Brothers Ricky and Harvey Wernet are two young entrepreneurs who since 2011 started Wernet Solar Solution & Engineering V.O.F. This is their story towards entrepreneurship.
Tell us about your company.
Harvey Wernet (HW): Our company designs and installs solar panel systems for households and companies. It is a relatively new product in Aruba but it has actually existed for more than 30 years. The company we work with, Solar World, is a German manufacturer with factories in Germany and Oregon. We work with both factories, as both manufacture brands and products that the other might not have. For example we import carports from Germany, as it is not so popular in the US. Originally we started with three brands but for strategic reasons we decided to continue with one, Solar World because according to us it is the best brand. It offers a complete package of product manufacturing, installation and maintenance service.
We are authorized installers for Solar World products. It means our installations are according to American and German standards and guarantee. If anything were happen to the product, we will contact the manufacturer and solve the problem. Solar World products have a guarantee of 25 years and recently introduced a new product that guarantees 30 years. Right now it is the only one available on the market and that is exactly the type of quality we look for to offer our customers. The client knows that when he purchases one of our products, that it is a good product with a long life. The investment he made is worth it.
Who are your clients?
HW: We install mostly for households but lately we are getting more and more businesses interested in solar panels as well. Since last year it is possible for consumers, households and businesses alike to get a zero-bill. This of course is an extra impulse for new clients.
Why did you decide to open a company together?
HW: We both studied technology in the Netherlands, I graduated in mechanical engineering at TH Rijswijk University and my brother graduated in building and construction engineering at The Hague University. Afterwards we attended the Delft University of Technology I attended sustainable energy and technology and my brother attended architecture and innovation. Both studies have sustainable building and energy in common, so in that sense our areas of expertise complement each other. To gain more knowledge in this field we continued specializing, first in Belgium, and afterwards in Germany before starting a company in the Netherlands. After a year, we decided to move and establish a new company in Aruba. At the time, Aruba was becoming more susceptible for sustainable energy and started to adapt its legislation to open its doors for companies, like ours, offering alternative energy systems.
Ricky Wernet (RW): When Harvey was still studying, I was working at the municipality of The Hague as a building inspector. I started to learn more about sustainable buildings and the many possibilities. Each time I was inspecting these buildings, it would hit me every time, why is this not yet possible in Aruba? Why aren’t we doing it ourselves?
Together we had such an extensive knowledge in this area. We knew we had the background, and now we had to do something with it.
Why solar panels?
HW: Whilst studying in Kassel, Germany, my brother and I went to different trade shows and that is how we started to learn more about the different brands and possibilities. We approached Solar World and learned more about their products and what they had to offer. The established contact was great and we really got intrigued by Solar World as a partner as they have a good design team for backup and as mentioned before, a complete package that really got our interest as we only have to deal with one company.
How did you find the experience to start a business in Aruba?
RW: It wasn’t as easy as we thought it would be. Our first startup in the Netherlands happened so fast, we got the needed guidance, registered the company and after that, had our business bank account within a week. Unfortunately, it didn’t go so smooth here. Registration at the Chamber went well, but opening a bank account and getting a business loan took a lot more than we expected. It made the start very difficult because a bank account is crucial in any startup, especially when doing international trade.
HW: Another blow was that it takes forever for products to arrive in Aruba. We knew that as everything must be imported, we had to take the time factor in consideration but it was slower than expected. Maybe we were just accustomed to a different business culture.
Are there any challenges in the market?
RW: One of the challenges was the Customs Department. When we started, it was just about the time that the Government introduced the 2% import tax on green products, such as solar panels. However this new regulation was implemented verbally. It was difficult to deal with the custom agents as many of the parts needed were not considered to be in the 2% category, such as cables and inverters, and some of the agents do not have the know-how of all our products. Hence, these parts are then levied at very high import taxes.
HW: This meant quite a price difference when you still have to sell the product. We had various meetings with the Customs Department to explain our products and why they are “green products”. It took a long time but thankfully that issue is solved now.
Another challenge is that once the product arrives in Aruba, it takes more than a week before we have it at our location. We should be able to get it faster. But we are learning along the way, and talking to all involved so that we can shorten the delivery time in order to provide a better service to our customers.
What we have also noticed is that in Aruba the people prefer to buy products from non-local companies instead of buying from the local companies.
What would you suggest as a solution?
HW: Talking to all those involved. Make it possible for entrepreneurs to get their products faster from customs, year round. Most businesses have a peak period when they sell most of their products; the product has to be at the business location fast. One suggestion would be to categorize the products in bigger segments and not each item separately as it is done now. For example, give all products in the solar panel business one flat fee.
How did you experience bringing a relatively new product to Aruba?
RW: This was also one of the challenges when we first started. The government was promoting green energy and many people got curious about it. So it looked easy at first but when we actually talked to the prospective client to explain this new technology, how it worked and what’s in it for him, it turned out to be a completely different story. As it was a relatively new and costly product, many people were reluctant to make the investment.
HW: We noticed that in most cases, prospective clients contemplated between getting solar panels or a new car. When buying a car, you get a bank loan and after a few years, you have to sell the car at a lower price and start all over again.
Solar panels are an investment. The client will most likely get a bank loan, and has to pay it off for 4 to 5 years, which means he has an extra expense to pay each month to the bank. But his electricity bill will lower almost immediately, meaning he is compensating one cost for another. When he has paid off his loan, he will gain only benefits. Our solar panels have a 25 to 30 years guarantee and the client will reap benefits from this investment long after having made the initial purchase.
The hardest part was to get the first clients, but once they were in, they started spreading the word and we were getting more calls. Word-of-mouth proved to be important in getting our name known.
RW: It is important to point out, that we are past the stage of having to prove that the product works. Consumers are generally more aware of its benefits and they have heard of our company. They have also heard of the monitoring services we keep providing after the solar panels have been installed. We monitor our solar panels through a blue tooth communication system which is connected to the internet and if there is something wrong, we will contact the client immediately.
Is there still room for growth?
RW: Yes. Lately we are being approached by larger businesses. We are aware to grow gradually, not too hard that we cannot manage the growth but it is our dream to become bigger and maybe, even start looking for opportunities abroad.
HW: We are currently expanding our services. As a building engineer, Ricky can design solar systems to fit the client’s available area, even if he does not have an adequate roof for the solar panels. Ricky can design a garage roof or carport. We also advise clients in the designing stage of their house drawing, before they go to the bank. And we make our designs beautifully to match the house. We think there is a solution for all houses.
One of our clients contacted us because he is going to retire within 6 years. Timing was perfect, because by then he could still get a loan. We went to his house, and made a calculation based on his monthly electricity use, what type of solar panels would be best for his house and advised him on what else he could do to lower his energy use. Based on our recommendation, he changed to led lights and inverter air-conditioning. His energy use is so effective now, that he has his air-conditioning working all day.
What do you think of the government’s plan to make Aruba a hub?
HW: We would to expand our services abroad in due time. We see potential in Bonaire, there is a lot of construction going on and Bonaire has direct ties with the EU, which makes all more feasible. But we want to be stable in Aruba first.
RW: In regards to the gateway concept, I think we need to have everything in order in Aruba first. For instance, say we start doing business somewhere in the region; the time for the products to arrive in Aruba must be shorter, because we will still need to ship them to a different location, and delivery time cannot be as long as it is now.
There are many companies interested in expanding to the region but the resources and logistics must be available and operating well. If we are going to be the gateway, I think that in due time, the harbor in Barcadera has limited capacity to accommodate all the imports and exports arriving in and from Aruba. A better solution would be to develop the harbor in San Nicolas so that Aruba is able to compete on an international level.
What would you think would be a new, feasible economic industry in Aruba?
RW: Sustainable energy has a lot of potential to grow and become an economic industry. Oil prices will continue to rise. We recently visited a trade show in the US, where we were the only company from Latin America or the Caribbean. This showed how much can still be done in this industry. And sustainable energy is broader than solar panels alone.
Many people are becoming aware that it is not how much it will cost but how much you will save by investing. For instance, one of our clients decided to include a carport in his mortgage. He is now paying an additional 40 florins on his mortgage because of the carport. But he is saving so much more because he is not paying any electricity costs.
What would you advise new entrepreneurs who want to start their business in Aruba?
RW: Do some research before you start your business. Make a business plan, know your competitors. Take courses to learn about how to run a business. Take advantage of various courses offered by the Chamber, free of charge, we attended those in the Netherlands and also here in Aruba and they were very helpful.
Make sure you know your product. We specialized in all areas before deciding on solar energy. Now we really know what we are doing. Many people just start any business, without having a good know-how of their product. We hear stories of companies installing solar panels without really informing the client well on anything and when problems arise, there is very little they can do. The consequence is that this unsatisfied client will tell his bad experience to everyone he knows, giving the industry a bad name. These clients are really hard to convince that their bad experience is not the norm and we can’t blame them.
Is there anything else you would like to add?
HW: No, not really, we just would like to thank the Chamber for this interview.