what I am surprised at is some of the areas that are U SDA eligible. For instance, we're doing a solar system we're doing a grant application for the Social Security Building in Oak Ridge, Tennessee. I wouldn't think of Oak Ridge, Tennessee as a USDA-eligible rural area. It is. 

And so there's a private investor that owns the building, leases it back to the federal government, but that rooftop is in a U SDA eligible area. Which was very surprising to me. Also, a lot of people think of U SDA as AG-based, and I made that mistake earlier in saying AG-based business, it's not, it's small businesses in a rural area.

Cortney Piper: And it can be used for solar energy efficiency upgrades too?

Harvey Abouelata: Correct. And so the cap on solar or energy production, whether it be, you know, gasification or biomass or whatever, the cap is 500,000. And on energy efficiency projects, the cap is 250,000. 

Cortney Piper: All right, great. Now, this episode is all about how we can best support our energy startups in Tennessee. Dr. Bailey, you are part of cohort six of Innovation Crossroads at Oak Ridge National Lab, and this is a two-year program for entrepreneurs focusing on energy and advanced manufacturing technology.

So, Dr. Bailey, how is this program helping you and the development of your technology? 

Bianca Bailey: Yes I think in a lot of ways the program introduces us to the ecosystem that's here in Knoxville, for example, you know, even how I met Harvey, it was through an event at the University of Tennessee's campus.

And we were pitching for Spark, the Spark Accelerator demo day. And I happened to meet Ann and then she introduced me to Harvey. So I think, you know, getting us out to the public. You know, we got to speak to the Knoxville Chamber of Commerce. I think you were the mc for that event, if I recall.

Cortney Piper: I was.

Bianca Bailey: And then we did a lot of networking there. But besides the ecosystem, it provides mentorship and technical advisement through having a collaborator at Oak Ridge National Lab. Providing lab space and also funding for entrepreneurs to be able to work on this full-time and not have to, you know, have two jobs just to run the startup.

Cortney Piper: Okay. And Dr. Bailey, we had you give us a 30-second pitch about Agriwater, but is there anything else that you want to tell us more specifically about your technology and what you'll be doing with it over the next two years in the Innovation Crossroads program? 

Bianca Bailey: Yes. The technology currently right now, it uses a process called electrolysis, and we're basically applying a current to the wastewater, and that allows us to be able to precipitate our contaminants. And this is an advancement in the livestock industry because now you can treat wastewater on site without having to buy extra chemicals to add to the process.

We also want to be able to use and add solar to the technology because you know, in areas where the sun is very abundant, this technology would work very well and sort of be something that is a decentralized electricity and clean water generator. 

Cortney Piper: Excellent. Okay, now part of TAEBC's mission and our work is to foster the growth of Tennessee's advanced energy startups.

One of the ways that we do this is, through our Energy Network program that we run in partnership with Launch Tennessee and Harvey, not only is Solar Alliance a TA EBC member, but you have been an entrepreneur in residence in our mentorship program. You actually served as an entrepreneur in residence for the first startup that went through this program who's had gone on to have tremendous success. And you've mentored a number of startups in the program since. 

So, first Harvey, from your perspective, why is it important to you to support early-stage advanced energy startups? 

Harvey Abouelata: There are so many good ideas out there, Cortney, that are just genius, that just don't get a chance because you know somebody didn't know, you know, the right person to call the right move to do the right way to present something or whatever.

So The idea dies, not cause it's not a brilliant idea, but it dies because it never got to see the day of light. And so, you know, for me I mean, Agriwater, when Anne came to me and told me about her, I'm just jumping in. I don't care. I mean, she, I, it, to me it was, it was like a dream business, you know?

You know, not just the fact that solar is distributed power. She's bringing technology to the ability to clean water in very specific areas and distributed areas. And so the combination of focus on agriculture. So we've got food, fuel, and water. I mean, that's the peanut butter and jelly thing of it.

It just always is constantly coming back and it goes together. Everything about. What Dr. Bailey's doing, what we're doing with solar and to the point of like our next iteration, I think you're familiar with our Powershed, which we developed with UT. in fact, that just got submitted for our defending our patent today, actually. 

Cortney Piper: And tell people quickly what Powershed is. 

Harvey Abouelata: So Powershed is basically a 300-pound AC outlet that we can put anywhere. And so you can power a robotic mower, for instance, in the middle of a highway, right where the power's not accessible or it's very expensive to get. We can put Powershed out in the middle of the median of a highway, you could put a robotic mower route there. It's not, you know, a robotic mower gets run over by a car. Not so bad, you know, but a person gets hit by a car pretty bad, right? So and plus you're paying somebody to drive a tractor all the way out there doing nothing to get there to mow.

And so you're wasting a lot of fuel, you're wasting a lot of energy, you're wasting a lot of time by doing that. So power shed allows you to have power in places where you wouldn't normally have power. So the next iteration of Powershed is gonna be an increased inverter size to do what?

To pump water. And this was before we met Dr. Bailey. We were already planning to do this. So you know, the idea of, oh, here's electrolysis, its main component to clean water is electricity. It just, everything just kept coming together. So it's pretty exciting. And if you know, and I'm, again, I will try to keep this very short, but from an economic development side, And bringing jobs here by having innovative companies that are startups here and creating businesses and creating a tax base, it just brings more attention.

And I think that with our water assets, a river going downtown, we've got TVA dams, we've got world-class kayaking. We've got rowing and Oak Ridge. We've got some of the best bass fishing tournaments in the world. We've got the best trout fishing, fly fishing. People come from all over the world to enjoy our water.

And so what we need to do is understand how to clean it responsibly, how to use it responsibly, and by having people like Dr. Bailey developing that right here. Under the arms of ORNL in this great community. It's just exciting, right? There's no better place to launch this company than right here in Knoxville.

So whatever I have to do to help her to do that is what I'm going to do, because, It is so critical to our economy. It's so critical to our life in general, just the world population. It's just a relevant topic. How can you talk about anything else but water when this is sitting right in your backyard, and I mean, you are a swimmer, you enjoy water. You know how important it is. So from every aspect, there is, water's critical to our playtime, to our nutrition, to our work, everything. So it's tenfold, and if I can throw a little solar in there, I'm happy. 

Cortney Piper: Harvey, your passion and enthusiasm for mentoring entrepreneurs for energy and innovation is infectious, and I think it's one of the reasons why we are able to keep and attract so many innovators like Dr. Bailey to the state of Tennessee. 

Is there anything else that you want our listeners to know about how we can keep advanced energy startups in Tennessee besides putting you on a circuit and getting you involved and mentoring these folks? 

Harvey Abouelata: Well, thank you. I think we have the right infrastructure and obviously, Cortney, with everything that you're doing, you bring so many people together. You know, that's part of the beauty of being here in East Tennessee is that we do have your passion is the same about educating and communicating with everybody and bringing unlikely actors together. 

Cortney Piper: Dr. Bailey and Harvey, you guys have alluded to this a little bit, but how you all met Dr. Bailey, you were doing an introductory pitch to the community at the Spark CleanTech Accelerator Demo Day, which is an accelerator program that the Tennessee Advanced Energy Business Council supports.

Harvey, Solar Alliance being a key member, you had one of your team members in the audience, and I remember when I heard Dr. Bailey pitch, I went oh my gosh. She needs to meet Harvey. And I went over and I remember I saw Anne, who's Harvey's team member, with Solar Alliance that was there and I said, Anne, and she just gave me this look and said, I know.

And I remember at that time I went over to Gary Rawlings, who is the entrepreneur and residence for all the Innovation Crossroads cohorts and Dan Miller who oversees that program at Oak Ridge National Lab. And I said, okay. Dr. Bailey, we need to get her together with Harvey because he can give her exposure to a lot of her target audience, and it would just be phenomenal.

So I personally love seeing those connections made, and I love how this has really blossomed beyond any of my wildest expectations after that event. 

Now, I wanna get into this peanut butter and jelly analogy. So, you all have mentioned that solar and Agriwaters technology are going together like peanut butter and jelly. What do you all mean by this?

Harvey Abouelata: The most obvious part of it is electrolysis obviously, requires electricity to clean the water and get the process started. So from a very technical, mechanical standpoint, that makes sense. Just all the other connections as you know, Cortney we have a world-class zoo here. The elephant pool is a dump and fill pool. It's 65,000 gallons, so they're literally paying for water to come in and they're paying again for it to go out. You're flushing money down the toilet and so you take a project like that and I've always been interested in trying to do this elephant pool and clean it up and keep that water in there, right? So that's the velocity of money. We're keeping it within the cycle, and we're not letting any economic leaks by keeping it in that pool. So her technology, along with solar keeps all of that in there. And so what you're doing is not only cleaning water, you are using clean energy to clean water.

And so, I mean, it just keeps going up. Solar right now is the lowest cost provider of electricity, and so you're doing it, even more, cost-effectively. So there are so many synergies between these two technologies coming together in this, specifically in this community, and that's where all these connections. And peanut butter and jelly is just a comfort food for me and it just goes well. And this is just comforting to me everything about it. 

Cortney Piper: Okay. Dr. Bailey, how would you describe this peanut butter and jelly analogy and how solar energy can integrate or support Agriwaters technology? 

Bianca Bailey: I think Harvey did a great job of explaining that. I just wanna add you know, peanut butter and jelly, solar, you know, clean water electrolysis, you know, separately, they really have nutrition, right? They really can impact and improve people's lives, but together, when you put peanut butter and jelly together, it tastes much better. So it's a whole new thing. I think it's much more satisfying, but I say together means that you know, we can do a lot more if we're unified within the technology and the technology has an interdisciplinary, intentional focus when we're designing it. And specifically, I think the importance of rural areas, they're already decentralized when it comes to their septic systems, and adding something that can be a decentralized water treatment system that also produces its own electricity, I think is a big game changer when it comes to providing electricity and clean water for rural areas in the United States. 

Cortney Piper: Excellent points. Okay, before we wrap up, Dr. Bailey and Harvey, tell our listeners about what you have going on and where people can learn more about Agriwater and Solar Alliance. So, Dr. Bailey, why don't you go first? 

Bianca Bailey: Okay. So, currently, right now Agriwater we're looking for interns for the 2023 summer to help us run experiments and improve our technology.

We also are fundraising right now, so if there's anyone that might be interested in learning more about Agriwater, you can check us out at www.agriwater.tech and send me an email. I'd be happy to talk to you about animal waste. And also just a side note, I play the saxophone, so March 31st at 8:00 PM, I'll be playing at jazz night at the Lowercase book store in Knoxville.

Cortney Piper: All right, so we can meet you in person. 

Bianca Bailey: Yeah, you can meet me in person, talk music and clean water. 

Cortney Piper: I love it. And Harvey, how about Solar Alliance? Where can we learn more? 

Harvey Abouelata: Solaralliance.com is a great place to start and get on our email list. You mentioned Anne several times. Anne does a great email more or less blog posts that are very educational. I don't think they're pitchy at all. If you ever see one that you think is pitchy, please tell me and we will correct that. But everything that we put out there is meant for you to be able to improve your business with or without us. But what we want to do is see that businesses thrive in our area, especially, we're mostly focused in Tennessee and oddly enough, Illinois and Kentucky, but you know, our reach is, is much further. We've done projects in California, we've done projects in Florida with Power Shed, we're all over the place. And you know, one of our larger projects was for Bridgestone in South Carolina. And a lot of that is because of you, Cortney.

Cortney Piper: Well, thank you very much, Harvey. We like to make sure we can connect assets with opportunity and connect and network the advanced energy sector across the state of Tennessee, into the southeast and all across the country. So thank you all very much. 

Now, Dr. Bailey, our listeners are going to get a special treat today. You are an avid saxophone player and you have been gracious enough to share a recording with us, so we're going to play a couple of minutes of that recording after we wrap up today. Dr. Bianca Bailey, CEO of Agriwater, Harvey Abouelata, VP of Commercial Solar at Solar Alliance. Thank you for speaking, me, speaking with me today on Energizing Tennessee.

Now, enjoy some music from Dr. Bailey. 

Bianca Bailey: Thank you. 

Harvey Abouelata: Thank you for having us.

Cortney Piper: And that's our show. Thanks for tuning into Energizing Tennessee, powered by the Tennessee Advanced Energy Business Council and FirstBank. We're glad to be your number-one podcast for news about Tennessee's advanced energy sector. If you like what you heard, please share it with others or leave a rating and review.

To catch the latest episodes, subscribe on Apple Podcast, Spotify, or wherever you get your podcasts. And don't forget to follow TAEBC on social media or sign up for our newsletter to hear about our events, or learn even more about Tennessee's growing advanced energy economy.