#Solar100’s Dan Siegel: The Marie Kondo of Solar Tax Equity

Originally posted on pv magazine USA. In this #Solar100 Interview, Jason Kaminsky, COO of kWh Analytics, speaks with Dan Siegel, vice president of Renewable Energy Business Development at U.S. Bank.

What Marie Kondo does for tidying up, Dan Siegel does for solar tax structuring: everything in its place and a place for everything.

As vice president of Renewable Energy Business Development at U.S. Bank, Dan Siegel is an expert of tax law and highlights the order, logic, and understated (if not life-changing) magic of solar tax equity done well.

In this interview, Siegel discusses 2019 solar financing trends, the importance of solar data, and “Zen and the Art of Tax Equity Structuring.”


Jason Kaminsky: Thanks for making time to chat, Dan.

Dan Siegel: Sure. I’ll try to bring out the most interesting version of myself for this. I’m a tax equity provider, so keep that in mind.

Jason Kaminsky: [laughs] Well, I’m a former tax equity banker. We’ll both try not to go down the technical rabbit hole.

To start, you have an LL.M. in tax, then did project management at U.S. Bank for five years before moving into Business Development. How did you begin working at U.S. Bank and later move into the role that you are in today?

Dan Siegel: I graduated from Washington University in St. Louis for undergrad, and like many who finish college without a lot of forethought into what they want to do with their life, I ended up enrolling in law school. Frankly, I didn’t love it. I initially envisioned myself as a litigator, but then quickly realized that I’m not really the kind of person who would be very good at arguing both sides of an issue. I’m more black and white than that.

I ended up taking a year off from law school to work for the Kerry campaign and bartend, both of which were humbling experiences in their own way. After that year, I came back and took a taxation course, which unexpectedly resonated with me. I’ve always been a numbers person and I think that’s one area of the law where having that type of mind is helpful. Something that is sort of geeky about tax law that I have always appreciated: it comes with a set of instructions. You have tax law, and then you have the regulations that accompany it. That’s how I ended up pursuing my LL.M. in taxation.

While I enjoyed the subject of tax law, I realized that I didn’t really want to be moving people’s money from one place to another. Thankfully, I learned that there was a field called ‘tax equity financing’ and that one of the largest financers in the country is based here, in St. Louis. There was something very appealing about using tax law and getting a brick-and-mortar result out of it. To this day, I may be the only person ever to come out of school knowing I wanted to be a tax equity provider.

Jason Kaminsky: It’s funny—I studied pure math as an undergrad. And similarly, there’s a strict set of rules that helps you come to a conclusion. And, in some ways, tax law—even though the rules seem even more arcane—has a similar set of principles.

Dan Siegel: Absolutely. I think the real interest in tax equity is knowing that you have a rule set. Trying to pair what can be a regimented rule set to the commercial goals, knowing there’s a line, not wanting to get too close, and yet still wanting to achieve a desired result, is where I think the creativity comes in. That’s what has always been really appealing to me about this industry—using those arcane principles to try to achieve positive commercial results for the industry.

Jason Kaminsky: It’s more creative than outsiders might realize. It’s kind of like “Zen and the Art of Tax Equity Structuring.”



Jason Kaminsky: We just got back from Infocast last month. What themes are you seeing for 2019?

Dan Siegel: Every year since we started in 2008, people seem to say, “This is the year when nothing’s going to happen.” But every year we’re wrong as something always seems to come up. It’s interesting to see what’s already been happening this year.

A few big things that we’re watching this year so far:

First, the continued development of community solar gardens. As a tax equity provider with a mission-oriented bent, these types of programs appeal to us and we are always interested in exploring new ways to participate in markets as they develop. We’re seeing a good deal of investment opportunity and feel that will continue to accelerate.

Second, I think that this is the year storage finally starts gaining traction in large-scale commercial application. There’s going to be a series of unknowns that we’re going to work through, with everything from the specific technological complexities of the storage components, to making sure that we are being thoughtful about which storage providers and accompanying software applications that are used. The underwriting of those uses will be supremely important, as will the resulting revenue streams that I think people are only just now starting to imagine.

Third, we are also already starting to see a bit of pull-in resulting from the ITC step down. It will be interesting to see how far out financiers will be willing to commit to give solar developers comfort around their safe-harboring plans.

Jason Kaminsky: Six years ago I was at a conference where people said, “It feels like we’ve been pushing a boulder up a big hill, and it’s about to start rolling down,” and I feel like I could say the same thing this year. Eventually we’ll be right.

A theme that I’d say probably emerged more last year but continued for this year: secondary market transaction of operating assets. I’m sure your team is seeing these as a tax equity investor in many of those deals.

Dan Siegel: We’re seeing a lot of more passive financial cash equity players coming in to buy these assets. There’s been a lot of low-cost foreign money moving in and acquiring these transactions. That’s something that we’ve needed to get accustomed to as we more and more find ourselves facing financial counterparts as equity and indemnity provider in these transactions rather than the original developer.

Jason Kaminsky: As you think back over the last 10 years as a baseline, how do you characterize the tax equity market?

Dan Siegel: It’s funny, I don’t think that there’s only one tax equity market. I think that there are multiple tax equity markets, and people work in different layers of those markets. U.S. Bank is the fifth largest commercial bank, with around $460 billion in assets. As a result, while we do a lot, our tax capacity is eclipsed by the fourth largest bank and up. There are the very, very large players out there who will always be able to provide a deep well of tax equity financing to their large corporate clients, but that is probably never going to be an area that we regularly play in. Given that our capital is more limited we try to be incredibly thoughtful about which developers and which markets we serve.

One thing to note, is that the DNA of our group is not project finance; it’s not even energy, really. It’s more broadly tax equity financing. Our renewable energy group sits within a subsidiary of the bank that has a broad background in financing all types of projects with tax credits from low income housing, to historic buildings, to incentivizing job creation in economically disadvantaged markets. But this background speaks to why we work with a broad array of developers today—we want to maximize impact even if it means more work.

We’re never really out there hunting elephant-sized transactions. It’s always more about: Does the underlying business model make sense? Can we mitigate the risks? Do we like the people? Do we believe in their business model? If the answer is yes across those questions, we tend to pursue it. That’s allowed us to be early in residential and to be the first movers in community solar. We certainly participate in the utility sale side too, but we’re not trying to do four transactions and be done with our year.

Jason Kaminsky: I’m always fascinated by how different banks get into the market, and U.S. Bank came from a tax perspective, versus other banks like Wells Fargo which really came at it from, “Hey, we have an environmental commitment but how can we meet it?” They’ve migrated to the utility-scale side of the market, but your team is placing a lot more bets and works with a much broader, more diverse set of customers.

Dan Siegel: I think not having a traditional energy background can be freeing in a lot of ways, because we don’t come in with preconceived notions about what can and can’t work. Through the lens of the tax equity risks on which we need to focus, that has allowed us to be supportive of a couple of different industries that, for maybe issues of internal resource constraint or just internal bias, have been passed over by other banks.



Jason Kaminsky: We work closely with your team, and I would say U.S. Bank probably has the largest tax equity group of any bank I know—and the largest number of customers of any bank I know. Can you talk about some of the benefits and challenges that come with that?

Dan Siegel: Sure. We started in 2008, and today we have financed  about 11 GW of solar.

When we first started, it was basically me and my boss, Darren Van’t Hof, who had just  started looking at solar.

The group has grown a lot since then. We have four people on the origination side, which is where I sit. We have about 10 people on the project management side, about 10 people on the asset management side. And then we have a lot of cross-functional people supporting us. We are set up to do a lot of volume; I think our goal in a typical year is to do somewhere between 30 to 50 different transactions. That includes everything from relatively large transactions like 150 MW facilities in the U.S. southwest, to projects as small as 5 or 10 MW. Like any bank, we have origination goals so small transactions are often not the most efficient use of our time. That said, if there’s a good story there and a potential for positive impact on jobs, the environment, etc., we will oftentimes spend time on it, particularly if we think that that small model is scalable.

Jason Kaminsky: A lot of banks have tried to create a syndications strategy, where they bring in other co-investors, but U.S. Bank has been uniquely successful. How did you unlock this opportunity?

Dan Siegel: We have a lot of smart folks working on this, so I’ll speak for them when I say that I think there are three things that helped to differentiate us:

One, it was a source of need. Even without tax reform, we saw a day in the future where our partners needs were going to outstrip our own capacity.

Two, we’re a relatively flat organization—the CEO of our subsidiary reports directly to the CFO of the bank. As a result, when we’re talking to new co-investors, we appreciate the barriers to entry and are often able to bring the right people into those conversations who have understood and managed those issues previously.

Three, we can provide a differentiating syndication product by giving certainty to our customers; we fully commit to a transaction, even if we’re trying to syndicate it. For example, if we’re working with a developer who has a project, we will 100% underwrite the project during construction and we’ll make a finance commitment for the full project. During construction, we may try to remarket part of that interest to one of our syndication partners, but if that fails we’ll still fund it. We’re taking that risk away from the developer, which makes them a lot more willing to go with us.

As of today, we’ve brought in 19 different investors and raised over a billion dollars of tax equity. Most of our partners on the syndication side are non-traditional tax equity investors. There are some regional banks, but they’re typically not financial institutions. Most of our partners are retail, tech companies, insurance companies — people who don’t themselves have a tax equity practice and don’t plan to develop that capacity internally.

Jason Kaminsky: What’s your view when the ITC steps down on the role of tax equity in the market? Are there other products that you might develop?

Dan Siegel: That’s certainly the long-term goal, and it’s been something that we’ve been chipping away at for years. We’re not an infrastructure bank or a project finance bank, so the idea of doing project finance debt is a bit foreign in our institution. U.S. Bank is a conservative institution and sometimes, that also means that we move slowly and methodically towards new products. That said, we’d like to start doing lending soon and see it as fundamental to our growth and position in the marketplace. And then as we transition to a 10% ITC market, we would operate as a “lender-plus” and would be able to couple the loan with a tax equity investment.

Jason Kaminsky: When we track the debt markets in our Solar Lendscape, I think now we’re up to 50 banks in the market, and a lot of them are falling over themselves on margin. So, if you can provide a product that is coupled with a 10 percent ITC, I would imagine that that would be a pretty strong competitive advantage in that segment of the market.

Dan Siegel: We’re never going to be the cheapest, but I think what we try to do is be creative and we can hopefully create a niche for ourselves there.



Jason Kaminsky: You are now one of the largest—if not the largest—investors in solar in the country. What have you learned along the way?

Dan Siegel: We have an enormous amount of data about how assets are operating, and through our use of HelioStats, we’re working to get more thoughtful about how to synthesize and analyze information about our own portfolio. We are getting better at using our data to manage our portfolio: there’s lots of compliance and reporting we face as a regulated bank.

Our sponsors play an important role here— by helping us collect the data on our portfolio, sponsors contribute pieces to a broader story. Even if that information is not a direct issue or risk for us, we recognize that we have information that is crucial for the industry, so the question becomes: How do we take what we know and help the industry more broadly?

We also use the data to tell a story, and I’m part of a working group right now helping to summarize our data for U.S. Bank’s broader environmental communications efforts.

It’s funny—we started our tax equity investing as really just a pure tax equity investment play, with the projects’ environmental impacts being secondary. That’s changing. We’ve made a great deal of impact in the past 10 years and though it may run counter to the group’s midwestern sensibilities, we ought to tell the story and perhaps even be a little boastful about it.

#Solar100’s Emily Rogers, Zadie Oleksiw, and Jamie Nolan: Solar’s Communications Experts

Originally posted on pv magazine USA.

In this special edition #Solar100, kWh Analytics’ Sarah Matsui speaks with three solar communications experts, Vote Solar’s Zadie Oleksiw, Norton Rose Fulbright’s Emily Rogers, and Nolan Strategic Communications’ Jamie Nolan.

Expert communications people are like the Hermione Grangers of companies: They may be less visible than their more famous counterparts, but they are indispensable to the epic.

Maybe you haven’t heard of Zadie Oleksiw yet. But you’re probably familiar with some of the campaigns she’s been involved with at Vote Solar, including California’s historic 100% clean energy bill last year, which was one of the first in a slew of 100% clean energy initiatives now emerging across the country.

Similarly, perhaps you don’t yet know the name Emily Rogers. But you know her work. Rogers is the producer behind Norton Rose Fulbright’s Currents, the go-to podcast for solar financiers.

Since 2012, Jamie Nolan has been working behind the scenes to raise the profile of the U.S. solar industry, previously as the Communications Director for the U.S. Department of Energy SunShot Initiative and now as the Principal of Nolan Strategic Communications.

In this special edition #Solar100, communications experts Zadie Oleksiw, Emily Rogers, and Jamie Nolan talk about how to execute effective campaigns, produce chart-topping podcasts, and leverage communications best practices to advance the solar industry.


Sarah Matsui: Your career has been dedicated to work in solar. How did you first get into renewable energy and communications work?

Zadie Oleksiw: I think like a lot of other people who work in this space, I’m very motivated by the idea of solving big problems. For me, that’s always been climate change. Obviously clean energy has so many other benefits—for public health and for the economy, for example—but personally, climate change is paramount.

I grew up outside of DC, where I got exposed to civic activism going to all sorts of environmental and foreign policy protests and rallies with my mom. I think those experiences taught me two things early on. One: we have to get engaged if we want to make change. And two: stopping the bad things from happening was one way to do it. I majored in environmental science, but it wasn’t until I interned at the Solar Energy Industries Association (SEIA) that I got excited about the opportunity to focus on promoting positive, proactive solutions instead of working to fight problems—although I really appreciate the essential role of campaigns and people doing that important work.

I returned to SEIA after I graduated and met Jamie Nolan, who was managing their communications at the time. She demonstrated an understanding and ability to effectively communicate a range of subject matter—like federal and state policy issues—and that really appealed to me. It was the first time I appreciated that good communications professionals play a substantial role in any organization. Clean Energy Leadership Institute (CELI) was and continues to be another invaluable part of my professional development. CELI is a training program for clean energy professionals in the early stages of their careers and

designed to teach fellows the fundamentals of this sector—markets, finance, policy, and technology—while breaking down siloes across the industry. After I finished the fellowship I came on as a volunteer to develop the brand, lead the writing program, and launch its first fundraiser. If you’ve seen me or others gush about CELI before, it’s because it’s incredibly inspiring to be a part of a community of so many smart, driven people all committed to solving big problems.

Sarah Matsui: Last year when Adam Browning nominated you at SPI, he said, “Zadie is the ‘Solar Splainer of the Solar Movement.’ I think her ability to translate complex solar policy concepts from grid mod to rate design for non-wonks is worth celebrating.” In your experience, what is the solar movement and can you describe the role of communications in the movement?

Zadie Oleksiw: Well first, that’s a very kind compliment. I’ve been lucky enough to learn from the best, including from my amazing colleague Rosalind Jackson (who has also been described as the ‘heart and soul’ of the organization). One of things I love about Vote Solar—and that I think is apparent to anyone we work with—is that beyond this culture of respect, collegiality, and passion, everyone’s just really good at what they do. That makes my job a lot easier.

I’m not sure the best way to describe the solar movement beyond pointing to its sheer momentum. Solar is growing fast—in terms of megawatts built and customers served—and it’s also one of those rare topics that has so much broad support, that is creating jobs and boosting the economy, and that is absolutely essential for our future. It’s nice to come up for air every once in a while and get excited about being in this space.

I think the role of communications folks is to tell that story. Our job isn’t just to convince people—lawmakers, business leaders, investors, voters—that solar matters. We also have to persuade them to care enough to do something about it. Communications in any organization is a powerful tool to frame solar as an essential part of the American story. Every company in this space, regardless of whether it employs 5 or 500 people, can help tell that story.

From a policy perspective, renewable energy is also an area where something like 90% of voters across the aisle agree on it, yet in a lot of places that support hasn’t translated into meaningful policies. Part of the role of communications is bridging that gap between public opinion and positive policy outcomes.

Sarah Matsui: Your current position involves communicating wonky concepts to a broader audience. What does that kind of translation work require?

Zadie Oleksiw: I think two things. One is understanding the material. Second, is connecting it to their values—what people care about and what they want to hear. In any field, compelling people to care—and to take action—begins with appealing to their values. For example, I tried to make that connection in an article I wrote for The Hill a while back. The purpose of that piece was really to rebut an all-too-common anti-solar allegation in the same outlet, and my goal was to make a strong case that solar is good for the American people by appealing to widely-held values that would resonate with readers: saving money, controlling their own energy, and creating a clean and healthy environment.

Knowing who exactly your target audience is also really matters. Vote Solar has about 80,000 “activist” grassroots members all over the country and is working in regulatory and legislative campaigns in 24 states. Our membership is a tremendous resource to activate real people in all those states to make calls, write letters to their lawmakers, or show up to events. Generally, lawmakers care (or should care!) a lot about what their constituents have to say. Our role is to tell our grassroots members when an important solar issue is being decided and help them make their voices heard.

There’s so much political and geographic diversity across the country and we are always tailoring messages and messengers to the right audience. In California, for example, climate change is very much a part of our messaging because it’s an issue that’s important to lawmakers and the Governor and even regulators. But in South Carolina, where we’re working with a coalition to support a bill that, among other things, protects net metering, we would never utter those words. There, we talk about the energy choices that people want, that solar helps people save money, and that it’s an important job-creating part of the economy.

Vote Solar also does a ton of important regulatory work, like getting involved in rate design or integrated resources planning proceedings, that unfortunately doesn’t get as much love from the communications team. Most of it is a capacity issue—we’re a small team firing on all cylinders—but it’s something we hope to continue shining a light on as we grow!


Sarah Matsui: Norton Rose Fulbright partner Keith Martin said, “Emily is the brains behind the catchy ads we run at industry conferences, the Project Finance NewsWire layout, our project finance microsite, the look of our annual project finance conference, and much more.” A lot of this communications work is wide-ranging and behind the scenes. First, can you explain your job to someone who isn’t as familiar with communications work?

Emily Rogers: I first started here as a graphic designer, and my role expanded over time. The 1,000+ lawyers I work with practice different types of law and regularly produce thought leadership. My job is to help get those ideas in front of the right audiences. What I find interesting about communications work is the process of taking a very complicated subject and distilling it into a digestible format. I’m pretty entrepreneurial, and I’ve been lucky to work at a firm that allows me the opportunity to learn new things.

Sarah Matsui: How do you define and measure success for communications?

Emily Rogers: Different projects will have different measurements of success, but everything in the end for me is measured by meaningful engagement: Are people asking you about it? How many people are downloading it? How many people are looking at our website? What are they doing when they are on our website—what are they clicking, what are they looking at, are they finding what they came to find? Those are all questions that we can track on the back end.

For example, with our Currents podcast, we can track the number of downloads and subscribers we have, our ranking on different charts, etc. It was very exciting for us the first time we got to one of the Apple Podcast charts in our second year. Now, we pretty much reside on the Business News chart, so we’re always trying to beat our highest position.

Sarah Matsui: I first met you after Todd Alexander interviewed our CEO Richard for Ep.23, Ep.46, and Ep.55 of Currents, which is widely recognized as the go-to podcast for solar financiers. People might not know this, but you’re the producer behind Currents. What does producing a podcast entail?

Emily Rogers: It involves every piece that you do see as well as what you don’t. A lot of the unseen work I do is with Todd to figure out what topics we want to cover and which guest experts to invite. We used to have a lot of internal guests because it was a new podcast—the firm has a great group of projects lawyers, so it was really easy for us to draw on our internal team. After we established the show and an audience, it’s been easy to approach other experts in the industry to have them speak on different subjects. We spend a lot of time reading articles, seeing who is speaking where, and meeting with our own lawyers to see what topics they have been studying up on recently. We’ve also reached a point now where we are fortunate to have some of our guests reach out to us first.

The beauty of the podcast is that it’s very comfortable for our guests to do the interview because it’s not live. So we can do all of the audio editing, removing any lulls or stutters, to make the interview sound as smooth as possible. We also make sure the guest gets to listen to the podcast before it goes out to ensure that they communicated their point clearly and accurately.

From there, we syndicate the podcast to all of the different forums, share on social media and start work on the next one.

Sarah Matsui: There are a lot of podcasts out there. What’s enabled Currents to pull away from the pack and gain the following that it has?

Emily Rogers: I think the number one factor would be Keith and his NewsWire, which I believe kWh Analytics has also been featured in previously. People know the quality of content they’re going to get from Norton Rose Fulbright because Keith is such a great content producer.

Another factor would be timing. We’ve been doing this for about two and a half years now. But two and a half years ago, podcasts weren’t nearly as popular as they are now. We were probably one of the earlier people to market with a podcast in this space, and I think that’s helped.

Subject matter is another influencing factor—specifically, the variety of subject matter and speaking to what people care about in that moment. We think about the different thought leadership pieces that have been produced over the past 20 years and try to identify what’s really popular right now. What are people searching for? What do people want to know more about? And then, from there, we work backwards to decide who our guests should be.

Sarah Matsui: So you really take a ‘first principles’ approach and start by breaking down the problem—what’s the need and what’s the demand? And then you work to meet that.

Emily Rogers: Right. Because Todd and I can think that something would be popular, but it’s so much easier and effective to use the analytics tools we have available, to look at our website and see what people are actually looking for.

I’m always asking myself, “What is the purpose of this? Why am I creating this?” I approach every project or problem with that framework, and if I can work backwards from there, I find that I have a much more creative and open result than if I just have my own fixed agenda.

Sarah Matsui: What’s an unexpected lesson you’ve learned as Currents’ producer?

Emily Rogers: It’s great to work with Todd who has the same devotion for this that I do, because I think it’s fairly shocking for people to realize how much work goes into good podcasting. I have a huge whiteboard in my office that has our plan for the next few months about what we’re going to produce, the status of each interview, our guests and their scheduling, etc. We originally started out doing Currents every other week, and now we’re doing it weekly. It’s a lot to produce, but it’s also really gratifying.

Sarah Matsui: Wow, I hadn’t appreciated that Currents has hit a weekly stride now.

Emily Rogers: Yes. You can thank my host for that. I said, ‘That’s ambitious, but okay.’ It’s a good thing that we have a good working relationship.

Sarah Matsui: Now that Currents has passed the 50 episodes milestone, have you noticed themes in what makes for a successful interview overall?

Emily Rogers: As a guest, if you’re approaching this as a conversation and ignore the microphone in front of you, the interview flows and comes across as friendlier and is just easier to listen to. Body language translates,

even when people can’t see you. If someone’s a real hand talker and they’re not moving their hands, then they’re going to sound stilted in the podcast.

Sarah Matsui: Are there communications best practices that you live by, that you think would be useful for either founders or fellow comms professionals within solar?

Emily Rogers: Maybe not best practices, but I have a few rules to live by. First, find the team that you love working with. I adore the lawyers that I work with, and I’ve worked with many of them for over eight years now.

Second, find different projects that you’re passionate about. There are always the jobs that we have to do every day that are not fun but still need to be done, and that’s fine. But find something that excites you so that you’re always going to want to go to work the next day.

Third, find ways to measure meaningful engagement and then share it with everybody. I like to share the number of downloads we have, any feedback we get, and how many likes and clicks we have on LinkedIn. Because it is nice for our lawyers and team members to see that people are listening and their work is having an impact.


Sarah Matsui: Your educational background is in communications and public relations, both of which are industry-agnostic skill sets. What made you decide to work in clean energy?

Jamie Nolan: I grew up on the eastern shore of Maryland, on the Chesapeake Bay, and it’s one of the areas in the United States that has the most to lose from climate change. It was ingrained in me early on that we need to care for the environment. My dad is a boat mechanic and electrician, and I was raised in a family that spent a lot of time out on the water, where I would see litter and pollution. We took trash bags with us and cleaned up trash every weekend we went out on the boat. I grew up with an understanding of the importance of action.

And as I got older and as I learned more about climate change and the specific threat to the Chesapeake Bay region, there was nothing that motivated me more. Without action, the places that I grew up could be under water in 100 years. That’s what led me to decide that climate change was my issue.

I first got into clean energy by working as the communications director for a climate change advocacy organization here in D.C. called the Chesapeake Climate Action Network. I got arrested in front of the White House for protesting against the Keystone XL Pipeline. I consider myself an activist, and that’s what brought me to solar. I have found that when I really care about something, that’s when I produce my best work.

Sarah Matsui: Fellow #Solar100 leader Jen Bristol has called you “The Olivia Pope of Solar.” Pope is Scandal’s strategic counselor renowned for her ability to get things done. In your experience, what does effective communications get done?

Jamie Nolan: Effective communication is essential to solving any problem in business—whether it’s internal or external communication, you need to communicate and work with others.

It’s critical to have someone in your senior leadership team that has particular expertise in effective communications. When the stakes are high, you want someone on your senior leadership team who is really well-trained in communication to ensure that your message is being received in the way that you intend, whether it be an internal audience in the event of layoffs at your company or an external audience such as community opposition to a solar project.

Sarah Matsui: Are there communications best practices that you live by, that you think would be useful for either founders or fellow solar comms professionals?

Jamie Nolan: First is the importance of establishing a storytelling culture within solar companies. I encourage my clients to mine and share their stories—talk about what got you into this industry, what drives you, how you’ve been able to grow your career in this field. Whether it’s your personal story as a professional, your company’s story, or your customer’s story, storytelling is critical to helping your company achieve its goals.

Second, listening is critical. You need to ask good questions of the audiences that affect your business objectives so that you can communicate in a way that is going to meet them where they are, give them the information that they need, and ultimately lead to the behavior change that you’re looking for. For example, if you want to convince someone to go solar, you need to first understand what the person’s knowledge base is about solar. It’s a two-step process: First, you have to convince someone that they should go solar. Then, you have to convince them that they should go solar with you.

My third tip is simple: Strong writing. It is so foundational to what I do for a living and what all marketers and communicators do. It is also an important skill for anyone’s career. If you don’t consider yourself to be a strong writer, there are so many great free or low-cost writing classes. You won’t regret it.

Sarah Matsui: In your experience, who takes the lead on helping to build and establish a storytelling culture?

Jamie Nolan: I love when a CEO gets on LinkedIn and talks about something their company has done or lifts up their partners. Often solar company employees and executives are also important ambassadors for their companies. It’s not just about sharing stories from the corporate brand perspective, from the corporate brand website, or social media profiles. Absolutely anyone in a company can and should contribute to this.

A key listening opportunity for professional communicators is the weekly staff meeting. When I was at SunShot and managed a team, I would assign my team members to attend meetings to mine for stories. People who were working as developers or project managers might not necessarily think that something that they’re doing is significant that should be shared outside of the organization, but that’s our job as communicators to mine for those stories. Listening in on those meetings, even if half of what’s being discussed goes over your head or isn’t important to share with your audiences, can provide the ideas for your next tweet, blog post, or even a pitch for an exclusive to pv magazine USA. Listening is foundational, and sometimes you have to dig for what’s compelling, but it’s worth it.

Sarah Matsui: What made you choose to start your own cleantech communications company?

Jamie Nolan: I want to encourage other people, especially parents and women, to consider going out on their own and creating their career in solar with their own company. I’m an entrepreneur now and the reason that I decided to do that was because I was having a child. My husband works a really tough schedule, and I wanted more flexibility in my schedule and more control over my hours. I was also ready to work on different projects after working in government for four years. So I took a big leap by going out on my own about a year and a half ago, and it’s honestly been the best thing I’ve ever done for myself. My confidence, my courage, and my skills as a communicator have grown at such a rapid pace since I became self-employed, because you have to do challenging things every day.

There is a small but mighty network of us out here who are either ‘solopreneurs’ or own very small PR firms specializing in clean energy. We’re very supportive of one another. If you’ve been thinking about starting a company, reach out for support and you can do it. I’m only in my early 30s, and I did this. So it can be done.

Sarah Matsui: From your work at SEIA, the Department of Energy SunShot Initiative, and now Nolan Strategic, you’ve spent a lot of time working in solar communications. Can you name three behind-the-scenes communications leaders who you think are helping advance the U.S. solar energy industry?

Jamie Nolan: Certainly!

First, I want to highlight Rosalind Jackson. She has been on the forefront of solar and central to some of the most impactful issues in the industry over the last decade. I have tremendous respect for her, and we all owe her for her tireless advocacy on behalf of our industry for many years. Plus, she’s brilliant and kind, which I love—it’s my favorite combination.

Alex Hobson is wrapping up four years at the Solar Energy Industries Association (SEIA), where she actually held the role that I had at SEIA a few years ago. She just accepted a new gig as the Vice President of Communications for the American Council on Renewable Energy, and I can’t wait to see what she does there. Alex has been behind most of the big stories about U.S. solar that you’ve seen in mainstream media outlets over the past four years. Her work has broadly raised the profile of solar energy.

Third, I have to highlight one of my former employees and mentees, Jennifer Bristol, who is still at the U.S. Department of Energy’s solar office and is a total rising star in this space. When I first interviewed Jen, we didn’t have a position to put her in, so we made one. She is endlessly enthusiastic about solar, she’s a creative powerhouse, and she’s empathetic and warm. When we brought her on, she worked with the office’s awardee companies, so she has a lot of great industry relationships. I wish I had the budget to hire her right now. She’s going to do big things in her career.

#Solar100’s Dan Shugar: The Bono of Solar

Originally posted on pv magazine. In this #Solar100 Interview, Richard Matsui, Founder & CEO of kWh Analytics, speaks with Dan Shugar, Founder & CEO of NEXTracker.

As the Founder and CEO of NEXTracker and as the lead guitarist for Groovity (a crowd-favorite at the annual solar ‘Battle of the Bands’), Dan Shugar’s as close as they come to a solar rockstar.

And as Shug says, “I think that music and building great companies are very aligned—what’s hard is having endurance, staying power, and sustainability. You don’t want to be a one-hit wonder or the band that does one great album and then breaks apart. It comes down to building cultures that encourage people to achieve their full potential.”

In this interview, Shug talks about securing his landmark customer at NEXTracker, advice for new solar entrepreneurs, and the theme songs of his favorite high-impact solar nonprofits. Nominated by fellow leader Danny Kennedy, Shug is the Bono of Solar and this month’s featured #Solar100 leader.


Richard Matsui: You have years of experience in solar and are well-known for your work at NEXTracker, SunPower, and Powerlight. Was Powerlight the start of your career in solar?

Dan Shugar: I got involved with solar through dumb luck. I was working at PG&E as an electrical engineer in the 80’s and when I was presented with an opportunity to work on a one year “temporary” assignment in the R&D group in San Ramon. That “temporary” assignment turned into a 30 year career. At the time, PG&E had the leading research and development program of any utility.

I saw solar and thought, “Wow, this stuff is very modular—let’s also consider the localized value of strategically setting it at the end of a weak electric transmission.”

So I authored this paper in 1990 called “Photovoltaic Grid Support Evaluation of System and Distributed Benefit.” We developed this methodology, and I ended up leading a small team of really talented people at PG&E, people like Howard Wenger. We were able to publish the results through a national program at the U.S. Department of Energy, and I personally published dozens of papers on this. I’m not trying to be like the godfather of the industry’s literature, seeing as we’re standing on the shoulders of people like Dick Swanson or Charlie Gay, but from an application standpoint and value creation standpoint, this created a new category. Instead of this hurting the grid, it actually helps the grid when it’s done properly.


Richard Matsui: Solar is a notoriously tough industry to build a company. Hardware is similarly notoriously tough. You co-founded a successful solar hardware company that experienced a very rare outcome: a lucrative exit. I heard that you had an impossible challenge in securing your landmark customer. Can you tell that story?

Dan Shugar: Yes. I had this virtually intractable problem: I needed to get my cost down quickly, and to do that, we needed volume.

We had very little working capital, and it was incredibly difficult to raise money as a solar hardware company. We also did not have a significant track record at that point, and we needed someone really big to help get our volume up. I decided to have a conversation with Ahmad from SunEdison—I knew his team was dissatisfied with other providers in the tracking industry at that moment because they weren’t getting a reasonable cost and price roadmap. And in 2013, SunEdison was the 800 pound gorilla from a demand creation standpoint in the global solar industry.

I got Ahmad on the phone and he said, “Dan, we’ve developed and now have our own tracker, the AP-90, and it’s great.” I said, “Okay, what’s great about it?” Ahmad started rattling off the attributes, and I realized that the AP-90 was almost a direct variant of the tracker that we had done for fifteen years previously. It was a linked push/pull tracker, so they all move at the same angle, like Venetian blinds. Twenty-five years ago, the supporting technology wasn’t there, so it made sense to build a tracker like that. However, that’s not the case in this decade.

So I said, “Ahmad, let me tell you why your thing is a dinosaur and why ours is better.” I asked him to meet me at NEXTracker, and we spent three hours in a field on a Sunday afternoon discussing NEXTracker’s prototype. After that, he had his team build three systems at their test facility in Colorado: a system with their tracker, ours, and a third party’s. It turned out our tracker was three times faster to install.

They started allocating projects to us right away, and we saved them a lot of money. We captured the huge wave of U.S. projects that happened in 2015, 2016, and 2017—over 90% of their tracker volume for a two to three year run. We’re still doing projects today that came from that original Sun Edison pipeline. They drove us really hard, but we were hugely responsive.

Do you remember “Rope a Dope” with Muhammed Ali and Joe Frazier? You have this super strong adversary, so what you do is kind of lay back, cover up, and let the opponent exhaust themselves. Then you come in and hit him. We basically used that strategy. Whatever they wanted, we said, “No problem.” We played ball with them, and then we produced a very vigorous customer diversification strategy.

Richard Matsui: You’ve succeeded in closing massive, high-stakes deals. How have you done it?

Dan Shugar: Well, any hubris aside, I think we had a better mousetrap in that instance. But generally, I think it’s really about listening to the customer—where are their pain points? Listening and understanding where we can add value that aligns with our customers’ goals and motivations is key. It sounds very high level, but it’s really that basic. You probably did the same thing with the Solar Revenue Put.

Richard Matsui: Kind of. No one ever wakes up and says, “You know what would solve my biggest pain point today? Insurance.” But if you listen very carefully, you hear the true pain point that underlie the proximate pain point. For us, it was realizing that in order to reduce the cost of solar energy, this industry needs to quantify the risk/reward profile of our assets. That requires data.

Your landmark customer story is pretty incredible. What other advice would you give to a new solar entrepreneur?

Dan Shugar: One, listen to the customer. And two, I would add that I’m hugely in favor of capital-light business models.

Richard Matsui: [Laughs] Says the guy who started a hardware company?

Dan Shugar: But guess what? NEXTracker has no factory. If you look at our capital expenditure, the depreciating basis that we have is extremely low. We work with others that run factories better than we could ourselves. Then we focus on working with partners in logistics and operations. We have offices and manufacturing partners on five continents, and we’re optimizing the flow of material and manufacturing goods, in real time. It’s very comfortable for us to operate a global business.

And that differentiates one as a manufacturer, because operating from a global platform helps keep production levels fairly steady. Markets expand and contract rapidly but while one market is down, another one might be up. That strategy served us extremely well, and it was built from a demand and supply standpoint. We had the DNA to do that.


Richard Matsui: We recently interviewed Jenny Chase from BloombergNEF, and her prediction for 2019 was “bifacial models everywhere.” Why is everyone taking about bifacial?

Dan Shugar: I’ve had a love affair with bifacial from day one. I first saw bifacials around 1990 or 1989 at the PVUSA site in Davis. When we built the site 12 years ago with PowerLight, we had 2 of the 14 MW of that bifacial, we used the Sanyo HIT. It worked extraordinarily well. We measured something like 12%-14% yield gains, but that was an extraordinarily good site, and it was an extraordinarily optimized tracker for that application, with a very low GCR at the site and high albedo.

When we did the original NEXTracker system, the NX-100, it was predicated around bifaciality. Our client Invenergy announced a 224 MW project being built in Georgia that’s bifacial. In the US alone we’re building over 750 MW of bifacial systems.

A lot of manufacturers are telling me they’re sold out for this year with normal stuff. Some companies are being vocal and really driving bifacial, and others are happy to be followers and are waiting to see how the market responds to the situation.

Richard Matsui: We’re also seeing a dramatic uptick in the number of projects considering bifacial modules, and are actively working with a few clients to enhance their financings by bringing in Swiss Re to guarantee the energy yield uplift from bifacial. What performance levers do you see in bifacial projects?

Dan Shugar: I can point out two major determinants in performance, especially related to PVSyst: backside efficiency and albedo. Back side efficiency of the panel is determined in the lab, and you can model efficiency by flashing the panel, and you basically know that the back side is going to do X, Y, and Z. Albedo is probably one of the biggest single drivers. And as literature shows, albedo varies by different terrains: If you’re over black asphalt the albedo is 10%, over green grass and it’s about 20%, in the Sahara and it’s 40%, over white snow and it’s closer to 70-90%. That can be measured on sites with an albedometer over time. Then you start getting into the system configuration. If you run numbers for how systems are typically built, first of all, you want a tracker, because the trackers have lower GCRs.

You need reflection from the site. The more granular your array, the higher the bifaciality. In our case, we have one portrait design, that is just intrinsically better than a two portrait design, because from a bifaciality standpoint, the umbrella is half the width. Therefore, in order to compensate for width, you have to lift it really high. So you can get a two portrait tracker with the same back side reflection as a one portrait tracker, but then you have a bunch of structural cost involvement and all that coming into play. So, you want to be one portrait, and in our case, you want to suspend the modules between with piers and expanding over those and over the drive system. So we’ve got a pretty damn near optimal configuration for bifacial. We’ve been working with these customers, educating the market, talking to IEs and so forth.

Richard Matsui: Generally speaking, what are you seeing in terms of cost-benefit from the developer’s standpoint?

Dan Shugar: It depends how much of the incremental cost is on the module. From my standpoint, yield dwarfs everything. You really want more yield out of these plants. That’s why our TrueCapture technology is taking off so nicely. There’s a lot of fixed cost in development, maintenance, and insurance, so if you can amortize those in kilowatt hours, the leverage is unbelievable and the financial leverage is incredible, especially if the Solar Revenue Put is guaranteeing the energy yield improvement. I absolutely love bifacial, but there are right ways and wrong ways to do it. Our recommendation is basically to do a one portrait orientation.

The only other thing we haven’t talked about that’s really important for bifaciality is the DC/AC ratio. If the DC/AC ratio is really high, you are curtailing a lot of the bifacial gain. If the DC ratio is 1.0, over 90% of the bifacial is gained based on the capture. If the DC ratio is at 1.5, it will probably be less than half, due to clipping. It then drives you to a lower DC ratio than otherwise would be optimized for the site. TrueCapture performs on the shoulders, so the early morning, late afternoon, and in diffuse conditions. It’s purely additive to bifacial, so they play very nicely together.


Richard Matsui: You’re a mainstay at solar’s annual Battle of the Bands. We’d like to propose something here: First, can you name five nonprofits that are making a difference in solar, and second, if they each had an anthem, what would it be?

Dan Shugar: Certainly. I think that music and building great companies are very aligned—what’s hard is having endurance, staying power, and sustainability. You don’t want to be a one-hit wonder or the band that does one great album and then breaks apart. It comes down to building cultures that encourage people to achieve their full potential. Whether in a great company or a great band, you want to give space for everyone to contribute and listen to what is happening.

In terms of specific nonprofits I think are making a difference and their anthems:

Wind Solar Alliance – “We Can Work It Out” by the Beatles

Wind and Solar are finally playing well together, for the benefit of both key renewables and to fight the same fight.

Vote Solar – “You Are the Sunshine of My Life” by Stevie Wonder

They’re working, state by state across the country, to expand solar access through advocacy and policy.

Sierra Club – “Only So Much Oil in the Ground” by Tower of Power

I was on their board for six years and the Sierra Club, more than anyone else, really helped transition the North American grid off coal. They do fantastic work, they’ve got a great brand, and they’re very involved in energy.

GRID Alternatives – “Towards the Sun” by Rihanna

They’re making both clean, affordable solar power and solar jobs accessible through residential solar installations to low-income communities.

Local State Chapters – “Come Together” by the Beatles

Lastly, I would say the state chapters—CALSSA is a great example. Folks should engage in whatever state they’re in (a/o country association). People really need to man up and woman up and support these industry associations. All our key suppliers are required to be members in good standing with these organizations in order to sell to us. The folks that don’t do that are free riders on the industry, and that’s not cool. We’re going to keep pushing, and we need to rally together.

#Solar100’s Emily Kirsch: The Oprah of Clean Energy

Originally posted on pv Magazine USA.

In this #Solar100 interview, Richard Matsui, Founder and CEO of kWh Analytics, speaks with Emily Kirsch, Founder and CEO of Powerhouse.

Dubbed the “Oprah of Clean Energy” by Emily Fritze and Alex Harbour of Powerhouse – with special thanks to fellow #Solar100 Leaders Kyle Cherrick and TJ Kanczuzewski for the nomination – Emily Kirsch is Founder and CEO of Powerhouse and the driving force behind a growing clean energy empire.

Emily’s dedicated her career to “supporting entrepreneurs who are building the future of energy.” Her company, Powerhouse hosts and invests in cleantech software entrepreneurs.

In this interview, Emily talks about Powerhouse’s origin story and their big new announcement. She also gives out our first-ever startup superlatives, including Most Changed Since Freshman Year, Life of the Party, and Most Inspiring.



Richard Matsui: People in the industry know you as the Founder & CEO of Powerhouse. How did you first get into clean energy?

Emily Kirsch: My first experience with clean energy is pretty unique. After high school, I had a scholarship to a school in New York. My whole plan was set, but at the last minute I decided I didn’t want to do any of it. Instead of going to college, I moved to Central America and lived on an organic chocolate and coffee farm in Costa Rica. It was heaven. What made it such an influential experience for me was that the farm was off-grid and fully powered by solar and storage. I remember being mesmerized by this technology that could provide us lights at night with no generator, no noise, no fumes. Just peaceful, quiet bliss in Costa Rica.



Richard Matsui: What’s Powerhouse’s origin story?

Emily Kirsch: I started my career working with Van Jones, a political powerhouse who now has his own show on CNN. I worked at the organization he started here in Oakland for six years doing workforce development, climate policy, and state ballot initiative work all focused on clean energy. I’m grateful for that experience on the policy side of the industry, because so much of our industry has been enabled by policy. Van was friends with Prince who was doing anonymous philanthropic work across the country. For Prince it wasn’t about his name, it was about doing meaningful work. Prince wanted to do something related to clean energy in Oakland, and at the same time Billy Parish and Dan Rosen were starting Mosaic. Van made the introduction, and Prince gave Mosaic a grant to help kickstart their Oakland pilot.

At the time, Mosaic was helping non-profits crowdsource capital so they could go solar. They needed someone who was plugged into the Oakland community, so I worked with Mosaic on their pilot (which nobody knew at the time was backed by Prince). I loved the team and what they were enabling these great organizations in Oakland to do. I helped to connect them to some of their first customers and Danny Kennedy, who became my co-founder, connected them to their first investors and provided them with their first office in Berkeley.

I realized then that every startup needs those three things: customer connections, capital connections, and physical space. I thought to myself, “This is the San Francisco Bay Area. There must be someone, some organization, helping clean energy startups get access to those three things.” I looked for months while I was still working for the organization that Van started, but I couldn’t find anything. I wondered, “How is that possible?” We’re the hub of global clean energy innovation and venture capital, and yet this doesn’t exist.

I was young and idealistic enough at the time to say, “I could start this”. I was 27 when Danny and I got our first investor to put in $50,000 at which point I quit my job to start Powerhouse. Danny was already hosting Mosaic and a couple other startups (including kWh Analytics) in extra space at Sungevity’s old office, and that became the first home for Powerhouse.

Richard, I remember when you had a tiny office there and the only thing in that office was a suitcase because you were always on the road. Every time I saw you, no matter what season it was you were wearing shorts and flip-flops and I thought, “This guy is definitely from Hawaii and he’s onto something.”

That’s pretty much the origin story. It started with you and Mosaic and a handful of other companies. Since then, we’ve hosted over 60 clean energy startups out of our office in uptown Oakland.



Richard Matsui: In the early days of any business, there are always problems. What was the biggest problem you had to solve at the start of Powerhouse?

Emily Kirsch: It took time to build trust. Trust is always a work in progress, but it took us a while to establish ourselves as a legitimate player in the space. It took us years to get to the point where people knew us at all—let alone respected and believed in us. Now, it feels like an inflection point. The successful companies we’ve helped support, our monthly Watt It Takes podcast, our signature events, have all helped us establish trust. You can only build the depth of relationships that it takes to be successful over time.

Richard Matsui: That really resonates. I think most people would broadly categorize that as brand building, but that kind of trust is more fundamental. I’m sure you’ve had a couple of watershed moments, times during which you felt like you were really moving the needle. What are those moments?

Emily Kirsch: When I’m out and about in the world, people usually say one of two things: “I love your Watt It Takes podcasts” or “I love your New Dawn party.”

The first time we threw New Dawn was in May 2014 when we moved into our new office in Oakland’s Uptown. I said, “We should do an office warming party,” because that’s what people do. We were only a year old at the time and I was so afraid that no one was going to show up that I personally emailed every person I’d ever met through Powerhouse— literally hundreds of people. We anticipated somewhere between 30 and 50 people would show up. The day of the party we end up with more than 300 people on our roof deck, which has capacity for maybe 50. Everyone I spoke to said something along the lines of: “This is the best clean energy party I’ve ever been to. You have to do this every year.” That was the beginning of New Dawn.



Richard Matsui: Every startup ends up evolving its model. How is Powerhouse’s model shifting over time and how does it relate to the big announcement you just made?

Emily Kirsch: The biggest evolution in Powerhouse’s model has been the result of recognizing gaps in the industry that we are uniquely positioned to fill. After working with early-stage startups for a few years, we heard over and over again that they needed access to smart seed capital. There are a few energy savvy angels out there and some funding through the Department of Energy, but startups need a seed fund led by people who truly understand

the industry, with investors who have the corporate and capital connections to help make these investments a success.

For months we looked around the country for a seed specific fund for clean energy, and were again shocked to find that it didn’t exist. At that point, we realized that we already had the brand, the reputation, and the credibility to raise this fund, so we did. Just yesterday Bloomberg covered the launch of our new fund, Powerhouse Ventures.

Richard Matsui: How big is the fund going to be?

Emily Kirsch: The seed fund is $5.5M and we invest $50K-$200K per startup. It’s still an insane amount of work to form $5M compared to a $50M fund, which helped me understand why so few people do seed funds. Powerhouse’s infrastructure has been instrumental in launching Powerhouse Ventures—both entities are mutually beneficial, and profits from Powerhouse help enable the funds operations.

Richard Matsui: I didn’t realize that Powerhouse is profitable—that’s fantastic.

Emily Kirsch: We’ve grown steadily; about 20% a year, every year.

Richard Matsui: The previous Powerhouse model resembled the Y Combinator model. What drove you to move on from the YC model to a venture fund model?

Emily Kirsch: There are a few reasons that our model evolved. First, when we were investing via our accelerator, the investment capital came from our own revenue so we were limited in how much we could invest, and our deal flow was limited to startups at pre proof of concept. Some of the early startups that we invested in have been successful; UtilityAPI has become the default utility data provider for our industry. Second, accelerators have a set time frame which is usually 3-6 months. This time constraint limited our ability to move quickly on deals, because we were only able invest on a set schedule. Lastly, we required that startups we invested in be based in Powerhouse which restricted the pool of startups we could select from. With the fund, we can invest in startups anywhere and anytime, with the right amount of capital.



Richard Matsui: You’ve served as a judge for the DOE SunShot Startup Showcase and the Clean Energy Leadership Institute (CELI) pitch competitions, and you talk to startups every day. You eat, sleep, and breathe startups. What kind of traits do successful teams share?

Emily Kirsch: We have a four T framework. The first, and most important T, is team. Every investor says this, but especially at the seed stage when there is often little or no revenue, the team is everything. The second T is total addressable market. Your market has to be big enough to be interesting from a venture standpoint. The third is timing. The last T is technology. A lot of entrepreneurs and founders think about tech first, but the other Ts are as important if not more from our standpoint as seed investors.

Richard Matsui: It sounds like an inversion of the cleantech investment model circa 2007.

Emily Kirsch: Exactly. Most of our investment emphasis and process have come from insights developed in-house. We’ve been selected by the Department of Energy to run a program called Access Innovation. The purpose of the program is to talk with every major energy company and utility in the country and learn what challenges they are facing, how they work with early-stage companies, and what types of teams and technologies they want to connect with. Simultaneously, we’re building a network of hundreds of early-stage clean energy startups and then we get to play matchmaker.

We’re excited about this initiative because we’ll be able to help startups develop products with direct feedback from their potential customers. We measure the success of this program through the number of startup customer agreements, pilot projects, investments, and even acquisitions that are made as a result of our matchmaking.

Richard Matsui: The grant fits squarely into what you already do, and you’ll be able to expand it in the next logical adjacency, which is talking to every single utility. That’s fantastic.



Richard Matsui: Can you name a few off the radar startups in solar for the following categories?

Emily Kirsch: Happy to!

Startup Awards: Most Unexpected

Leap. They’re an energy software startup that’s developed a distributed energy exchange platform allowing users managing distributed energy resources to participate in demand response through an API. They have the potential to remove technical barriers and enable responses to price signals and verification of load reduction. They win the most unexpected award for the 90MW capacity contract that they secured through the California Demand Response Auction Mechanism (DRAM), which is more than half of the total MWs awarded to all of the other contract winners combined.

Startup Awards: Best Marketing and Communications

OhmConnect. They describe themselves as a software-based power plant. Instead of turning on dirty coal or gas plants during peak demand, they can tap their users to reduce electricity consumption. OhmConnect wins the Marcom award for creatively engaging their customers with texts and rewards for saving energy. Fun fact about them: They came out of our first hackathon in 2012, before we were even incorporated.

Startup Awards: Most Intellectual

Station A. It started in 2013 as an internal tool that NRG would use to determine optimal sites for projects, and spun out in 2018 as a result of the increasing complexity and scope of what they were building. Today, Station A develops software that leverages data at scale alongside geospatial analysis and machine learning to model the locational value, feasibility, technical operations, and financial performance of clean energy assets across the country. I’ve had the opportunity to see their software in action—it’s really powerful stuff.

Startup Awards: Most Changed Since Freshman Year

Solstice Energy Solutions. We’ve worked with them since pre proof-of-concept and it’s been incredible to support them in their journey over the past couple years. Solstice has developed SHYFT, a hybrid inverter and corresponding energy management platform that lets homes and businesses in emerging markets monitor and manage power sources via a mobile app. After graduating from Stanford, the cofounders, Ugwem Eneyo who is Nigerian-American and Cole Stites-Clayton were struck by the billion plus people who have only intermittent access to electricity, many of whom use diesel generators as backup power. Solstice is enabling people in Nigeria and beyond to leverage software to reduce the use of their diesel generators and shift to solar and storage.

Startup Awards: Life of the Party

Station A also wins the Life of the Party award. When I was on stage at New Dawn, there was this one section of the audience that kept clapping and yelling. I looked over like, “Who are these people”?” It was the Station A team. Throughout the night, you would hear this faint ‘AAAAAAAA’ and it was their team yelling the letter ‘A’ for Station A. Their “Life of the Party” award was set in stone when they showed up on the dance floor and ended up staying until the very end of the night.

Startup Awards: Most Inspiring

SparkMeter. They offer a low-cost microgrid metering solution to existing urban central grid utilities. Their customers are utilities, and their product helps make access to electricity possible in harder to reach, underserved markets. They’re not very well known, but they’re already in 22 countries around the world and have 30K+ units installed. Their customers are utilities like E.ON that are building out microgrids in emerging markets. They’re doing some really phenomenal, unique, and cutting-edge work in bringing functional micro grids to market.

#Solar100’s Jenny Chase: Speaker of unpopular solar opinions

Originally posted on pv magazine USA.

In this #Solar100 interview, Richard Matsui, Founder and CEO of kWh Analytics, speaks with Jenny Chase, veteran solar analyst at Bloomberg New Energy Finance.

It’s that time of year when people are reflecting on the past year and thinking about what the new year will bring.

Here to talk about 2018’s “Unpopular Solar Opinions” (ironically a pretty popular Twitter thread) is Jenny Chase, BloombergNEF’s Head of Solar Analysis and this month’s featured #Solar100 leader.

Chase has her degree in Physics from Cambridge and has dedicated her career to solar market research. Having thus studied solar’s history for almost fifteen years, Chase knows solar’s past, and we think she’s one of the most qualified people to discuss solar’s big picture trends and future.


Richard Matsui: You’re known in the industry for your solar analysis work through Bloomberg New Energy Finance, but can you tell us about your path to BNEF, and how you ended up in renewables?

Jenny Chase: To be honest, there isn’t much of a story before BNEF. I was one of the many students who wanted to do something for the environment, and I thought energy was a good bet. I went to study physics, but I wasn’t actually that good at physics, so I chose an internship with a slightly unusual chap, Michael Liebreich. He hired me, the company was reasonably successful, and then in late 2009, Bloomberg bought us and we became Bloomberg. Our first location was a very startup-y office in London—it was a big celebration when we first got a kettle.

Richard Matsui: [laughs] That kettle story is relatable. You mentioned that you wanted to do something for the environment. What prompted that interest?

Jenny Chase: My parents are kind of hippies, and when I was a kid I read a lot of news articles, the New Scientist, and a lot science fiction. Old science fiction focused on environmental awareness. For as long as I can remember, I thought that the most important problem to solve was going to be environmental degradation and climate change.

Richard Matsui: What were some of your favorite books back then?

Jenny Chase: I very much love Ursula Le Guin’s The Word for World is Forest and Isaac Asmiov’s work. Although Asimov is best known for robots and early space fiction, he had a deep if matter-of-fact environmental consciousness to his work. A lot of science fiction includes terraforming and other fundamental changes to the way things are. It’s an entire genre based on the idea that we can change our world, on purpose or by accident, and that could be good or could be very, very bad. It is much harder to be a climate denier when you just finished reading a smart novel set during the terraforming of Mars.

Richard Matsui: As someone who also grew up reading science fiction, I can definitely relate to that. Shifting back to the “startup-y office in London,” any other anecdotes that capture what it was like to work for NEF in the early days?

Jenny Chase: A couple of years in we brought in a chap called Chris Greenwood as a manager, and because I’m generally totally oblivious to anything that’s outside my sphere of immediate interest (solar), I wasn’t expecting him in the office. But one morning I came in and this guy was washing all the dishes in our absolutely filthy sink. Chris turned out to have a lot more to him than just being able to wash the dishes, but the fact that he didn’t know what to do because nobody else was in, so he cleaned up, was amazing. He had a history of management consulting and he really brought us to the next level professionally. But the first time I met him, he was washing our cups.

Richard Matsui: That’s what you need in the early days especially—smart people who just aren’t afraid of that kind of work. It speaks volumes that so much of your early team is still there. You seem to still be very tightly knit, which is impressive from a company culture standpoint.

Jenny Chase: Michael [Liebreich] said he wanted it to be an “Asshole-Free-Zone,” and I think he was successful. We’re very proud of our company culture.



Flattish Prices in Solar Tenders

Richard Matsui: You have a great “Unpopular Opinions on Solar” thread on Twitter. I wanted to ask you to expand on a few of those. To start, can you expand on #13? “We’re in for a couple of years of flattish prices in solar tenders, generally $25-35/MWh in sunny risky countries with a few below in sunny stable ones. Many Indian projects which bid low prices won’t be built at those prices.” I think this is a more controversial one than some people might realize.

Jenny Chase: I think costs will carry on coming down, but not necessarily as much as people  assumed they would when the bids were made. We’ve seen no new record in 2018 in India, where the record still stands at 2440 rupees $34.8) per megawatt hour for Indian vendors set in May 2017. They’re not inflation indexed, that’s what makes them so difficult to understand! Inflation in India is really high so the cost of capital is high, but these tariffs are fixed.

Richard Matsui: Fair point. Given the bidding dynamics, the expected rate of cost reduction obviously matters, but so does the market perception of that cost reduction.

Jenny Chase: Exactly. And we’ve already seen in the intent that we’ve seen no new record for Indian bidders that, in the past year, that’s at or below $34.8 per megawatt hour. When we try to estimate the assumptions that Indian developers must have made on capex, capacity factor, operating costs and financing costs to expect a profit at these bids, we struggle to use realistic figures. One of the problems is that these tariffs are fixed for 25 years, not inflation indexed, so as India’s inflation is high the value in later years will be much lower than it is today. I honestly still have difficulty understanding how they expect to make money, and think it may be to do with tax treatment that I do not understand.

Richard Matsui: The Indian solar market historically featured an abundance of solar developers that are both aggressive and relatively inexperienced. The resulting lack of pricing discipline has been problematic for the market, and has resulted in projects promised but not delivered. You mentioned that there hasn’t been a new record low bid in the last 12 months, which suggests pricing discipline. What’s enforcing that discipline?

Jenny Chase: I think developers are pulling back a little bit because some of the more extreme projects have not been built. The latest bids out of Gujarat are higher than previous ones. But at the same time, the state government is saying “Well, you can bid lower than that, set a new record!” Meanwhile, banks are not super willing to lend, although they can be fairly sure they’ll get their debt back. Equity holders are hurt first when projects underperform, not debt holders.

Curtailment: Feature or a Bug?

Can you say more about #6? “Curtailment (cutoff when the grid can’t take all production) of solar is going to be a widespread phenomenon. It’s a feature, not necessarily a bug.”

Jenny Chase: I think we’re starting to see a clash between the engineering view of the world, where efficiency is very important, and the financier view of the world (which is probably more realistic these days), which is that if it’s cheap, it doesn’t actually matter if you generate too much. The engineer is horrified by the idea of throwing away excess power, but by doing so you can help the grid out quite a lot. The problem with solar is that it’s very peaky. You generate a lot of power between about 10:00 a.m. and 2:00 p.m., and then it tails off quite quickly and this peak and this ramp rate can be a problem for the grid.  However, solar is so cheap now that if you can get halfway decent prices for off-peak power, it can make sense to simply throw away some of the peak overproduction.

Curtailing solar is also pretty easy from a technical perspective. For example, one of the issues with the California gas market is that some gas plants don’t shut down in times of peak power production because it takes them too long to ramp up again. With solar, you basically just have to tell the inverter to move the system voltage and current away from its maximum power point. . By curtailing relatively small amounts of solar production, you can massively reduce the amount of ramping that the rest of the grid has to do. You can possibly reduce wear and tear and even demand for other components of the grid, and without curtailing more than a few percent of total generation, which is really cheap anyway.

The PV Project Stakeholder Landscape

Richard Matsui: In #19, you wrote, “Operation and maintenance in desert environments will prove more challenging than PV project stakeholders expect.” Can you say more about what you’re thinking there?

Jenny Chase: I’m talking about some of these super low solar power price bids, particularly in the Middle East, which are so low that they must assume very cheap O&M. . I don’t think anyone has a lot of long-term experience managing photovoltaic systems in hot, dry, dusty environments on a shoestring budget. Some of the PPA prices, if you try and back-calculate what they must be paying, there’s not a lot of margin there. I think that dust will be a little more problematic than they think it will be.

Richard Matsui: Right. Everyone wants to bite at the gigawatt solar project.

Jenny Chase: Because of the way the solar market works at the moment, if you don’t bid beyond what every sensible person would be comfortable with, you don’t get a project and you don’t have a job.

Richard Matsui: That’s the brutal reality of it. We’ve been asked to quote the Solar Revenue Put for a couple of projects in the agricultural heartland of California, which is very dusty. And we’re seeing sponsors take—in our view—an aggressive view on soiling losses that isn’t substantiated by historical performance data. To your point, we understand why they’re doing it. They have to be aggressive to win, but some of these bidding behaviors don’t seem sustainable.

Jenny Chase: Absolutely. You never want to say, “Sure, we’re going to lose on this project.” But I would be a tiny bit concerned about that if I were them.

Richard Matsui: I think it’s interesting that the sentiment in the solar market now mirrors sentiment in the public equities market, where “everyone knows” that the market is overheated and that a correction is inevitable. What do you think happens in the next three to five years—will there be a blow up? 

Jenny Chase: Well, it might not be as spectacular as a blow-up. If your investors are expecting five percent of return on equity and they actually get minus one percent, what can they actually do?

Richard Matsui: Well, they could sell, right? They could theoretically sell at a discount and write off the loss. There’s a class of nimble investors like Generate Capital that would be glad to pick up distressed assets. 

“Losing” vs Waiting for a Bargain Price

Richard Matsui: #3 is the last one I’d like to talk about specifically: “Countries that have built little solar to date are not “losing” to high-solar countries. They wisely waited for a bargain on price!” I read that and thought, “That is a great counterintuitive perspective.” You’re right. But a couple things that came to mind: One is that Germany did the whole world a favor by signing up for solar at 0.50 a kilowatt-hour for 25 years and taking a multi-billion dollar hit. I mean, would any of us in solar have the jobs that we do today if it wasn’t for them?

Jenny Chase: [Laughs] Yeah, I am super grateful to the Germans for giving me my job.

Richard Matsui: If I’m going to take the opposite side of the argument, which is hard, I would argue that while the Germans didn’t get the upstream manufacturing businesses that they thought they would get, there’s also a number of German renewable energy developers that are based in Germany because it is the birthplace of our entire global market.

Jenny Chase: While it’s true that there are some fantastic German companies that wouldn’t be there if the market hadn’t started in Germany, most are in project development or EPC, where the problem is that the barriers to entry are fairly low. It’s difficult for developers and engineers to take huge, long-term leading market positions.

Richard Matsui: That’s fair.

Jenny Chase: I admit that was more driven by the other side of the equation, which is countries that are saying, “We are only number 89 in solar capacity!” And to that I say, “Who bloody cares? Build it now!” We’re seeing really dramatic price falls – module makers are arguing about cents per watt rather than dollars per watt, so now is a better time to build solar now than at any point in the last ten years for a country. Next year might be slightly better, but now’s not bad.

Richard Matsui: It’s true. Of these unpopular opinions, which has been the most unpopular or controversial?

Jenny Chase: That’s a good question. I’ve actually been surprised over how little pushback I’ve gotten on any of these. It’s possibly because I muted all the nuclear people who just ask, “What about nuclear? What about nuclear? You should talk about nuclear more.”

Possibly the most controversial: #27 “Getting to 100% renewables is really hard, but getting to 50%, 60%, 70% will not be as hard as we think and after that we will have a better toolkit for the rest..” This is a little bit contentious because it is very difficult to see that renewable energy can fully provide the current rate of on-demand power that we consume. On the other hand, we don’t need to use as much power as we do now to live high quality, developed-world-standard lives, including all of the people that don’t currently have energy access. The big challenge is not going to be lowering the total amount of energy, but shifting when we use that energy.

Richard Matsui: I’ve heard Shayle Kann from Energy Impact Partners, who we’ve also interviewed previously for the #Solar100 series, say, “In the past we used to forecast load and dispatch generation, and in the future it will be the reverse.” I think it’s another elegant way of stating that idea.

Jenny Chase: Yeah, that’s great.



Richard Matsui: Is there one of these “Unpopular Solar Opinions” that you stand behind the strongest?

Jenny Chase: You and Shayle understand financial theory. But I don’t think enough people in the environmental community understand financial theory. One of the reasons that I wrote a book [Editor’s Note: Jenny Chase’s book, Solar Power Finance Without the Jargon, is coming out with World Scientific Publishing in 2019] is because my past environmentalist, hippie, science student self did not realize how important finance and the concept of discount rates were in decision making. That knowledge needs to more widespread.

It’s actually quite a deep concept, because otherwise we have no way of comparing costs and benefits now with costs and benefits in the future, which are also uncertain.

You can argue all day about discount rates, and you should if you’re making an investment. But you can’t argue against the principle of using the appropriate discount rate to reflect the risk that a scenario will not come to pass.

Richard Matsui: Absolutely. In our hiring and onboarding process, as well as in our ongoing team meetings, it’s important that our team understand the underlying finance in our industry. Bryan Birsic at Wunder puts it really well. He describes finance as the Archimedes lever—the one thing that you could really move the needle on, precisely because the discount rate that you apply to a given asset is tremendously impactful. Most people don’t realize this.

Jenny Chase: It is. I’ve also just seen a couple of tweets over the last couple of days that mentioned that discount rates are fundamentally unethical. But they’re not; you’re comparing a certain outcome, something happening today, with an uncertain outcome. Preventing the certain bad outcome or ensuring the certain good outcome is worth more than the uncertain one.



Richard Matsui: Predictions for 2019? Especially things that you think are going to catch people by surprise.

Jenny Chase: For 2019? Bifacial modules everywhere.

Richard Matsui: I like it. What makes you think that?

Jenny Chase: Turns out that you can use glass instead of backsheet. Sorry DuPont, they do seem to give you more energy output in a lot of applications, and probably make a more durable product.

Can I give you a 2029 prediction?

Richard Matsui: Please.

Jenny Chase: By 2029, we’re going to be talking a lot more about seasonal energy storage and solutions for decarbonization. So far, we’re just getting our feet wet, we’re paddling around the shallows of decarbonization. Hopefully by 2029 we’ll be starting to wonder what happens if we turn off our coal and gas plants, even in winter. I realize that most of the U.S. is actually south of Europe, but seasonal differences in power demand and in solar generation in Germany or the UK are massive. We have a lot of variants between summer and winter in terms of day lengths and energy demand. And that means that from a [solar] perspective, solar may be the cheapest way of generating energy, even potentially somewhere like Germany. But, it’s pretty useless in the winter, so we might see some really strange things on the table. One I’m currently looking at is keeping a lake of molten salt under a lot of ground.

Richard Matsui: Sorry, one more time?

Jenny Chase: Keeping a lake of molten salt underground.

Richard Matsui: Wow, that is interesting.

Jenny Chase: You heat it up in the summer and, hey, maybe you generate power, or you use it for heating in the winter. I’m sure there are startups doing this, but the ones I found so far have already gone bankrupt, so either it’s incredibly challenging for reasons I have not yet found, or it is an idea whose time has not yet come. The whole issue of seasonal storage, for both heat and power, is going to be much more on the radar in 10 years than it is today.

#Solar100’s Ray Shem: Solar’s Cassandra

Originally posted on pv Magazine USA.

In this #Solar100 interview, Richard Matsui, Founder and CEO of kWh Analytics, speaks with Ray Shem, CFO at Pine Gate Renewables.

In Greek mythology, Cassandra was gifted by the god Apollo the ability to see the future. She was also cursed to utter prophesies that were true but no one believed—until it was too late.

Today, Ray Shem’s understanding of real estate finance cycle and the solar industry lends itself to sharp analysis of solar’s evolution. In this interview, Shem provides a clear framework for understanding the sponsor equity market and describes a future solar market in which new entrants displace or acquire many of the current incumbents, reshaping the competitive dynamic of the entire industry.

Ray Shem is a solar soothsayer and this month’s featured #Solar100 thought leader.


Richard Matsui: I saw that you have your BA in history from Yale and your MBA from University of North Carolina. What drew you to renewable energy and how did you begin working at Pine Gate Renewables?

Ray Shem: When I graduated from college, I originally thought I wanted to be an attorney. I was randomly assigned to the real estate practice group, and after a year, decided I wanted to work on the principal side of things. Real estate was booming around that time, so I left the law firm to work for a startup real estate developer in D.C. flipping houses in the revitalizing parts of DC. Then I went to Chapel Hill for their real estate program.

After I graduated from UNC in 2008, I took a job working for a medium-sized regional developer based in Charlotte. Two months later, Wachovia was basically bought for a dollar, Lehman failed, and I ended up selling condos for two years—fun. It was actually terrible, but it was formative in terms of gaining experience failing and needing to be creative to move units. After a few years, I ended up running capital markets and acquisitions, raising project debt and equity.

Zoe Hanes, who worked at FLS Energy at the time, was my neighbor and recruited me to go into solar.  I started off doing project finance at FLS, including tax credit equity and project debt, underwriting new investment opportunities, and developing the corporate finance strategy. That’s how I got into this industry.

Richard Matsui: Having witnessed firsthand a full economic cycle in real estate, what lessons do you apply in solar?

Ray Shem: It makes me pretty risk-averse. My biggest lesson was the importance of asset quality. Quality is especially important when things get rough. In 2009, if you had great real estate, you could always move it. Yes, it would sell at a discount, but you could sell it. Bad real estate didn’t move at all. It was just frozen out.

Solar is a little different because of the secular trend of cost reduction. Construction costs are down and the cost of capital is falling. It’s a big tailwind that mitigates some of the volatility. People have made aggressive bets on the cost curve continuing to fall, and to date they’ve been right. Even under the burden of the module tariffs, we’re seeing modules trading at pre-tariff levels. So, there’s still some room there. A development asset that looks bad today may look good in a year.


Richard Matsui: You have an interesting framework you use to describe the sponsor equity market. Can you outline it here?

Ray Shem: I see the world bifurcated into three different types of sponsors: early stage developers, aggregators, and long-term owners.

Early stage developers tend to be hyper-local and in the right place at the right time. You see it in Minnesota, in Massachusetts, South Carolina, and other states. Legislation changes, policies move, and all of a sudden, a bunch of homegrown developers pop into place.

You then have aggregators, folks that have some degree of development experience and can crawl into a deal and understand the risks associated with it. Aggregators have access to larger pools of capital, including tax equity, debt, and some form of sponsor equity. These developers aggregate projects, typically in the “distributed utility” segment, though we’ve also seen this with some C&I as well. These developers create value by aggregating portfolios to a scale that can successfully attract capital from large tax equity and debt providers in the market.

And then you have long-term capital: the infrastructure funds, pension funds, and insurers that want to be long-term owners of these relatively low-risk infrastructure assets.

Aggregators play a role in market-making. In our work, we see a lot of small projects that make sense from an economic perspective. But the scale of those individual projects is too small and requires someone to aggregate them into a portfolio to fit an investor who wants to write a $50 million check.

However, a secular shift is underway. As the mystique around tax equity financing continues to fall away and the tax credit itself steps down, I think you will start to see pressure on the aggregator as a business model. Early stage developers, by deploying high-risk dollars and pushing policy that creates markets, will continue to create and capture value. In the aggregate, they will be fine. But the pie shared by aggregators and long-term owners will increasingly see the value migrate towards longer-term owners.


Richard Matsui: It feels like half of the aggregators in the industry today have a “For Sale” sign in the window. Where do these firms end up?

Ray Shem: It’s a big question. Ultimately, I see two directions:

Some aggregators will begin to increasingly pivot to in-house greenfield development and become early stage developers.

Some aggregators will go in the other direction and sell themselves to long-term owners. The sale of sPower to AES and Aimco a few years back is a classic example of this.  As a result, some of the aggregators are likely trying to position themselves for this kind of exit. The key question is, “How well are they trading?” I know there are a couple out in the market, but I don’t know how those processes are going.

Richard Matsui: I think we, as an industry, are all holding our breath to see the results. Valuation will be the key question. When the purchase price is ultimately paid, that sum will represent the value of the assets on book plus the platform itself.

Ray Shem: Yes, and “platform value” can be an elusive thing. When we were at FLS, we thought we could clearly articulate the case for an acquirer to value the platform itself, and it proved to be somewhat illusory. A lot of value ended up being driven by assets on book.

Richard Matsui: Are you hearing that “platform value” is getting more value than what is has historically?

Ray Shem: I think it is an opaque, illiquid market. Without hard data points or trades that I’m thinking about in particular, my bet is that some platforms are getting value. I think those are probably platforms that had big pipelines, and that is probably where the value ultimately gets attributed. If I were managing low-cost money looking for a home in infrastructure assets, I would also be focused on pipelines, and then making sure that the team was in place that could translate that pipeline into investment opportunities. What I would expect to see is buyers first look at the pipeline, and then they lean into the bid, based on their confidence in the team.


Richard Matsui: Let’s talk about the long-term owners. It seems the category can perhaps be divided into two different groups: strategic and financial. From the strategic side, you have companies like BP and Shell buying Lightsource and Silicon Ranch. One of our own investors is ENGIE, which has acquired SoCore and Infinity Renewables. There are several other active strategics. They generally seem to follow a consistent logic—they want to own the businesses that will build the future energy system. From my perspective, strategic acquisitions appear to be motivated by a desire to internalize the talent and institutional capability, even as assets drive the valuation. But what about the financial long-term owners, like Capital Dynamics or New Energy Solar? Will they be using a different playbook?

Ray Shem: That’s a good distinction to draw. It probably depends on the source of money. Strategics are far more likely to look at a platform transaction. If you’re New Energy Solar, you’re not going to go back to your shareholders and say, “Hey, guess what? I just bought a company.” That’s probably not in the mandate.

I can see the aggregator firms bifurcating. Some aggregators will be acquired by strategics. Other aggregators will likely develop deep relationships with cheap, passive capital—the third group.

Richard Matsui: This introduces an interesting dynamic. If aggregators continue to get acquired, or start to develop exclusive relationships, or become early stage developers, then it could suddenly become difficult for a long-term owner to source projects. Even if they do have a competitive cost of capital.

Ray Shem: Yes. All of this boils back down to the scarcity of projects. It’s the linchpin. In a world where aggregators fade away, an important question becomes, “Can the small early-stage developers and the large pension funds find a way to do deals, even without the middleman?” As corporate PPAs continue to grow, we are already seeing a need for higher capital requirements for developers to strike those deals, which favors larger players.

I don’t have a background in conventional energy, so I am going out on a limb here, but I see two structural features about solar that dis-favor the strategics. Historically, conventional energy assets required a high degree of sophistication in energy markets. While some larger solar assets are management intensive, solar assets in general are a lot more of a pure-play financial investment: You have a long-term contract, you have merchant curves, and other factors that end up informing the value. The advantage of being a strategic is somewhat blunted vis-à-vis solar.

The second factor is the highly local nature of solar development. Small utility-scale projects continue to proliferate, nationwide. Community solar uniquely enables a near-retail compensation for near-utility scale cost structure. Succeeding in that market is a hyper-local question—Who can get the zoning? Is the policy regime in place? Who can sign on this offtake? Who can get their foot in the door before the local program closes? Those scenarios don’t necessarily play to the benefit of large, national strategics. It will be interesting to see ultimately where that lands. 


Richard Matsui: You are very familiar with the aggregator business model, so it’s fascinating to hear you describe the secular headwinds there. Does the decline of aggregators and the rise of strategics and financial long-term owners represent the natural “end state” for our industry? I’m reminded of that Francis Fukuyama title—is this “The End of History”? 

Ray Shem: [Laughs]. Not necessarily. There’s still a fundamental gap here. If you have 4% equity capital, you need to deploy it in increments of hundreds of millions of dollars. There is an inherent mismatch between cheapest source of capital and what projects are available. From what I’ve seen, average project size in utility-scale is actually decreasing, even as these large long-term owners require bigger deals. Here’s the challenge: if I’m a local developer, I need to find someone with a few million dollars to finance my project. If I go out and raise that from friends and family, I’m not doing it at four percent. The aggregator has historically done that work. The question is, “Is this model the future of solar development?” If so, you could argue that there’s a permanent role for working capital to aggregate portfolios to a scale that can attract cheap capital.

Richard Matsui: I see. Is your hypothesis that that the aggregator role will still be needed, but it will be fulfilled by strategics that have vertically integrated down into the aggregator function? And that large, standalone aggregators will be increasingly rare, or even cease to exist in the future?

Ray Shem: Overall, I do see increasing pressure on the aggregator business model. At the end of the day, it comes down to competitiveness. Who will be more competitive: The strategic that has a reasonably cheap source of capital and has the operating businesses that can operate a distributed fleet of small utility-scale farms? Or the financial investors that may have the cheapest capital, but does require an aggregator intermediary? You could argue that the most efficient market will be the latter, where aggregators and financial investors are competing vigorously for every project. And vertical integration doesn’t benefit a strategic that much because the requirements to operate a solar farm isn’t high.

Richard Matsui: That makes sense. But sometimes, the market does not reach an efficient end-state. If I’m a strategic with an aggressive growth target in solar that I need to hit, I have to get my capital moving and start acquiring. Especially if I start seeing bigger aggregators getting snapped up, I’m going to start feeling very anxious that I might be the only one left without a date for the prom.

Ray Shem: Exactly. I think that will definitely happen. In fact, we’re seeing it now—for example, Orsted with Deepwater Wind. We are starting to see strategics insist, “I need to have a renewable energy platform.”

Richard Matsui: Yes. And if those strategics lock up dealflow by acquiring many of the bigger aggregators, it would seem to put the financial investors in a tight spot. Or perhaps new aggregators would simply emerge. We are in interesting times.

To wrap up, can you give me a non-consensus bet that you think is going to play out over the next couple of years?

Ray Shem: I live in Asheville, North Carolina, so I think every perspective I have is probably a non-consensus perspective.

If you’re a carpenter, every problem is a nail and every solution needs a hammer. So, my background is real estate. I think ultimately what you’re going to see in the marketplace is a lot of diversity—because of the diversity of the underlying assets. You’ve got everything from residential, small C&I, small utility scale, all the way up to massive 500 MW plants. I think you could make an argument that there will permanently be a diversity of players in the marketplace. I don’t necessarily think that this market will run to a singular end state, where all projects are fiercely competed for equally by all players. I do think there will be a lot of heterogeneity in terms of the marketplace and in terms of small, nimble developers taking advantage. I think you will continue to see some aggregators, though I do see added pressure on that business model. But if you build relationships and you can add value to those development relationships, there’s probably a niche for that. I think the strategics are just getting started here. The diversity of business models that we see today will reduce, but you’re still going to see a lot of diversity.

We haven’t hit the end of history yet.

#Solar100’s Lidija Sekaric: Solar’s Jack of All Trades

Originally posted on pv Magazine USA.

The saying goes, “A jack of all trades is a master of none,” positing a distinction between a generalist and a specialist.

Bucking convention that someone could only be a generalist or a specialist, Dr. Lidija Sekaric is solar’s jack of all trades.

Previously as Director at the Department of Energy’s Solar Energy Technologies Office, Sekaric effectively served as a cleantech investor. Before that, she worked as a research scientist, earned her PhD in applied physics, holds thirty U.S. patents, and has over forty scientific publications. Now shifting from government to business, she works in strategy and marketing.

In this interview, Sekaric talks about the future of distributed energy and what she’s learned about successful teams after hearing $1B of solar funding pitches.


Richard Matsui: From a PhD in applied physics to research at IBM to policy work at the Department of Energy, you have a unique career in renewable energy. How did you get started?

Lidija Sekaric: I started my career working as a Research Scientist in Nanostuctures and Exploratory Devices group at IBM. Although it was fascinating work, and I was working alongside very smart people, I decided to shift my focus to renewable energy. I felt that I needed to do something about climate change, using whatever brain power I have.

So in 2009, I joined the US Department of Energy (DOE) as an American Association for the Advancement of Science (AAAS) Science Policy Fellow, a two year program that encourages participants to engage in policy work where they can contribute with their critical thinking and analytical skills. Before us were the big problems in policy and technology, especially with the new administration in place, and we asked questions such as, “Is there a new material we may need for solar to become the default energy source?” or “Is there a new device we need to invest in?”, towards, ultimately: “How can solar be made more affordable all around?” Afterwards, I was recruited for the newly-founded SunShot Initiative at the US DOE Solar Energies Technologies Office (SETO).

After seven years with DOE and five with SETO, the renewables landscape had changed quite a bit. There was so much more activity in the private sector in renewables and distributed energy that was not there when I first got into the field. An opportunity with Siemens came up and a company that has an incredibly wide array of technologies and business engagements was very attractive. It, too, followed the expansion of my personal universe when it came to technology and business activities.

Richard Matsui: How does having a physics and research background influence or inform the way you think about these very different roles?

Lidija Sekaric: In my current role in Strategy and Marketing, I do not spend much of my time thinking about the next greatest material or device. We build projects that are bankable, and so we don’t integrate solutions right out of a lab on customer sites—there is no need for that, with an array of proven solutions. But I have found that my research background is helpful when communicating with colleagues across executive, R&D, and sales departments. Whether it’s thinking about fluid dynamics or grid operations, or talking about product offerings in the context of market needs, it is useful to be able to quickly grasp and communicate technical concepts, without needing to learn them from scratch.


Richard Matsui: What do your customers value, when you pitch them on distributed energy solutions?

Lidija Sekaric: Cost savings, reliability, and sustainability—and the order of importance changes for a different customer class. If we look at the U.S. military as an example, the mandate has previously been sustainability and minimizing cost to the government. Reliability was always absolutely needed,  but now I think that reliability is certainly first and foremost. Similarly, hospitals and aid shelters think about reliability first.

And then, there are customers who want to save money in the short-term, or have a customer-driven path to reducing the carbon footprint.

However, even if the customer’s stated motivation is sustainability or reliability, all of them want to see savings from the project. Because these projects can and do save money. Because now we don’t have to assume that you always have to spend more to have cleaner, on-site power.

Richard Matsui: Fascinating. I’m reminded of an interview we did with Jigar last year, and this was the point he was making, too. He was saying that sophisticated C&I developers have moved beyond simply pitching customer savings, because the customer values a lot of things beyond dollars. He provided an example of solar projects for schools, and how if batteries were attached to those solar projects, then all those schools could also serve as shelters in case of emergency. In this case, yes, there are savings, but the resiliency benefit is also critical.

From your experience, do you find this is true, or is the priority still cost savings first?

Lidija Sekaric: First, assume that everybody wants to save money, and assume that you have to build a project where you will save them money. But in terms of other priorities, I think it really depends on the customer. You have to understand their priorities, and it’s best when you can address multiple motivators.

Richard Matsui: In the past 24 months, there has been a flurry of acquisitions in this C&I distributed energy space, including ENGIE buying Opterra and SoCore. If you fast-forward 10 years, what does this market look like? Does it end up being fairly fragmented or are there just a couple of large national players?

Lidija Sekaric: That’s a really good question. Is the market going to consolidate, with only one entity that is servicing everything from top to bottom, including a building’s service, power generation, trading into the wholesale market, and advice on energy purchasing? It would be like replacing your utility with another entity that is functionally equivalent to your utility, and then some. Of course, in some markets, the major difference is choice and competition. The switching costs to this model could be high in some cases, or low, with a number of innovations in financing these services, but if done right, the rewards should always be worth it.

The critical question here is: How are customers going to react? I think it will ultimately depend on how the customer feels about signing up with one entity for a long time. It’s still an evolving landscape.

Richard Matsui: Everyone’s favorite analogy in storage is, “Storage is where solar was ten years ago.” You’re uniquely positioned to be able to comment on both, having worked in solar then and storage now. From a technical standpoint, would you agree with that analogy?

Lidija Sekaric: It is not dissimilar. Because they are both materials-intensive industries, the learning curve should look about the same. In a sense, there is no actual scaling required in the way we think of physical scaling with a computer chip. Scaling with storage is just tied to volume, as manufacture of the materials scales.

Further, you can also consider the obstacles for solar that will be similar for storage. If you look at a breakdown of the costs, we have almost a mirror image of soft costs versus hard costs. They are basically the same, and I can’t say I am surprised.

To illustrate that, let’s look at large scale versus small scale storage. Small scale storage is still going to be very tough for all the reasons that small solar was difficult. From the different local rules for electricians, to system integration, to business overhead, to packaging, it is fundamentally harder on a small scale, when the market is still so small and every solution looks different. Small storage now is harder because it is not standardized at small scale. And non-standard solutions can be expensive, unless that is mitigated in the overall project.

In many ways, solar ten years ago and storage today are the same.


Richard Matsui: As Director of the US DOE SETO’s SunShot Initiative, you previously managed a portfolio of about $1B in project funding in solar R&D.

Having heard $1B worth of pitches, have you noticed trends or shared traits across successful teams?

Lidija Sekaric: Yes—it always came down to how well teams understood the market. From startups to university professors to national lab researchers, when teams possessed the instinct for keeping an eye on the market, they often came up with very relevant proposals. A team can understand the technology and have very smart people, but unless that team truly understands the market, their solution goes nowhere.

In addition, the ability to pivot was also important, because there’s always ways to improve the project.

Richard Matsui: Can you highlight a few projects that you feel really moved the needle for the industry?

Lidija Sekaric: There are several that come to mind and that I noticed in recent headlines. Aurora Solar was funded early on through a SETO program, and they are still out there and offering automated design.

And your team at kWh Analytics won an early SETO award. It was incredibly ambitious, what your team proposed to do all the way back in 2013, building the industry’s data repository. And now you created the Solar Revenue Put with all of that data. It is very significant.

Richard Matsui: Thanks, I really appreciate it.

Lidija Sekaric: We can’t take a hundred percent credit for everything you’ve done, but by association, we’ll say, “That’s in the family.”

Richard Matsui: Without the early support from your team we would not be where we are today. A lot of credit should go to SETO.


Richard Matsui: You’ve previously said that gender equity in solar is “more than a diversity imperative; it is a business as well as a moral imperative.” Can you elaborate?

Lidija Sekaric: From the standpoint of having managed and worked with people from a range of diverse backgrounds—cultural, educational, gender, orientation, and so forth—I have seen the business benefits to having a diverse team. I firmly believe that we bring our entire selves to work, and that where we come from shapes our unique perspectives on life. Having a diverse team means being able to turn a problem over and examine it from many different sides. Diversity is one of the most important things in tackling problems creatively. And creativity is incredibly important in solving problems. For example, when it comes to gender equity in particular, there are studies that show that companies that have women in leadership perform better than comparable companies without women in leadership. When finding the most efficient business practices, diversity needs to be prioritized.

The moral imperative comes into play for companies that have a social mission. Diversity and equality are smart and important ways of bettering society.

Richard Matsui: The Solar Foundation has helped provide important data about the people working in our industry. Their latest survey underscored that yes, progress has been made, but that women and people of color are still underrepresented in this industry. Have you seen examples of initiatives or individuals who are moving the needle on this issue?

Lidija Sekaric: For diversity and inclusion, awareness is a requisite for change. To start, the Solar Foundation provides a valuable service by allowing us all to speak from the same set of facts. For anyone who cares, learning the current realities is an important step towards then being able to ask, “What do we do about this?”

When it comes to initiatives that I see promoting economic equity, I would like to highlight an organization that was started by a former colleague of mine, Dan Conant. Dan founded Solar Holler, which is an enterprise with a solar and economic development initiative at the core.

Dan went back to West Virginia and said, “Look, coal is not going to be around for these people. What are we going to do for the people in the poorest places that we have in the country?” And so he started this program doing installations and providing trainings to develop the skills of West Virginians to develop solar.

This example is not specific to gender equity, but it is about economic equity and giving people opportunities to thrive. It takes exposure to know that an industry is thriving, and for people to think about moving in that direction.

On the gender equity issue, any conference organizer, or a committee organizer, who is thinking about the makeup of that group beyond their degrees and titles, is doing something significant—it is providing human visibility, and visibility begets diverse participation in return.

Highlights from the #Solar100 at SPI 2018

Originally posted on pv Magazine USA.

Through a featured list and monthly interviews, the #Solar100 celebrates our industry’s thought leaders and the ideas that drive them.

This year at Solar Power International, all attendees were invited to nominate who they wanted to see interviewed next for #Solar100. The #Solar100 Leaders nominated both “Next Interviews” as well as “Next Entrants.” Below are select highlights.

Stay tuned for additions to the #Solar100 and new interviews on pv Magazine USA.

Next Interview Nomination Highlights

  • “Emily Kirsch the Mother Theresa of Solar” by Kyle Cherrick
  • “Jamie Nolan the Olivia Pope of Solar” and “Meghan Nutting the Kamala Harris of Solar” by Jen Bristol
  • “Christian Roselund the Yosemite Sam of Solar Media” by John Weaver
  • “Billy Parish the Captain Cook of Solar Finance” by Deborah Knuckey
  • “Tom Weirich the Human in Action of Solar Finance” by Yoni Cohen
  • “Andrea Luecke the Einstein of Solar Jobs” by Meghan Nutting
  • “Stephen Lacey the Edward R. Murrow of Solar News” by Tor Valenza
  • “Yann Brandt the E-Newsletter of Solar” by Kendra Hubbard
  • “Tor the Solar Fred of Solar” by Eli Hinckley
  • “Tim Buchner the Bill Gates of Solar” by Tom Weirich
  • “Susanna Murley the Peggy Olson of Solar Creatives” by Jamie Nolan
  • “Lynn Jurich the Lynn Jurich of Solar”
  • “Adam Browning the Gandhi of Energy Equality”
  • “Tom Matzzie the Clean Choice of Solar”
  • “Elias Hinckley the Renaissance Man of Renewables”
  • “Julia Hamm the Warren Buffett of Solar”
  • “Lidija Sekaric the Visionary of Solar Deployment”

New Entrant Nomination Highlights

  • “Audrey Lee the Julia Morgan of Solar + Storage” by Anne Hoskins
  • “Rosalind Jackson the Heart + Soul of the Solar Movement,” “Jessica Scott the Champion of Nevada Solar,” and “Zadie Oleksiw the Solar Splainer of the Solar Movement” by Adam Browning
  • “Raffi Garabedian the Staying Power of Thin Film Solar” by Lidija Sekaric
  • “Mike Pound the Winston Churchhill of Solar” and “Mauricio Anno the Peter Sellers of Solar” by TJ Kanczuzewski
  • “Jared Johnson the Larry Bird of Financial Innovation” by Jason Kaminsky
  • “John Weaver The Tick of Solar” and “Gregor Macdonald the da Vinci of Clean Energy Writing” by Christian Roselund
  • “Stephen Trimble the Alaska Builder of Solar Growth” by Kelly Pickerel


#Solar100’s Anne Hoskins: The Adam Smith of Solar Policy

Originally posted on pv Magazine USA.

In this #Solar100 Interview, Richard Matsui, Founder and CEO of kWh Analytics, speaks with Anne Hoskins, Chief Policy Officer of Sunrun.

Anne Hoskins is best known for her work as an energy policy buff.

What people might not know is that she is an applied economist and lawyer by training (and holds degrees from Cornell, Princeton, and Harvard). Within her analytical economist track, Hoskins describes a rigorous quantitative course load that became foundational to her policy career.

Like Smith, Hoskins’ ideas shape policies. She thrives at the intersection of economics, policy, and energy, and now applies her analytical background to her work at Sunrun as their Chief Policy Officer.

In this interview, Hoskins talks about the frontier of home solar and batteries, whether utilities are “natural monopolies” for behind-the-meter storage, and the quantitative side of policy.


Richard Matsui:  How did your interest in economics start, and how did that result in a career in energy policy?

Anne Hoskins:   I studied applied economics as an undergrad at the College of Agriculture and Life Sciences at Cornell, which encompassed energy and other resource economics. I continued to focus on economics in graduate school at the Woodrow Wilson School at Princeton, including taking a course with professor Bobby Willig, who is renowned in antitrust and utility regulation circles. We studied economics related to monopolies and the regulation of them. Because of this, the economics I studied had practical applications in energy and utilities.

My formal introduction to energy began when I worked at the Energy Committee at the New York State Assembly. I supported the Chairman as he tackled the controversy around the closing of Shoreham nuclear power plant, as well as proposed incentives to support energy efficiency. It was a challenging area to apply analytical thinking and it’s pretty incredible that many of the same issues are being debated in state legislatures today.

Richard Matsui:  I went to Georgetown’s School of Foreign Service (SFS), and it had the nickname “Safe from Science.” There is an assumption that people in the policy world tend not have a quantitative background. Is that true from your experience? And how does your quantitative experience change the way that you view some of these policy issues?

Anne Hoskins:  People definitely look at us that way, but it’s so far from the truth! At the Woodrow Wilson School, there is an analytical economic track in which we took very serious quantitative economic courses. Many of my grad school colleagues pursued highly analytical positions, such as at the Office of Management and Budget, Congressional Budget Office, or economic consulting firms. I took a different path and became involved in policy roles right away; I went to a governor’s office, then to a policy shop, and then onto Harvard Law School. My economic and analytical background was invaluable as my career later expanded into working in the utility industry and as a public utility commissioner.  Today, my economics foundation is making me a stronger advocate for distributed solar and a more diversified electric grid. Having a handle on topics ranging from rate structures to the trade tariff case last year has given me insights to understand what is going to work for Sunrun’s consumers.



Richard Matsui:  Sunrun is obviously leading the charge when it comes to residential energy storage. I once met a policy person from Tesla, who noted that after the SolarCity merger, they suddenly had to contend with two—often competing—policy priorities. What is good for solar is not necessarily good for storage, and vice versa. How do you balance that dynamic as Chief Policy Officer for a company that sells both?

Anne Hoskins:  Well, first I challenge the premise. I don’t think they’re antithetical. We want to encourage customers to do both—to get solar and a battery, which they can use for backup and time-of-use management in a place like California. The technology allows customers to participate in the grid. We view the combination of solar and storage as maximizing the customer’s experience.  Simply speaking, solar and storage go hand-in-hand. 

Richard Matsui:  The specific observation that the person was making had to do with net metering, unsurprisingly. Could you comment on how the rise in behind-the-meter storage changes the debate, or shifts the evolution of net metering?

Anne Hoskins:  It’s pre-mature to shift away from net metering. It provides a simple construct for supporting customer adoption of solar, which is foundational for storage.  In California where solar penetration has reached higher levels than in most states, NEM has been adapted to incorporate time-of-use rates, which encourages customers to shift their consumption and adopt batteries. Net metering rules can be adapted to support storage where appropriate by incorporating time-of-use rates. Society benefits through cleaner, reliable energy, along with job creation when a customer makes an investment in solar. The best way to encourage that is to have a simple system, one in which customers are going to understand what they’re paying for and what they’re receiving for the power they share with their neighbors.

Richard Matsui:  When Sunrun installs and owns the battery, who’s the primary customer? Is it the homeowner or the utility? I read about how Sunrun is going to be delivering grid services, but my presumption is that it’s still the homeowner who needs to sign on the dotted line of the Sunrun lease contract. So the homeowners still needs to see some kind of value proposition from storage.

Anne Hoskins:  Yes, the primary customer is the homeowner. Depending on where the homeowner lives, the reason that (s)he wants a battery is going to vary. If you’re in California with time-of-use rates, then we would expect one of the top benefits would be time-of-use management. In New Jersey, where they don’t have time-of-use rates, folks are interested in having backup for storms. In that situation, they may have five terrible storms and outages, but there are many other times when that battery is not fully utilized. In that case, if we have a thousand customers in a region, we can aggregate energy and capacity from those batteries and provide grid services for both the distribution system and wholesale markets. We see a future that involves pooling resources from batteries, providing a benefit to the host customer, sharing that benefit with the grid, and providing an overall societal benefit.

At the end of the day, the utility and the homeowner both benefit from distributed solar plus battery systems.  The benefits of “value stacking” are not mutually exclusive for homeowners or their local utility.

Richard Matsui: Your example was helpful to understanding this vision. Returning to that scenario where a storm passes through New Jersey and causes a grid outage for a Sunrun customer who has solar plus storage. The homeowner naturally wants to rely on the battery to provide backup power. This presumably could coincide with the societal need for that battery to instead feed that power back into the grid. Does that pose any conflict?

Anne Hoskins: No, it won’t. There will always be a certain amount of power that’s saved in the battery to meet customer needs. When you have thousands of customers, one customer may need the backup, but the one three blocks away may not, because outages are often localized. For the most part, as you get more of these systems, optionality increases. We’re optimistic that this combination of distributed and centralized systems is going to be the best solution, especially compared to relying on one centralized battery, where when that battery or connected transmission line goes down you lose the whole system.



Richard Matsui:  There’s been a marked increase in awareness of how valuable behind-the-meter distributed storage can be from a societal standpoint. A while back, someone from a utility told me, “If energy storage behind-the-meter really does pick up, we are the natural owners because we know where the congestion is and we’re the trusted providers.” Are utilities the natural owners of behind-the-meter storage?

Anne Hoskins:  We don’t think that’s the case. Utilities have a lot of expertise in managing the grid, but they have no reason to go into a customer’s home on the other side of the meter. If you look at storage, all it really takes is for the utility to send a signal when they need access to the resource, which they can do. For example, PJM sends signals to energy generators without PJM owning or controlling the generation. Sunrun’s responsibility would be to manage its customers’ storage units and a system that responds to utility or RTO/ISO signals. This is not all that complicated.

The other point here is that utilities are monopolies—but there is no natural monopoly for behind the meter solar and storage. Competitive companies are ready and willing to provide these services. Utilities are given exclusive franchises to own and operate the distribution grid, which gives them greater market power and requires regulators to safeguard consumer welfare. When there is no natural monopoly, as is demonstrably true with storage and distributed solar, there is no justification for enabling increased market power. The best way to maximize consumer welfare is to facilitate—and certainly not undermine—competitive markets. We know that there’s a competitive market for distributed solar and storage, with new companies emerging to offer these services to customers.

Utilities will say, “Well, both can do it—we can own some and you can own some.” We will look at all options, and we know that some commissions may want to explore this. The challenge is that utilities are able to spread the risk of their investments across ratepayers and also are advantaged by access to customer data and all customers. They bear much less risk if technology, costs, or consumer demand changes. How can competitive providers compete with that? One option is for utilities to offer behind the meter services through competitive affiliates. If utility or their affiliates are allowed to offer service in a competitive market there would need to be stronger regulatory oversight of interconnection and data sharing.

Competition drives cost reduction and innovation. That’s what’s going to get us to the next technical innovation. At Sunrun, we have a strong incentive to ask and solve these questions and improve our quality and service in order to compete. I spent seven years at a utility and three as a regulator. Cost of service regulation just doesn’t give utilities the same incentives to reduce cost and try new approaches to problems. In contrast, companies that bear financial risk have incredible motivation to continually improve the product and service in order to stay in business and grow.

Richard Matsui:  This discussion reminds me of 2009, when Southern California Edison announced a behind-the-meter solar program for 500 MW. At the time, this was a massive program for solar, and especially C&I rooftop solar. SCE carved out a program that was half rate-based and the other half was not. The hotly debated question was, “Why should half of this be rate-based? Is there really a market failure where the private sector is unable to fulfill that role?” One could argue that utility ownership was necessary because solar technology and capital formation was less mature, at that point in time. Fast-forward 10 years, it’s evident that the argument has been decisively settled in favor of letting market force dictate where, when, and at what cost behind-the-meter solar systems get built. It strikes me that this conversation will likely be re-litigated in energy storage.

Anne Hoskins: I’m happy to see the utilities are embracing a role for distributed resources, but I’d like to see them embrace it more across the board. We spend too much time fighting over rate design, demand charges, and initiatives that appear to be intended to reduce the ability for customers to invest in solar.

My concern as a former regulator is that utilities are viewing storage as another way to rate-base capital expenditures. Utilities see that demand is falling for electricity, which leaves them unsettled, because we have an antiquated system for how we allow utilities to recover their expenses and earn returns on their investments. Utilities are investor-owned, so when they see customer interest in storage, they think, “We can grow by extending our network to behind-the-meter.” But why would we put a monopoly in charge of something when it is not necessary? I think this points to the need for regulators to start looking at performance-based regulation. Your home state of Hawaii just passed legislation on this. We need to encourage utilities by giving them incentives to reduce their costs and be more responsive to consumers, as opposed to allowing them to grow through capital investment.

A few years ago, Georgia Power was given the authority to do rooftop solar, and they only signed up a handful of customers. It just isn’t in their wheelhouse. Having spent time at a utility, I know that their strength is in engineering and keeping the system running. Utilities have done that for over 100 years. But most continue to think of residents as captive “ratepayers”—not as customers who they need to find and win over with competitive service offerings.

Richard Matsui:  That’s an important and powerful point. I’m glad that you are able to bring your experience as a former regulator to this conversation.



Richard Matsui:  I think it’s widely acknowledged that behind-the-meter energy storage is in its early days. What are the important steps for energy storage to become a mature service that mainstream investors can get comfortable with?

Anne Hoskins:  Well, we know that home battery costs are expected to decline significantly over the next 5 years, by approximately 50%-60%. As costs decline, we’ll see greater market penetration.

We’ve been thrilled with how many customers have adopted batteries already. More than 20% of Sunrun’s solar customers in California are adding a home battery to their system, with up to 60% adoption in some markets. The energy storage industry benefits from manufacturing synergies with electric vehicles, and that’s helping us achieve scale and reduce battery costs.

Richard Matsui:  That’s stunning.

Anne Hoskins:  This is partly driven by offering the customer multiple benefits, such as time-of-use management as well as backup power. With the issues in California with fires last year, we see a lot of customers with reliability concerns. When you put all those things together, you can understand why there’s strong demand.

Additionally, when a few people in a neighborhood get solar panels, those early adopters have a domino effect on their neighbors. I think the same thing is going happen with batteries as people realize they can gain energy independence.

Richard Matsui:  For us at kWh Analytics, our lens into the solar market is through its performance data. We aggregate data on ~20% of the US operating fleet, and we use this data to help investors and insurers of quantify the risk and get them comfortable with deploying more dollars into solar. But it’s much more complicated to quantify the long-term investment performance of storage, because of the policy risk. We look forward to continue working with Sunrun and others to build greater investor comfort with this new asset class, because it’s clear that there will be no shortage of interesting challenges to overcome.

Anne Hoskins: Storage will run into many of the same challenges as solar did and many of the answers have already been battle-tested. We’re also seeing forward-looking states recognize the value of storage. Hawaii, California, and New York all have adopted distributed storage policies and incentives, with New York recently issuing a storage roadmap that includes distributed solar and storage. As more policymakers start recognizing the need and opportunity to optimize the use of solar, either for reliability or clean energy purposes, they will create related incentives. It makes a lot of sense to target incentives to nascent technology at the point when customers are on the cusp of adopting the technology, and I think we’ve seen that there’s enough interest in storage to drive these incentives.



Richard Matsui: You recently had a big policy win in Florida. What’s the takeaway for this industry when it comes to opening markets that have been more resistant to rooftop solar?

Anne Hoskins:  I think we achieved that incredible result in Florida because it simply made sense for consumers. We knew from their ballot initiative fight a year and a half earlier that consumers felt strongly about gaining access to solar, especially in Florida, a state that is known for its sun.

As we work with policymakers in places where there should be greater access to solar, we try to keep the focus on the consumer. People want solar, and we have many success stories where we have benefitted not only the direct customer, but also the state as a whole. For example, California is now able to forego natural gas plants and transmission projects because of distributed solar.

My approach is to help policymakers see that not only is there consumer demand for it, but it’s also an avenue for solving larger problems in a cost-effective way. In Florida, we demonstrated to the commission that equipment leasing was perfectly appropriate under their law. When they realized we were focused on serving the needs of Florida customers, they approved it.

#Solar100’s Bryan Birsic: The Tony Stark of C&I Solar

Originally posted on pv Magazine USA.

In this #Solar100 Interview, Richard Matsui, Founder and CEO of kWh Analytics, speaks with Bryan Birsic, Co-founder and CEO of Wunder Capital.

While Bryan Birsic probably doesn’t self-identify as a “genius-billionaire-philanthropist-superhero,” elements of his story mirror that of Marvel’s business magnate Tony Stark.

Leveraging their tech expertise and respective skillsets, Stark and Birsic both changed their careers to respond to important needs they saw in the world around them. For Stark, this means using tech and physics to stop villains, and for Birsic, this means using tech and finance to combat climate change while making returns for his investors. Birsic began his current business after a realization that his previous work wasn’t “addressing the big challenges that humanity faces.” Birsic’s archenemy? Barriers to solar deployment in the C&I lending space. Birsic’s work is resonating with people, and his company recently raised $112MM towards this effort.

In this interview, Birsic discusses finding purpose in solar finance, cracking the C&I market, and the wrong approach for solar startups to take.

Finding Purpose in Solar Finance

Richard Matsui: You first established your career at Bain, then spent 5 years as a VC with Village Ventures. How did you get into solar?

Bryan Birsic: It started when my cofounders Dave, Sam, and I hit a point in our careers where we no longer felt comfortable pursuing tech start-ups that weren’t addressing the big challenges that humanity faces. We wanted to move past only having nights and weekends to pursue our real passions and fulfill what we defined as our purpose. I think this is a common framework for millennials: Looking for jobs that utilize their skillsets and provide good compensation, yes, but also looking to find purpose in their work that extends beyond the requisite financial incentive.

I joke about this, but it’s true: Dave, Sam, and I were basically having a bitch session about how difficult it is to motivate yourself and others to work at the kinds of start-ups where we previously worked. That conversation prompted the questions: What do we care about? What would feel better to work on? And really importantly, are we the right people to do those things?

We convened in Boulder to figure out how we might manifest those ideas into a company. Dave, our CTO who worked at the DOE’s Lawrence Berkeley National Laboratory, came in with this religious fervor about what was happening in the energy space, particularly with distributed solar. He won the day. We saw that there was an under-penetration of software entrepreneurs in solar, and particularly that financing seemed to be an acute problem. On the C&I side, we saw a really big opportunity to grow the solar space with improved financing. All three of us were coming from very different roles—how software applies to finance, advertising, and marketing tech—but those winnowing forces brought us to start something in commercial solar finance.

Founding a Solar Startup

Richard Matsui: You’re a fellow ex-management consultant. Did your management consulting work influence what you bring to the Founder and CEO role today? More broadly, what would you say are the pros and cons of your job as Founder and CEO?

Bryan Birsic: My favorite CEOs are passionate about things like how to structure a company, how to create feedback loops, how to experiment, and how to deliberately create strong cultures and operating principles. The skill of being able to learn quickly, implement that knowledge, and repeat is a virtuous cycle that carried over from the management consulting role to the Founder and CEO role. This is also one of the biggest pros of my current job.

Richard Matsui: That’s interesting. The biggest lesson I learned from my stint in management consulting is that there are very few truly novel problems in the world. The vast majority of problems that any company faces has already been solved before by someone, somewhere. As a consultant, your job is to find that person, learn the answer, tailor the answer to the unique circumstance, and then execute. So it’s a very similar framework to your “virtuous cycle”.

Bryan Birsic: Exactly. And on the con side, it can be very lonely work. You don’t often have the opportunity to share fears or vulnerabilities, at least not in a “I’m having a terrible day” way. You certainly talk about challenging things with your team, but there has to be some “presentation layer” on top of your day-to-day feelings, and that dynamic obviously applies to your investors as well. Even with someone like a spouse, who has some financial connection to what you’re doing, it’s hard to be a 100% vulnerable and honest. That is compounded by the fact that there aren’t a lot of people who can empathize with some of the pressures, demands, and fears incumbent with being a CEO. One thing that I do that I recommend that every CEO do is find a group of CEOs who are all interested in being authentic. Without that resource, the CEO dynamic can be difficult to handle.

Richard Matsui: How does your experience as a VC change that way that you’ve built this business?

Bryan Birsic: Time in VC provided two advantages: The first and obvious one is fundraising, and the second is the focus on the scalability of our software. Non-software teams tend to suffer from diseconomies of scale when they get to a certain size. Our team build and brand positioning as a software-first company stems from my understanding of what my VC audience is looking for. To be really specific, we actively work against the idea that we’re a solar company, because that industry is painted with a slow-to-develop, hard-to-scale brush.

Cracking the C&I Market

Richard Matsui: When I think about Wunder, what strikes me is the difficulty of the problem you are tackling. C&I has been a “next big opportunity” for a long time, despite a lot of smart people working on it. What makes the market so challenging?

Bryan Birsic: I think the reason that there aren’t five Wunders running around is because this work requires a particular knowledge set that doesn’t often come together organically. There are a lot of people who understand this problem space, see the opportunity, and understand that software is required to reduce the fixed and bespoke costs associated with cracking this sub-$2mm, sub-1MW market in commercial solar. However, the folks who have that solar background and see that opportunity tend to be people without technology experience.

Generate, Sol Systems, and Seminole—all firms that I really like and respect—are not software companies, and they all struggle with lending to projects below 1 MW because they have not been able to combine their deep understanding of the problem space with the tools of a software company.

We took a very different approach. I had some knowledge of how software applied to lending, and Dave had experience as an engineer and spent some time at the DOE. We are software people first who only had a few relevant solar experiences. We had to spend two years getting up the curve on some pretty complex topics to gain solar expertise. This approach led us to a different place then a lot of other people who have been in the market for years.

Richard Matsui: There’s a saying that all founders know a secret about the industry they work in, and that secret becomes their company. It sounds like your company’s founding secret was  this software-first mentality. What are the big C&I problems that software solves?

Bryan Birsic: While we use software in many ways, we have identified two main problem areas that software can address.

As outsiders coming in trying to figure out this market, the first thing that struck us was just how much paper and legal work is required in order to get a C&I solar deal done. You oftentimes have three- or four- party contracts, lien or UCC1 filings, regulatory dynamics in different states depending on the size of system, and so on. We mapped out and color-coded all the required steps and realized that around 50-60% of the steps were fundamentally contractual, legal, or involved something regulatory. If you’re an project finance provider in a market where your loan might be a million dollars, and you might make 2.5% as your total closing fees on that loan, that means you have $25,000 to spend, including your margin and fixed expenses, in order to be profitable. If you’re engaging a lawyer or putting contracts together, you’re going to eat most of that $25,000 budget immediately on legal costs. We needed to eliminate the legal-cost table stakes.

So the first thing we built is Docsund, intelligent software that—with five clicks—drafts a custom contract package for each of our deals. Once we encode changes, this system requires no legal costs and no human being to create custom contracts. That is the most important thing we’ve done, and it’s necessary to attack this market.

The second big efficiency that we’ve realized is executing deals quickly. We built Koalify, the second leg of our software stack, to qualify our deals. We’re seeing about two billion dollars of buyer demand annually now, with projects that average roughly half a million dollars each. For each project, we need to first gather the data that requires minimal human interaction, and focus on data that is most likely to kill a deal.

Those are our two big cornerstones. Between those two software products, we’ve been able to realize about a 10X efficiency relative to what we see from manual financing players in the C&I market, taking our minimum project size to $200K from the industry-norm of ~$2MM.

Lending Small and Moving Fast

Richard Matsui: On the borrowers’ side, what is the typical project size that you lend against?

Bryan Birsic: Our average is around $500k or $600k in terms of their debt need, which corresponds to a 200-300 KW system.

Richard Matsui: That’s incredibly small. Late last year I asked Jigar what he was bullish on, and he identified small C&I, saying, “For whatever reason, the investors have all said, ‘We only want to do deals that are 750 kW and up,’ which I think is huge mistake.”

Bryan Birsic: That’s 100% right. We see the rest of the market as willing to go down to 750 KW, about $2mm, and we just don’t see folks that are down market of that besides us.

Richard Matsui: What do your borrowers want?

Bryan Birsic: We have two value props. The first one is that we understand the solar asset well enough that we’re not going to ask for additional assets from the borrower. What you often see in the small C&I space is that a developer gets a potential borrower excited, they quote the system, but they don’t have a solar specific financing offer for these smaller systems, so they send them to their local bank or credit union. That underwriting team does not have a group specialized in solar, so they’re looking at just the financial history of the business, and will require collateral, for example by putting a senior lien on borrower property.  By contrast, we offer non-recourse debt, so even if our rate is incrementally higher, in almost all cases we’ll win that business because we only have recourse to the solar asset. We can do that because we’re underwriting a wide range of aspects of that solar project’s ongoing value, and are capable of monetizing it effectively if God forbid there’s a default.

Next, our partners would tell you that speed and transparency are the two things they value most in Wunder. Installers and developers generally understand that financing sometimes doesn’t come through, so generally what they like is that we’ll tell them within a couple of days if a project is not going to be approved so that they can stop working on it and reorganize their sales efforts. We’ll also let them know why they were rejected, which can often be a black box with other lenders. Then on the speed side, we’ll promise them an executable document within five business days. That is an order of magnitude faster than some of the folks they’re used to dealing with.

Richard Matsui: From our experience developing the Solar Revenue Put, we have gained some insight into what small scale project developers value most. It turns out that certainty and speed are very important factors because the developer is likely working on multiple projects at a time. Upfront cash is also critical to borrowers in the C&I segment, because they need this capital to develop more projects and run their business.

Bryan Birsic: Absolutely. To your point, we did not realize how important speed would be in that smaller C&I segment. These guys are often trying to fill 10 or 15 projects through their quarter, and financing has really been slowing them down. And to your point about cash, I can say explicitly that with your Solar Revenue Put, which I like, we change our loan-to-value rate that we offer on a solar project.

The Wrong Approach for Solar Startups to Take

Richard Matsui: What does Wunder become in five years? Is it a building improvement lender like a GreenSky for C&I? Or does it become something else?

Bryan Birsic: I love that analogy, given GreenSky’s recent valuation. I think we’ve addressed about half of the solution to date. If you look at GreenSky or Dealertrack, they’ve succeeded in overcoming the primary challenge in technology-enabled lending, borrower acquisition costs. They’re not only a great financing option for their partners, but they also bring their partners borrower demand for free, they pull financing into the sales funnel, they help their partners target customers based on the likelihood to get financing, and help onboard new customers through the relatively complex financing process. Mosaic’s also done some really interesting work along these lines in residential solar.

We need to make sure that we’re not only your financing partner, we are also your partner in cracking small commercial solar through the sales funnel. That’s the next big thing for us operationally. The other big shoe to drop is going to be storage. We believe that distributed PV plus storage is going to be a big market and so between those two challenges, we’ll stay pretty busy for the next five years.

Richard Matsui: What else is broken or inefficient in solar? Put another way, had you not started Wunder and were looking at the landscape today, what would you want to tackle?

Bryan Birsic: I think pure customer acquisition is really interesting. We see a lot of folks that are trying to generate leads and then kick them over the transom. Part of the reason that we didn’t start there is because if I send you a lead for a $500k system that you can’t get financing for, solar developers probably won’t even want the lead. We had to start with financing before folks would be interested in solving that customer acquisition problem. The really hard thing is getting a business efficiently through the landlord tenant dynamic. How do you solve that? We see a big opportunity there.

There’s a real misunderstanding of how to apply software to solve the industry’s problem of soft costs. By the way, I think your team at kWh Analytics is doing it right. There’s a broad and mistaken belief from many solar startups that are thinking like traditional software companies: We’re going to sell software licenses to installers. That simply does not solve what customers are looking for. Installers and developers are not people who want to be on their computer all day. If you’re building them software, you have to consider where they are, not where you think the market should be. If I were to go to the bank and say, “Hey, I’m going to sell you software for small C&I,” they would respond, “We don’t do small C&I.” Software is necessary to bring down soft costs, though I think the big opportunity is in software-enabled services. Don’t show up with the software—use your own software to deliver the value to customers. And that will probably be a better business model and an easier sale, too. I’m highly skeptical of folks that are selling software under a SaaS model, as opposed to using software inside of their businesses to be incredibly efficient or building a differentiated data asset like your team. I think most folks are taking the wrong approach there.

Richard Matsui: That’s an often unsaid but brutal truth about our industry. Even though we offer different products, I think that our teams are practicing a similar mentality. If a solar startup thinks of itself as pure-play software, an honest assessment of the total addressable market will usually be small. And small can be great, because small means lean, which can mean profitable. Folsom Labs is a standout example of this. But if a startup is seeking venture-type results, software-only is a challenging path. Those founders need to answer the big picture question: What is the real pain point here? What is our industry fundamentally doing wrong? Software can play a role in that answer, but software alone is often not the full answer.