By Dave Kirkpatrick, Managing Director at SJF Ventures
Last week, I visited Dan Shugar, CEO of NEXTracker, a global leader in tracking systems for solar power plants. NEXTracker, which operates the 70MW Javiera Solar project in Chile, is one of the emerging leaders in the cleantech energy revolution now under way.
Dan and his team grew the company faster than any I’ve seen over the past 15 years. Then he consummated this success with a $330 million sale to Flex last month. Dan will be leading NEXTracker within Flex to continue to drive down the cost of solar globally. Dan and NEXTracker investors are donating to a 100% clean energy initiative at the Sierra Club to continue to support the rapid transition away from fossil fuels. This isn’t the first time Dan has been so generous and thoughtful. Earlier, he helped kickstart the Beyond Coal initiative after selling Powerlight to Sunpower.
An Aspirational Goal
In thinking about Dan, it occurred to me that just as ‘zero waste’ was an aspirational goal mobilizing many companies over the last two decades, so too, will this new goal of 100% clean energy in the next two decades.
The world will be a much better place if we achieve that goal. We’ll benefit from great jobs, community revitalization, energy independence, and carbon reduction driven by this next wave of cleantech companies. It will be nice to again prove the naysayers wrong about the promise of sustainability.
Back in the mid-1990s, several recycling advocates, including myself, began promoting the goal of zero waste. We were frustrated by the incremental efforts at 10% or 20% recycling and wanted to focus individuals, cities, and companies on a more aspirational and ultimately attainable goal. We drew attention to broad source reduction, reuse, composting and advanced recycling.
At the time, the concept was derided by many in the waste management industry as unrealistic. Yet over time, it gained acceptance and now many cities and corporations have set zero waste as their goal. Cities that now have zero waste goals include Seattle, San Francisco, Los Angeles, San Diego, Dallas, Minneapolis and New York.
Many corporations have also set their sights on zero waste as a paradigm shift for their business culture. The reason is simple. A goal of zero waste drives innovation, reduces expenses, builds more efficient operations and inspires employees and customers. Several operations or factories have effectively achieved ‘landfill free’ zero waste, including Proctor & Gamble, Subaru, Ford, Sunpower, Cargill, Unilever, Miller Coors, and Eaton.
These companies and a handful of others are helping their customers profitably reuse and recycle returned or damaged retail goods, mobile phones, utility equipment, organic material, biotech equipment, vehicles, municipal discards, e-waste, scrap lumber, and plastics. We continue to look for the next wave of great entrepreneurs who can find wasteful sectors of our economy where they can capture value and transform material and product flows.
100% Clean Energy
We should apply the same spirit that led to the zero waste goal in recycling, reuse and asset recovery in creating a goal of 100% clean energy in corporate America.
We’re optimistic we can achieve this thanks to a whole new set of energy entrepreneurs. NEXTracker, groSolar and Community Energy are all driving rapid adoption of low cost solar energy. EnTouch Controls, Ayla Networks, FieldView Solutions, RealWinWin, and B.B. Hobbs are enabling greater energy and water efficiency at restaurant and retail chains, appliance manufacturers, data centers, large commercial buildings, and farms.
The costs of solar and wind power, as well as energy efficiency, are declining rapidly. New energy sources to the grid are often from 100% renewable sources. They often displace retiring coal plants.
Energy storage costs are also declining rapidly. Tesla’s new Gigafactory is making news with its Powerwall solution, and many other companies are also driving lower costs. As business and utility models innovate to capture more of the diverse values of energy storage on the grid, this sector is likely to scale and benefit from the same low-cost, wide-adoption as wind and solar.
A New Day
The advent of low-cost storage, along with electric vehicles, creates the potential for individuals, companies and eventually communities and countries to move to 100% clean energy. Indeed, the RE100 is a global coalition of companies committed to going to 100% renewable energy including IKEA, Swiss Re, Goldman Sachs, SAP, Starbucks, Johnson & Johnson, UBS and Walmart.
Advocacy groups such as the Solutions Project have developed research on how states can cost effectively achieve 100% renewable energy. And the Sierra Club is advancing its successful Beyond Coal initiative to a 100% Clean Energy Project. Most 100% plans include not only solar and wind, but also efficiency, storage and intelligent grids, along with hydro, geothermal and tidal power.
Like “zero waste”, families and companies are effectively going 100% clean energy through onsite solar, green power purchases, efficiency and energy storage. Cities are adopting the goal as well, including Vancouver, Ithaca, Aspen, and Greensburg, KS. Costa Rica has a target to be 100% carbon neutral by 2020. Interestingly, 83% of Americans say they support an ambitious 100% clean energy goal in a national online poll recently conducted by Global Strategy Group on behalf of the Sierra Club and HereNow.
Not surprisingly, the fossil fuel industry is fighting renewables and a 100% clean energy vision, just like the waste management industry did the recycling movement. However, more and more investors and institutions are seeking to distance themselves from fossil fuels and their risks of stranded assets through strategic divestment.
The Bottom Line
We will continue to hear from skeptics that say we need an all-of-the-above solution for energy, just like we still ‘need’ landfills for waste. That’s like saying we need some toxins in our diet and we shouldn’t strive to be 100% healthy because it is just too hard, costly or troublesome. However, as the cost of renewables and storage continues to drop and efficiency increases, we no longer have to be distracted by that false dichotomy.
As I rolled out my recycling and trash carts this week, the recycling one was filled to the brim, my compost pile is full, and my garbage cart had one small bag in it. With the 6 KW solar PV array on my roof, we are generating all the power we need in our house on a net basis. I bike to work most days and my firm buys carbon offsets for all of our air travel. It is a lot more fun for us all to work on getting to 100% clean energy and 0% waste in our lives, companies and communities.
Dave Kirkpatrick is Managing Director at SJF Ventures.