Recharge4040: Jigar Shah

Jigar Shah: 'I have basically one skill, which is bringing mainstream capital into project finance'

Jigar Shah: 'I have basically one skill, which is bringing mainstream capital into project finance'

Everyone on the Recharge4040 list has the potential to make great contributions to renewable energy during their careers. At 39, Jigar Shah has already done it several times over, and is well into his second act as a clean-energy visionary.

In 2003, Shah founded SunEdison out of his home. Within four years, the company had 600 employees. In 2009, SunEdison was acquired for $200m by MEMC, the silicon wafer giant, and a very comfortably off Shah was able to turn his attention to entirely new endeavours. (Today, SunEdison is one of the world’s most important PV developers and EPC companies, with a rapidly growing presence in the developing world.)

With SunEdison, Shah achieved two things that have had profound implications for the solar industry. First, he came up with a new business model for PV — the energy-services model — allowing early customers like Whole Foods and Wal-Mart to get panels installed on their roofs without paying anything upfront. In one form or another, that model has since been copied over and over, unlocking billions of dollars in solar investments globally.

Second, in 2005, Shah wrung $60m in financing out of Goldman Sachs, a commitment he refers to as “the hardest money out there”. Obtaining “soft” money from impact investors — or investors concerned about things beyond pure profit — would have been easier. Still today, it is much easier for many renewables companies to go to impact investors than to banks.

But the trouble with soft money, Shah says, is that it doesn’t scale well — and certainly not to the level the world requires when it comes to renewables. By contrast, the Goldman stamp of approval soon had other banks lining up for a piece of SunEdison’s action, and that recognition by the mainstream financial community has put wind in the sails of the entire solar industry.

Since leaving SunEdison, Shah has assumed a range of positions, and has come to be seen as one of the most interesting and influential American voices on global climate and energy issues. He sits on the boards of various companies, funds and think-tanks, and for several years was chief executive of Richard Branson’s Carbon War Room, a non-governmental organisation working on market-based solutions to climate change.

Last year he published a book, Creating Climate Wealth. He runs his own consultancy. He does Ted Talks. He is a LinkedIn “Influencer” with nearly 20,000 followers. One of his most interesting roles is chairman of the Coalition for Affordable Solar Energy, a lobbying group set up to oppose SolarWorld’s campaign to impose tariffs on Chinese PV kit, which Shah believes are harmful to the solar industry and most American workers in it.

Despite being intricately tied to the rise of solar energy, and maintaining an unparalleled understanding of the current industry, Shah tells Recharge he believes solar actually receives more interest from investors than it deserves when compared with other “resource-efficiency” sectors.

“The question is, why does solar deserve $100bn a year of capital when there are lots of other technologies that have been around longer and actually have a more effective payback model? Why is it that an entrepreneur that’s got a great solution in combined heat and power can’t get the capital that we’re getting in solar?

“And it’s true for energy efficiency, for electric vehicles. Not every entrepreneur can start PayPal and become a billionaire before they start a cutting-edge transportation company,” he adds, referring to Tesla and SolarCity chief executive Elon Musk.

To Shah, that discrepancy looks like an opportunity.

“There’s always going to be room for new SunEdisons,” he says, adding that the company’s chief innovation — selling services, rather than equipment — could be applied to many other clean-tech sectors, such as water.

For example, “there is no clean drinking water available in villages throughout India”, says Shah, who was himself born in the country before growing up in the US state of Illinois. “We have solutions today that would allow us to sell water there for half of what they pay buying from water trucks. So you could see a SunEdison for water.”

While he wouldn’t mind running another company one day, he feels that his talents — or talent — may be applied most effectively in other areas.

“I have basically one skill,” Shah says half-jokingly, “which is bringing mainstream capital into project finance.

“So I’d be happy to run another company, if the need arose. But there are a lot of people today who are really good CEOs, and who don’t need me to come in and run their company — they need me to come in and help deliver project-finance capital.”

Although nothing can compare to the rush of seeing the company you founded grow meteorically and change the landscape for a critical emerging industry, Shah insists that he’s having every bit as much fun today — and says the stakes feel even higher.

The renewables industry has come to a point “where we can actually help governments solve major macro-problems”.

“That wasn’t true ten years ago. So it’s a different kind of fun.”

Jigar Shah is chief executive of Jigar Shar Consulting

Recharge4040 brings together the world's young new-energy pioneers from the worlds of renewables technology, finance, development, social engagement and advocacy. The list includes people from major wind and solar companies, banks, investment funds, crowd-funding platforms and governments. For the full list of nominees and news about the initiative, visit the 4040 website

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