Climate One asks what solar power technologies will flare future efficiency and innovation. From an electricity generation standpoint, solar power's footprint is miniscule, but when looking at rooftop projects, solar is expanding exponentially. New financing models remove capital barriers, and residential and business owners are reaping the rewards. What's driving solar power, and what's the forecast for the future?
According to Edward Fenster, co-founder and co-CEO of Sunrun, the role of solar energy is not on the generation side of the energy market. Rather, solar belongs on a home or business, not in a desert where it has to be transported and distributed to a load center at high costs. "If you were to look at your PG&E bill," Fenster said, "two-thirds of the cost you pay is in getting the energy from the power plant to your home. So by putting a solar system on your home you're able to compete, not just with the cost of the energy itself, but its delivery." While solar has been scaling slowly in the generation market, he said, the growth rate of installations on homes and business is running 50-100% year over year, "and you compound that forward, the numbers get big pretty quickly."
Danny Kennedy, president and founder of Sungevity, said that the new cost model is the key to the fast growth in the residential space. "We've created finance structures that allow us to put a power plant on your roof. You get it installed for no money down and it's paid off through the life of the system. It's a pay-as-you-go electricity service contract." Kennedy sees his company as a service provider of electricity. And business has been growing rapidly. According to Kennedy, there was a lot of hype in 2012 about gas going into the grid, "but actually only 50% of new additions in the country were gas; the other 50% were wind and solar," he said. He compared the introduction of solar to the introduction of the cell phone. "We've got a similarly disruptive technology."
Speaking of his commercial clients, Marco Krapels, executive vice president of Rabobank, said, "they are owning solar as a future hedge against energy price increases and effectively fixing their energy costs for the life of the system, which is about 30 years." He added that, because it makes perfect business sense, he has seen zero default rates. Speaking of politics, Krapels said that many of the business owners he serves are Republicans. "They say 'we like the green that you guys think about in San Francisco, but the kind of green that we really care about is the green that ends up in my pocket.'" Krapels added, "And it turns out, they can have both."
In reference to his company's recent IPO, Lyndon Rive, co-founder and CEO, SolarCity, said that the investment community has been beaten up when it comes to solar, and there is no appetite for risk investments into the solar industry. He had to reposition his company as an energy company, selling electricity. "We need to transform this energy infrastructure that we have. People should not look at us as panel manufacturers, installers, financiers; this is selling electricity." He sees the business model as transforming the way his company delivers electricity.
Speaking of the SolarCity IPO, Kennedy said that it proved that the public has a taste for buying into solar, "proving what we know, that the people want this, and smart money is flowing into this like nobody's business." He said that Warren Buffet recently put $7B into a solar farm. "Catch a clue, people," he said. "The Saudi's are putting a hundred billion dollars into solar." Kennedy talked about the success of solar project crowd sourcing on the Internet. "That's an indication that the community is going long on this. They get the dynamics. They know that electricity price is going up and ours is going down."
Gregory Dalton is chief operating officer at the Commonwealth Club of California and Director of The Club's Climate 1 Initiative. He previously was international editor at The Industry Standard magazine, an editor for the Associated Press in New York, and a correspondent in China and Canada for the South China Morning Post, a Hong Kong newspaper.
Proficient in both Mandarin and Cantonese, he is a former term member of the Council on Foreign Relations.
At an age when most of his peers were learning arithmetic, Ed was at work on Lotus 1-2-3 analyzing numbers to create innovative and scalable financial concepts. After years as an investor, Ed aspired to apply his financial savvy and creativity towards his passion for creating a cleaner world. He co-founded Sunrun to make solar affordable for American families. At Sunrun, Ed focuses on finance, fleet operations, legal, and regulatory affairs. Under his leadership, the Company was the only residential solar company to enjoy an uninterrupted source of project financing through the 2007-2010 financial crisis. On the legal and regulatory side he works to shape policy and help build a sustainable subsidy-free solar industry. In 2011, Ed facilitated a partnership between Sunrun and U.S. Bancorp to support the purchase of $200 million in residential solar systems, a commitment that represents that bank's largest single tax equity investment to date. In 2010 he and co-founder Lynn Jurich received the Ernst & Young Entrepreneur of the Year award for Northern California. Before Sunrun, Ed served as Director of Corporate Development at Asurion Corporation. He also worked at The Blackstone Group, completing more than $10 billion in private equity and merger and acquisitions transactions. He is a member of the Pew Center on Global Climate Change, serves as an Advisory Partner to Millennium Technology Value Partners, and holds an MBA from Stanford University and a BA from The Johns Hopkins University.
Long-time social entrepreneur, Danny has achieved global recognition as an environmental activist, spokesperson, and opinion leader. The residential solar power company, Sungevity, Inc. which he co-founded in 2007, has been an integral part of his life's mission to promote the use of clean energy and eliminate the world's dependence on fossil fuel. The company uses an internet based approach to build and design residential solar arrays. His accomplishments have earned him numerous awards, including: Innovator of the Year, from PBS program, Planet Forward, for pioneering an easy-to-access and affordable residential solar solution. Danny previously served as a campaign manager for Greenpeace Australia Pacific and directed Project Underground, an organisation committed to the human rights of people struggling with mining and oil operations.
Marco is an Executive Vice President with Rabobank, where he runs Rabobank, N.A.’s commercial banking product groups including it’s capital markets and renewable energy finance divisions. Marco co-chairs the bank’s Corporate Social Responsibility (CSR) committee, where he’s initiated notable sustainability efforts, including a Rabobank solar/electric car project featured in the New York Times. Marco made two trips to Zambia in 2011 during a two-month sabbatical in order to implement Empowered By Light’s Project: ZAMBIA.
Lyndon Rive is the co-founder and chief executive officer of SolarCity. He has grown the company from two to more than 2,100 employees and helped it become one of the most recognizable brands in clean energy in less than six years. Lyndon has led the company’s efforts to raise more than $1.5 billion in structured financing and $200 million in corporate capital from a range of investors, including Bank of America Merrill Lynch, Google, PG&E Corporation and U.S. Bancorp. He has also helped the company enter a range of new markets to serve more than 150 schools and universities, a dozen regional and national homebuilders, and major organizations including eBay, Intel, Walmart and the U.S. Military. Prior to SolarCity, Lyndon co-founded Everdream, an industry leader in software and services for large-scale, distributed computer management. Lyndon negotiated the company’s partnership with Dell Computer, which acquired Everdream in 2007. A lifelong entrepreneur, Lyndon founded his first company at the age of 17, and in his spare time has been a member of the U.S. National Underwater Hockey Team.