The Secret to Solar Power
The future of solar belongs to whoever can make you forget upfront investments that only tree-hugging rich people can afford.
By JEFF HIMMELMAN
Excerpt from article:
Most mornings, Danny Kennedy hops on a bike with orange saddlebags and rides half an hour from his home to Oakland’s Jack London Square. He makes for quite a picture cruising down Telegraph Avenue, decked out as he often is in an orange helmet, orange jacket and orange leather Adidas shoes. When he arrives at his office, he often makes his rounds on an orange indoor bike. (He’s not joking around with the orange thing.) Though Kennedy was once a young environmental activist documenting the horrors of the oil and mining industries, he’s now a 41-year-old company man. The orange that he wears daily — which extends even to the checks on his shirts, and which drives his wife crazy — is the brand color for his rapidly growing residential solar company, Sungevity, whose revenues grew by a factor of eight in 2010 and doubled again in 2011, and whose employees have grown to 260 from 3 since the company’s inception five years ago.
Given that growth, it’s somewhat surprising to learn that Kennedy and Sungevity aren’t taken very seriously by their larger competitors. Kennedy’s activist past and his willingness to wear his commitment to the solar industry quite literally on his sleeve are viewed by some as a liability in an industry desperate to demonstrate its seriousness. Thanks to increased Chinese production of photovoltaic panels, innovative financing techniques, investment from large institutional investors and a patchwork of semi-effective public-policy efforts, residential solar power has never been more affordable. But even with pricing that requires no initial capital outlay from consumers and guarantees lifetime savings — and even occasional opportunities to make money, by selling power back to the grid — Americans still aren’t buying into solar in significant numbers.
Two factors have hurt the industry’s growth. The first is abstract and well ingrained in the American psyche: the negative association of “green” technologies with inefficiency and idealistic, hippie-fueled impracticality. The second is concrete and recent: the sleek, vacant headquarters of Solyndra, the infamous federally subsidized solar-panel manufacturer that went bankrupt in 2011. The glassy campus sits just off the Nimitz Freeway, visible to commuters between San Francisco and Silicon Valley as they battle rush-hour traffic each morning, surreptitiously checking their phones.
Though the failure of Solyndra has dominated the political and social discourse around solar power, the reality of the industry — as evidenced by the enormous investments that companies like Google and Bank of America are making in residential solar power — is that it has rapidly become a smart, practical and profitable investment. Despite a lack of widespread acceptance, the market is growing and the competition is getting tight.
Where Kennedy will ultimately fit into all of this remains to be seen. He told me: “We don’t need missionaries anymore. We need mercenaries.” As the industry grows, big investments don’t necessarily flow toward the people with the deepest environmentalist roots. No matter how much orange Kennedy wears or how dedicated to corporate branding he appears to be, his bleeding heart still shows through. Missionary, mercenary: can he — can anyone — be both?
Of the residential solar-power companies with national aspirations, Sungevity is among the smallest in terms of market share. Sunrun, one of the market leaders, is led by Lynn Jurich and Edward Fenster, two Stanford Business School graduates who got into the business, as Jurich told me, in part because “the numbers worked.” SolarCity, another market leader, was founded by the brothers Lyndon and Peter Rive; Lyndon had previously founded Everdream, a software company that was eventually bought by Dell. The venture is also backed by Elon Musk, the Rives’ cousin and more notably a founder of PayPal; Tesla, the electric-car manufacturer; and SpaceX, a private space-exploration company. In 2004, Lyndon Rive was in a car with Musk on the way to Burning Man in Black Rock Desert, Nev., when the idea of getting into the solar business first hit him. (SolarCity also has a commercial solar-power business and is planning an initial public offering later this year, which could value the company at $1.5 billion.) Another company, SunPower, which is also a solar-panel manufacturer, does a big business in the residential market in California, through its dealer network. Kennedy and Sungevity run, roughly, fourth in California — which, because it’s the biggest market, most of these companies view as a proxy for the rest of the nation. But because of Kennedy’s background with Greenpeace, his big Australian personality (he was born in the United States but identifies as, and sounds like, an Australian) and some of his high-profile connections, he and Sungevity have received a fair amount of media attention. The actress Cate Blanchett was an early investor, and the actor Mark Ruffalo recently began leasing a system from the company, which he discussed in an appearance on “The Colbert Report” in March.
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Source: The New York Times Magazine
Link: http://www.nytimes.com/2012/08/12/magazine/the-secret-to-solar-power.html?ref=magazine
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