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Cracking Open the Sun. At Last.

A single minute of sunlight striking the earth provides enough energy to meet the needs of everyone on the planet for a year. Which means that a day of sunlight provides 1,440 years of power. We just don’t harvest that power very well. (If you don’t count oil and coal as “solar” power, which in some senses, they are of course.)

A single minute of sunlight striking the earth provides enough energy to meet the needs of everyone on the planet for a year. Which means that a day of sunlight provides 1,440 years of power.

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We just don’t harvest that power very well. (If you don’t count oil and coal as “solar” power, which in some senses, they are of course.)

Last night, at the Hilton Garden Inn in downtown Philadelphia, Jigar Shah, who is at the forefront of cracking open the power of the sun, stepped from the pages of Fast Company and appeared at the first “Fast 50 Dialogue” open-house to explain why solar-generated electricity is finally taking off.

Shah, just 32 years old, is the founder and CEO of SunEdison, which in four years has become the nation’s largest generator of solar power. Who is buying SunEdison’s solar electricity?

Whole Foods and Staples
California State University and the City of San Diego
Costco and Kohl’s
Wal-Mart

When you’ve got Wal-Mart and Whole Foods as eager customers for the same alternative energy source, you’re doing something new. The remarkable thing is that SunEdison’s solar success has nothing to do with technology. It’s all about a business breakthrough.

Jigar Shah did a classic mind-flip on solar energy — turning it from a pain-in-the-neck for companies, into a way of solving problems.

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SunEdison solar looks like a lot of previous solar systems. On the roof of a Whole Foods or a Kohl’s or a Staples, there is a wide array of classic solar panels. During the day, the panels silently make electricity that powers the store. If the panels make more electricity than the store needs, the excess is feed directly into the power grid.

But here’s the twist that makes it all work: SunEdison owns the solar-panel installations. SunEdison’s customers simply sign up to buy electricity from SunEdison — electricity that happens to come from up on their own roof. SunEdison buys the panels, installs them, interconnects them, monitors them, and maintains them.

Shah’s insight was that solar was being held back by the fact that customers didn’t really fancy getting into the power-plant business — even if the power plant seemed relatively uncomplicated, as a solar installation does.

Whole Foods or Wal-Mart or CalState/Chico signs a 20-year contract to buy electricity from SunEdison — at a fixed price, which is to say, electricity purchased at competitive peak rates right now, at a predictable cost for the next 20 years. (Go back and look at your heating bill from 20 winters ago if you want appreciate the value of that.)

SunEdison handles everything else. As the people who came to Shah’s event last night learned, “everything else” is more complicated than it looks. Not least is the financing. The installation on top of a single Whole Foods store might cost $500,000. Sure, that solar set-up will more than pay for itself — but not this year or next. It will more than pay for itself, over 15 or 20 years.

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That kind of hurdle, among others, has been holding solar back. What company thinks of that kind of capital spending as a priority?

SunEdison gets the financing, the permits, the approvals, negotiates with the local utility, collects the rebates — and their business is made possible by three things: signing customers up for 20 years, the absolute dependability of sunshine, and the steadily dropping cost of solar technology. The new corporate concern about global warming helps things along.

Businesses, Shah has found, may not be eager to run solar power plants. But they are eager to buy solar power.

SunEdison’s growth shows how eager. In January 2005, SunEdison had 10 employees. It has 245 today. In 2005, the company installed 3 megawatts of generating capacity. Last year, that tripled to 10 megawatts. This year, Shah expects to install double that again — 20 megawatts. SunEdison’s contract with Kohl’s alone is for 30 megawatts of electricity, spread across the roofs of Kohl’s stores.

I made a field trip to Magnolia, New Jersey, earlier this week, and climbed up to the roof of a totally ordinary Walgreen’s drug store. The Magnolia Walgreen’s got a SunEdison solar installation in late winter. I’m not sure what I was expecting — a couple solar panels facing the sun — but what I found was both surprising, and was one of those slap-the-forehead moments.

The entire roof of the Walgreen’s was covered with rows of perfectly arranged solar panels — 368 in all. There was a margin to walk around the panels, a few aisles for access, and a couple places where shadows from the satellite dish and the HVAC units make installing the panels useless. Otherwise, the roof was covered from eave to eave.

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And why not? Dave Wilson, the manager of the store, says that even in spring, before the hot and sunny months, the panels are cutting the store’s electric bill 15 to 20 percent. And of course, solar provides power at just the time — the sunniest, hottest part of the day — when electricity is both most expensive to produce, and often relies on “peaking” power plants which are more polluting than typical load plants.

Once you’ve seen a solar installation like the one I saw, you can’t imagine why every flat roof where the sun shines doesn’t have one. On the very same street as the Walgreen’s in Magnolia are a brand new Lowe’s and Home Depot — each with three or four acres of open roof. Why didn’t they have solar installed as part of the routine construction? Dave Martin, the Walgreen’s manager, said, “What about schools? Every junior high and high school has a flat roof.”

Jigar Shah smiled last night when I said I’d begun to spot solar opportunities everywhere since climbing down from the Walgreen’s roof. “It’s a bit of a disease,” he said.

SunEdison technicians are installing 5,000 solar panels a week around the nation now — the equivalent of 13 Walgreen’s stores a week.

Solar, it turns out, hasn’t been waiting for a technology breakthrough. It’s been waiting for a business model breakthrough.

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