How ARCO helped kickstart the pot industry

Briceland in Northern California is hippie country, home to thousands of bombed-out remnants of the 1970s counterculture. They arrived from all over America to turn on and drop out. And to make money they grew hundreds of tons of of marijuana each year, a process that may well be about to become legal, and an even bigger business than it is at present.

On balance its a good thing the pot industry may be taken out of criminal hands, but it will be a wrenching change for the pot-growers of Northern California, and with that change a-coming its a good time to tell the story of how those same pot growers helped save the planet……. by enabling the birth of the solar panel industry. It goes back to a deal many years ago between an avid pot smoker and a young, eager oil industry executive interviewed exclusively in this article for the first time.

Briceland is in an area called the Emerald Triangle, the hub of the $14 billion a year Californian marijuana industry. But it also gave birth to a very different kind of green revolution. It was thanks to the pot-growers of Northern California that the solar power industry grew into the $60 billion a year behemoth that it is today. You could say that the solar industry, which is revolutionising the way our society generates electricity, is an unintentional side effect of marijuana growing.

“My solar business was entirely dependent on pot growers for the first few years,” says Dave Katz, founder and President of AEE Solar, the largest renewable energy wholesaler in the United States. AEE sells solar panels, inverters, batteries, and all the other cables and boxes needed to power a home from the sun. It is headquartered in Redway, California, a few miles from Katz’ house in Briceland. Land was $400 an acre when Katz moved there in 1980 – today it can fetch up to $40,000 an acre — without building permission.
Back then, Katz had a business selling parts for VW cars and vans – the hippies’ vehicle of choice. “People were just starting to grow pot—they all had these hand-built houses in the hills. They were dark, lighted with kerosene lamps. Everybody lived off the grid. And we would sit around and smoke pot,“ Katz recalled.The hippie homes in the mountains are still there, nestling amongst the redwoods. And they are almost all powered by solar panels which glint from the walls and rooftops wherever you look.
“We were doing things like running lights and stereos off the car battery. Then I thought, Why don’t I put two batteries in the car? Then I can always have one battery charged at home when I need it, even if the car isn’t there. I designed a little setup and you pushed the switch and disconnected the car battery and charged the extra battery. Then the neighbors wanted it and I was doing it for a lot of people.”
It was then that Dave got lucky; he was the right guy in the right place at the right time. He liked to visit the annual consumer-electronics show in Las Vegas. In 1980, he spotted his first solar panel. “It was an ARCO 33-watt panel, sitting in a booth full of solar toys.” Dave felt sorry for the stallholder who was ignored by the thousands of passers-by. “I asked him about it,” said Dave, “and he said, ‘Oh, nobody wants those.’ I bought a hundred of them and sold them in a couple of weeks, and people would pay cash.”
The word went out among the back-to-the-landers, and Dave was besieged. “I bought a bunch more and sold them in one week.”
ARCO, the giant oil company now known as BP, had used technology pioneered by the NASA moon landing team to develop these new solar panels. They were convinced the invention had a future, but did not know what the market would be beyond their own industry — powering oil rigs, pipeline platforms and remote communications equipment. So they set up Arco Solar and waited to see who would come forward to buy their new product.
Katz rang ARCO for more supplies. The company was intrigued and insisted on sending a salesman “to find out what was going on in this little grocery store.”
“The guy from ARCO sat there for days,” said Katz, and scores of pot growers passed through, paying cash for the panels.” They were the only people who could afford it – $400 for a 33 watt solar panel was a lot of money to spend to charge a battery.
What Katz and the Arco salesman were witnessing was the birth of the solar industry in order to serve the pot growers of the Emerald Triangle. Yet had Arco got wind of what their product was actually being used for, they might have put a stop to it immediately.
Katz recalled: “Up until then it had been a real hassle to keep all those batteries charged up, and it was expensive on gas for the generator.”
Solar panels transformed the economics of pot growing. Freed from the need to buy petrol, the growers not only saved money, they made fewer risky journeys into town during the harvest season.
That they did not was thanks to their salesman, Arthur Rudin. He has not seen Katz again since those days and now works at Solopower, a solar startup in silicon valley. Rudin, now 60, instantly confirmed Katz’s story. He was a rookie salesman who had only recently joined ARCO solar when he arrived at AEE, which was little more than a shack in those days. He was wearing a suit the first day, which would have been a little incongruous as he greeted the procession of long haired, denim-clad pot growers.“ I think I may have changed into something more casual when I came back the next day,” he added. “But I was always neat and businesslike.”
“It made perfect sense, and we wanted to support AEE,” Rudin told me.
At that point solar was a tiny retail business, mainly supplying caravanners. One of Rudin’s best sellers was a solar powered ventilation unit to cool cars and caravans. It soon became clear to him that the pot growers were using the solar ventilators to cool their illicit greenhouses, and at harvest time, to dry the marijuana before it was taken to be sold in San Francisco and Los Angeles.
“We kept it from them, ”said Rudin, when asked how the oil company parent reacted. “The focus really was on hiding what we were doing from the oil folks. We knew they wouldn’t understand.
“We wanted to keep it separate from our industrial business which Arco would understand. And (the retail sales) grew very quickly once we started supporting Dave(Katz). We did not talk about it much with parent company I talked with Dave about how to build the business. We wanted to build it as quickly as possible.”
In the Emerald Triangle these days, “most of the people who buy solar panels, and inverters and batteries use them to cool greenhouses,” Dave said. “A lot of the pot farms are very small—mom-and-pop in a ten-by-ten [greenhouse] because it’s legal to do that.”
It is now – thanks to new laws on growing marijuana for medical use; it wasn’t legal back then.
“I sold [solar panels] only, no installations,” Dave was careful to stress to me. If he went up into the hills, you could be sure it was just to smoke pot, not to help grow it. “There were so many people who lived on the land who wanted electricity,” he said. He had a guaranteed market. “Everybody else was happy with playing guitars and [using] candles. I probably ruined all that.
“Pot growers definitely made the solar panel industry. If you look at the major distributors—SunWize,Solar Depot, and AEE, all between Petaluma and Redway—that was where the big start was. All the companies that sold to the pot growers are still there.”
This doesn’t mean that there would be no solar industry without the pot growers; but it might have remained a very different industry, focused on large industrial applications instead of harnessing the power of the sun for hundreds of thousands of private homes and gardens.