Service model approach will help renewable cos. grow

POWER UP: Jigar Shah said that even with the solar industry exceeding $100 billion globally, “it has a lot farther to go.” / COURTESY JIGAR SHAH CONSULTING
POWER UP: Jigar Shah said that even with the solar industry exceeding $100 billion globally, “it has a lot farther to go.” / COURTESY JIGAR SHAH CONSULTING

If renewable energy has become a religion for some, Jigar Shah has been preaching its gospel from the very beginning. His fascination with solar power started in grade school. After college the Illinois native worked at a host of solar companies through the 1990s, when the business prospects for green energy were tenuous.
In September 2003, Shah struck out on his own and founded SunEdison around the idea of selling solar power as a service instead of capital equipment. Whole Foods Market in Providence was one of two original SunEdison commercial customers to take advantage of “no money-down solar,” the business model that would go on to make SunEdison the world’s largest solar-services provider.
Now the owner of a renewable energy consulting company after selling SunEdison in 2009, Shah visited Rhode Island in December to discuss the future of renewable energy at the Northeast Sustainable Energy Association’s monthly event in Providence.
He recently spoke about solar power and his new book, “Climate Wealth,” which argues that capital markets and entrepreneurs are poised to unlock an environmental revolution.

PBN: What is SunEdison’s connection to Rhode Island?
SHAH: Whole Foods signed two contracts with us, one for Providence and one for Edgewater, N.J. So you were one of our first two projects.

PBN: What did SunEdison pioneer that wasn’t available before?
SHAH: We invented no-money-down solar. The vast majority of people in the marketplace who wanted to put solar on their roof never wanted to use their own capital – there was always something more important for them to spend that money on. We invented this concept of no-money-down solar.

PBN: Essentially offering solar as a service? SHAH: Yes. We provided energy services, not just the electrons, also demand savings. But the utility was always interconnected with us. We were supplementing their power, not replacing the utility.

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PBN: What renewable technologies are you most excited about?
SHAH: I am still very excited about solar. Solar has just exceeded $100 billion globally, which is amazing, but it has a lot farther to go. It is still not ubiquitous on everybody’s roof. So I think you will continue to see solar grow. … There are a lot of folks with established technologies that can follow in solar’s footsteps, like solar hot water, small-scale hydro, small biomass, anaerobic digestion, combined heat and power.

PBN: So is it going to be more of these renewable energy companies and these different technologies going to more of a service model that you see allowing them to gain financing and take off?
SHAH: Yeah, I call it infrastructure as a service. Over the last 50 years, the government has left these types of decisions to special-purpose entities to make decisions, like electric utilities or water authorities. It is no longer the venue of the state legislature, of the governor or president making these decisions, it is generally some other group. And that group rarely has an incentive to do things different from how they are doing them today. These infrastructure-as-a-service plays are ways to get around these groups instead of having to go through them.

PBN: In some of these cases is it going to mean pushing some of these incumbent utilities out of the way?
SHAH: I choose not to look at it that way. These utilities were entrusted with a monopoly to provide the public with essential services and those services are going to be needed going into the future. So if those utilities don’t provide as much generation because we are making locally generated power, they will still provide other services like load balancing. If you look at the mobile-phone industry there’s what you see, but there still are companies who own the backbone fiber and keep things running on schedule.

PBN: What are you working on currently?
SHAH: There are a number of technologies that are well-proven and underappreciated in the marketplace and figuring out how to finance them is the key to bringing them to market, because consumers just don’t want to pay cash upfront. You see that even with a Rhode Island company like eNow, which has tested their units with three busses for the state of Rhode Island, which has 384 additional busses that need the technology, but they are trying to figure out how to space out their purchases because they don’t have the budget upfront to pay for it, even though the technology pays for itself.

PBN: Are you encouraged with where we are in reducing our carbon footprint?
SHAH: It is important to note we are on track to reach the climate goals President [Barack] Obama set out … in 2009. The reason we are on track is how much renewable energy is being installed, as well as energy efficiency through building codes and standards. There are a lot of people who want to attribute our success to natural gas, but the data shows it is not natural gas that is saving us carbon emissions, it is the amazing success of renewable energy and energy efficiency. That is going to keep happening. The pace is much slower than I would like to see, but I am a clean-tech entrepreneur. •

INTERVIEW
Jigar Shah
POSITION: CEO of Jigar Shah Consulting
BACKGROUND: Shah grew up in rural Illinois and became interested in solar power in high school. He studied engineering in college before working for a string of solar companies in the industry’s early days and then founding SunEdison, a pioneer in selling solar as a service.
EDUCATION: Bachelor’s in mechanical engineering from the University of Illinois, 1996; MBA from the University of Maryland, 2000
FIRST JOB: Playing tuba in municipal band
RESIDENCE: New York City
AGE: 39

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