We would like to share these Independence Day reflections from one of our valued customers and company friends, Jigar Shah, president of Generate Capital.

 

I am a naturalized citizen, having been born in India and coming to the USA when I was very young.  I grew up in a small town in Illinois and remember how important Independence Day was for all of us.  Illegal fireworks were just a State line away! This year is a very special one for me as it is the year that our industry can officially declare victory — our Energy Independence Day.

Over the past twenty years, we have gone from praising King Coal to reaching peak coal and seeing its inevitable decline.  Now we look forward, with some with anticipation, to a world in which renewable energy and resource efficiency is the most cost-effective pathway.  Some might even say the preferred pathway.  Just recently Bloomberg New Energy Finance, the International Energy Agency, and Lazard announced that clean energy would be lowest cost pathway for India,China, and even Saudi Arabia to meet their energy needs.

Thankfully, the last twenty years has featured extraordinary investments in R&D which are now ready to be deployed at scale.  Virtually every carmaker in the world is now working on not just one or two token electric concept cars, but scores of current and soon-to-appear production models, from 48V start-stop light hybrids to fully electric with ranges now more than 200 miles per charge.  In fact, Elon Musk just announced that his affordable Model 3 will start rolling off the assembly line this week. The resulting scale up has cost of lithium batteries plummeting, while their capacity has increased.

Equally important, states across the country are starting to realize the rising cost of food waste is actually an opportunity, not a problem to be buried under the ground.  Every year in the U.S., 133 billion pounds of food waste are sent to landfills.  If used for biogas production, at 4,200 cubic feet per ton, this same amount of waste could power almost the entire agricultural sector – about 9% of total US Electricity usage.  More importantly, biogas can be stored in a gas form until needed so it can complement intermittent energy sources like solar and wind power.  Anaerobic Digesters are taking off in California, North Carolina, New York, Michigan, the Northeast, and in many other places around the country.

This is the age of the shared economy, or what Rachel Botsman calls Collaborative Consumption: where owning stuff isn’t as important as experiencing life. What we started at SunEdison was the solar-as-a-service model.  Today, Generate Capital is transforming that into infrastructure-as-a-servicetm.  Who wants to own equipment when all you really want is a service that is optimized for efficiency and affordability – whether it is solar, anaerobic digesters, fuel cells, energy efficiency, local food production, or electric vehicles.

But while all this momentum is exciting and encouraging, we are going to have a bumpy road getting from here to there.  In Washington DC, the coal industry is showing what it looks like to be powerful but dying.  My guess is that with all of the money they will throw around, they will find that there will be a lot of friends attending their parties while not-so-secretly shorting their stock.

It is increasingly clear that the incremental wealth created over the last twenty years of my life has mostly gone to the 1%.  I am proud that the renewable energy and resource efficiency industries have been far more equitable.  The average CEO salaries are only about 5X the average worker’s salary – same ratio as it was in the 1970s.  Now as our industry continues to grow we have to realize that innovation comes from our extraordinary employees.  When we forget that we will experience the same lack of innovation that led to the downfall of the coal industry – and soon the oil and electric utility industries.

Some things that make me most optimistic for 2017 are:

1) On a personal note, there are five members of Congress of Indian heritage.

2) After counting plant retirements, almost 100% of the 26,000 MWs added to the grid were clean last year.

3) Countries around the world are bragging about their climate goals, most recently India with a 57% clean electricity expectation by 2027.

4) Clean energy became the number one creator of blue collar jobs in the United States since the 2008 great recession, 1 in 30 jobs in Solar, Wind, LED Lighting, and EVs.

5) My book, Creating Climate Wealth, has become the go to handbook for people trying to make the transition from talking to activists to talking to capitalists.

6)     7,400 cities have signed a pledge worldwide to deploy climate solutions at scale.  This includes solar, LED lights, electric vehicles, energy efficiency, anaerobic digesters, big data, and many other existing technologies that are critical to getting to 90% less carbon.

 

Perfect timing for Generate Capital to be the go to finance partner for the Resource Revolution.

Thanks for all of your support!

Jigar