You already know him as Cofounder of CleanCapital. You may not know that he’s additionally a military veteran, former Federal Chief Sustainability Officer beneath the Obama Administration, and a multi-hyphenate who’s devoted his profession to public service, renewable power, and sustainability.
On this Photo voltaic100, Jon Powers weighs in on his distinctive profession trajectory, classes from profitable asset administration, and the implications of upcoming President-elect Joe Biden’s administration on the way forward for the photo voltaic business.
Beginning in renewable power
Richard Matsui: Folks within the photo voltaic business in fact know you because the co-founder of CleanCapital, and earlier than that, because the federal Chief Sustainability Officer beneath the Obama administration. However earlier than that, you studied elementary training and historical past in school after which served as a captain within the U.S. Military. Are you able to stroll me by way of how and once you first determined to work in renewables?
Jon Powers: I joined the Military earlier than 9/11, and for many people within the army, 9/11 was a life-changing expertise. I deployed to Iraq with my unit in 2003 and spent fifteen months on the bottom. It was over in Iraq that I first started to know power and power safety. Like many veterans, I got here house with the belief that we’d like a greater path ahead when it comes to power.
On the time, I didn’t actually consider power safety within the context of local weather change and clear power, so earlier than diving into renewables as a profession, I truly stayed in nationwide safety. I joined a non-profit working with children in Baghdad and spent a couple of years making an attempt to stop 16 to 25-year-olds from being recruited into extremist teams. It was difficult work—the entire motive we have now ISIS at present is due to that extremist focusing on of kids.
Following that have, I ran for Congress in 2008 up right here in Buffalo, New York. I misplaced that election, however shedding was flat out the perfect factor that has ever occurred to me. I ran on a platform of turning the Rust Belt into the ‘Inexperienced Belt’, and that bought me extra thinking about clear power. I went again to high school at Johns Hopkins to focus my profession on power safety and local weather safety. It was that work that led me, in fact, to the Pentagon, after which to the White Home and the Obama Administration.
Richard Matsui: That’s unbelievable. How do you assume your earlier work informs what you deliver to your co-founder and president function at present?
Jon Powers: I used to be drawn to the work right here at CleanCapital from each a mission standpoint in addition to an curiosity in finance as a device for social change. That sense of mission that drew me to the army can also be what led me to wash power. I turned thinking about finance in my work within the authorities — we had been doing over $6 billion in third-party renewable finance contracts throughout federal businesses. Bringing these two issues collectively, we based CleanCapital with a mission to speed up the move of institutional capital into clear power.
Among the greatest classes I discovered in authorities weren’t about coverage, however about how you can lead groups. I discovered how you can play what I prefer to name ‘nine-dimensional chess’, which was what you needed to do in case you needed the Pentagon to maneuver local weather coverage ahead. Lots of these expertise are transferrable throughout environments, equivalent to technique and group constructing. Different expertise I picked up, like efficiently navigating by way of forms, will not be as essential in my present work. It’s humorous; flipping to working at a startup, generally I’d search for a strategy of forms that didn’t exist. After which the problem can be as a substitute to seek out methods to make new processes on the fly.
Classes from profitable asset administration
Richard Matsui: Once I consider CleanCapital, I consider a efficiently executed rollout of working C&I portfolios. Is that the correct means to consider the enterprise?
Jon Powers: Thomas Byrne, Marc Garrett, and I began CleanCapital with a thesis that there have been know-how options in different verticals like actual property and pupil loans that we may discover and convey into clear power and clear power finance. Know-how has been on the coronary heart of what we do, when it comes to our capability to efficiently roll up belongings, and our mission was to deliver a extra environment friendly value of capital into the market. Annually we elevated our recreation when it comes to who we partnered with for capital. Capital is so essential for fixing the local weather disaster — we are able to and must get pension funds and different endowments to see clear power as a fascinating, essential funding alternative. They discuss it at present, however we have to begin placing cash to work there.
Richard Matsui: It’s an fascinating scenario the place you’ll be able to in a short time change into a sufferer of your individual success. The market has gotten much more snug with C&I portfolios because you began the enterprise.
Jon Powers: That’s 100% proper. However you’ve simply bought to maintain one step forward, and that’s every part in photo voltaic.
Richard Matsui: Completely. As a big C&I asset proprietor, what challenges does your group face with financing or asset administration in comparison with the utility-focused gamers?
Jon Powers: From an asset administration perspective, we delight ourselves on constructing relationships with our off-takers. A whole lot of financing companies will maintain an arm’s size and pay a 3rd occasion to intermediate the power supervisor for the state college, hospital system, college system, and even Amazon or FedEx. We deliberately construct that relationship.
The worth that sturdy relationship brings to us is twofold: one, a powerful relationship makes downside fixing extra environment friendly. If an issue arises, the off-takers know who we’re and might collaborate. Two, we acquire extra alternatives as a result of off-takers view us as companions. For instance, when the off-taker likes the photo voltaic asset and needs so as to add storage or one other system, it’s only a dialog in an ongoing relationship.
At our scale, the problem is maintaining with these relationships when you may have a whole bunch of belongings. It’ll solely get tougher as an increasing number of states start to speed up the C&I house.
Richard Matsui: On that word, you’re uniquely skilled in coping with working portfolios. In fact, not all of them will carry out completely. How do you deal with that?
Jon Powers: We actually deal with front-end diligence to know any issues. This strategy additionally permits us to focus on among the BS we’re seeing, whether or not it’s from builders or simply easy issues like inverters. A system that was constructed 6 or 7 years in the past could have a very totally different inverter infrastructure, and you’ll’t simply rip it out and exchange it with what’s new to the techniques at present. These kinds of issues are undoubtedly difficult.
We additionally attempt to maintain it as native as attainable. Generally that’s a bonus, generally it’s an obstacle. It is a bonus from a price perspective, however it will possibly additionally imply a lower within the leverage you get from solely working with giant companions. We now have some giant companions, however we actually attempt to maintain it as localized as we are able to, which could be laborious to handle.
Richard Matsui: I can see that. What processes or instruments helped you to establish the ‘downside kids’ and implement these O&M enhancements?
Jon Powers: That’s a great query. A part of what permits us to establish issues is the best way we structured our reporting, not only for our buyers however internally as nicely. This allows us to trace any issues and push for well timed resolutions. However understanding the place the asset administration group ought to focus its O&M time shouldn’t be at all times apparent. As an business we nonetheless battle to know the drivers of underperformance, together with climate and modeling assumptions. At CleanCapital, we strategy this by leveraging business information, together with kWh Analytics’ STAR Comps product, which helps us establish addressable efficiency points and validate our modeling assumptions. Insights from information merchandise like STAR that make the most of market information will inevitably be a part of the maturation of the sector.
And to be utterly candid, one other benefit is that we have now an impressive group. Zoe Berkery, who now leads our asset administration, was our first worker. When she began at CleanCapital, she didn’t have photo voltaic finance expertise—her background was working with me on the White Home. Asset administration shouldn’t be simple work, and generally it requires that we maintain the suppliers’ ft to the hearth. However Zoe’s an actual rock star and has constructed a group beneath her that does this options implementation work in an extremely environment friendly means.
President Biden and implications for the photo voltaic business
Richard Matsui: What’s your forecast for what renewable-related insurance policies we’re going to see beneath the Biden administration? I really feel like you may have a greater sense than most as a result of quite a lot of your former White Home colleagues are getting pulled into implementing coverage now.
Jon Powers: I’m excited that that is not going to be about proving whether or not applied sciences like photo voltaic or storage work — we all know they do. It’s going to be a query of how you can speed up the market.
This subsequent technology of leaders is coming in with an understanding of the basics and historical past of renewables in order that they’ll take this chance to significantly spend money on infrastructure and speed up the power transition. That background information lends itself to advanced issues. For instance, they may say, “Hey, the tax credit score is sweet, however the tax fairness markets are tight proper now. So, is that the correct resolution or ought to we strategy this with a money grant?”
The President-elect is placing a really sturdy group collectively. You’ve gotten local weather folks becoming a member of throughout all of the businesses, together with the Treasury, the Division of Inside, the Division of Vitality, the Environmental Safety Company, and the White Home. So we’re not going to have only one or two workplaces, however an all-government strategy to unravel these issues.
And when it comes to collaboration, for these of us who’re working within the business, we’re going to have to be champions for our insurance policies. We will’t simply hope that issues will work out — we have to put within the work, too, and make it possible for what we all know and care about is included into coverage.
Richard Matsui: Actually. What’s the best impression means of placing within the work for photo voltaic coverage?
Jon Powers: I’ve a coverage background, so we attempt to leverage coverage partnerships. We’re members of SEIA, we work with the Clear Vitality Council, and we’re in 12 totally different states and attempt to discover native companions. In lots of circumstances, it’s a pair hundred bucks right here, a pair hundred bucks there to hitch these memberships, however you get localized intelligence, you’ll be able to deliver your voice to the desk, and you will discover methods to companion to have an effect. For instance, we partnered with totally different teams, together with Tesla, to push again on internet metering.
There’s a new sophistication throughout our business that basically hasn’t existed earlier than. Let’s be a part of forces and put some actual cash to work. Most groups, particularly in photo voltaic, don’t have cash for their very own coverage store, however we are able to contribute to those business partnerships.
Way forward for the business
Richard Matsui: Shifting ahead into 2021, we’re asking everybody within the Photo voltaic100 collection about racial fairness within the photo voltaic business. The thought is that the photo voltaic business is in fact essential due to local weather change; it’s additionally essential as a result of there are lots of people who work on this business or wish to work on this business. As a revered photo voltaic veteran, blissful to have you ever weigh in.
Jon Powers: I’m glad you’re elevating this query. It’s one thing I’ve been in dialog about as nicely — each what we are able to do as an business, and what CleanCapital can do.
One factor we’ve accomplished to sort out this problem as an organization is to create an inside volunteer working group of staff to information these adjustments. The turnout for this group has been phenomenal, and so they introduced ahead suggestions on what we as an organization can do to extend range inside our hiring, how you can assist organizations doing essential work in fairness and inclusion, and the way we are able to make sure that we’re spending cash with firms that share our values.
Administration has been impressed with their work, and the truth that this has really been pushed by the broader group. It hasn’t been a top-down initiative.
The group is obsessed with range, and their suggestions have been well-researched and actionable. For instance, we’re going to traditionally black faculties and universities (HBCUs) to do outreach for our internships, one thing I’d not have thought to do proactively.
Moreover, as a result of many individuals within the working group have tech backgrounds, they’re making an attempt to use classes from that business as nicely. Tech in fact has additionally struggled with creating a various and equitable workforce, and it’s a possibility to study each the positives and the negatives from that house, and convey these classes into photo voltaic.
Richard Matsui: That’s unbelievable. Are there folks or teams inside our business that you simply assume are modeling the form of actions we as an business must take?
Jon Powers: Individually, Devin Hampton from UtilityAPI has some actually superior management on this and has put out a problem together with the Clear Vitality Management Institute (CELI) that individuals ought to take a look at. It’s known as the Edict Pledge, and CleanCapital and kWh Analytics are, as you already know, each member firms. For individuals who haven’t but heard of it, it’s a simple dedication of what you are able to do as an organization.
From a systemic perspective, on the subject of broader questions of fairness, I feel local weather and environmental justice is a big theme that we’re going to see extra of beneath this incoming administration. We have to have essential conversations on how we make sure that folks with low to average revenue can have entry to group photo voltaic. This isn’t a pleasant to have, however a must have.