No place to plug in

Solar visionary Jigar Shah sees small solutions to big problems

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The most important innovation in the past decade related to wealth creation and development has been the growth of the mobile phone industry. There are 5.3 billion mobile subscribers worldwide – yet, according to Green Power For Mobile: Charging Choices, by the GSMA Development Fund, nearly 500 million of these folks do not have a means of charging a mobile phone.

CEO of the Carbon War Room, and the founder of SunEdison, Jigar Shah

While the statistics are devastating and staggering, I believe that this and other energy challenges are the wealth opportunities of our lifetime. I call this ‘impact investing’. This is investing that is socially responsible and delivers compelling financial returns.

By leveraging the explosive growth trajectory of mobile communications, we can create entire industries that solve critical issues and create hundreds of billions, if not trillions, in market value.

Our lack of charging stations can actually charge a new market which will achieve four significant goals:

1. Make an impact by solving a pressing problem of our time;
2. Generate compelling returns for investors;
3. Generate growth for economies; and
4. Generate prosperity for developed and developing nations.

So, let’s look at the simple, yet growing, problem of cell phones with no place to plug in. It has actually pushed entrepreneurs to find solutions, and to find new business opportunities. For example, in just the past few years, new solar-powered cell phones have evolved for impoverished places like Central America, the Caribbean, and the South Pacific, where there is no grid and no plug. And last year, wireless mobile phone carrier, Vodafone, introduced a solar-powered mobile handset for India, where a third of the population does not have access to the power grid.

If we think about these big problems, the solution is not a silver bullet.  For example, cell phones solutions are often numerous and small in scale, such as solar phones, solar chargers, wind-up chargers, base station charging or village changing stations. These answers are all practical examples of miniaturizing power sources – a trend that started back in the 1970s. This miniaturization trend has accelerated in other areas, such as clean water, transportation, and agriculture.

With regard to power sources for electricity, the answers have become miniaturized by tapping sources, like solar and wind, off-grid.

I found this out first hand at SunEdison, a company I founded in Beltsville, Maryland, USA, in 2003. SunEdison employed a business solution, a power purchase agreement (PPA); to sell solar power to businesses as a service, not to sell a power plant. In doing so, it made it sense for leading US retailers like Walmart, Staples, Kohl’s, Whole Foods, and others, to have an energy source right on their rooftops.

Photo: iStock

With SunEdison installing, owning and operating the solar power plants on rooftops, customers sign power purchase agreements locking in electricity prices for as long as 20 years.

This has created an affordable way for customers to use (very) locally generated, clean, miniaturized power (compared to the grid) for their businesses. They replaced peak energy delivered from the grid with point-of-use solar energy. It made real the theory that Amory Lovins, Chairman and Chief Scientist of the Rocky Mountain Institute, depicted in his book, Small Is Profitable. The book uncovered proper accounting for the economic benefits of “distributed” (decentralized) electrical resources. Part of this is avoiding social costs. A recent case in point is the social cost we just witnessed with the tsunami in Japan, which led to the meltdown of a nuclear reactor.

Before we attempt to invent new technologies, we need to unlock business solutions that will deploy distributed energy solutions – as we found with the PPA for solar that unleashed a multi-billion dollar industry.

So, ‘Job One’ is to make business sense out of existing technologies that are not yet deployed. This is what we did with solar, and it is the opportunity that Vodafone is trying to realize with the growth of global cell phones.

Another example is how, at the Carbon War Room, we have just helped organize a multi-billion dollar market without government money. We have launched a new consortium that will unlock billions of dollars of investment in renewable energy and energy efficiency technologies for United States commercial real estate. With the consortium, the Carbon War Room is deploying simple developed technologies that were not being deployed to improve efficiency of buildings.

The consortium released incentive legislation that was sitting dormant. The Property Assessed Clean Energy (PACE) legislation enables property owners to accept a voluntary tax assessment as a means of repaying up-front financing of energy efficiency and renewable energy improvements.

The business consortium, that includes Lockheed Martin and Barclays Bank, plans to invest as much as US$650 million over the next few years to cut the energy consumption of older buildings in Miami, Florida, and Sacramento, California. These cities’ programmes alone could stimulate US$2.3bn and create more than 17,000 jobs.

A key point is that the implementation is in buildings, one-at-a-time – a miniaturized solution.

The answers are here. The answers are through miniaturization. From the cell phone that is solar-powered, to the building that is solar-powered.

We are at the threshold of the next great industrial revolution through thousands of deployments – first, using our existing technologies. While there is no magic solution to meeting our energy demand by using clean fuels, we can win it a thousand cuts at a time.

Five hundred million cell phone users with no place to plug in is just one multi-billion dollar opportunity in the ‘Third Industrial Economy’.

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● Jigar Shah is the CEO of the Carbon War Room, and the founder of SunEdison. He is a successful clean tech entrepreneur who is leading the Carbon War Room’s crusade in making gigaton savings in carbon, while at the same time creating wealth, jobs and growth. The Carbon War Room harnesses the power of entrepreneurs to implement market-driven solutions to climate change. The War Room’s unique approach focuses on bringing together successful entrepreneurs, business leaders, policy experts, researchers, and thought leaders to focus on market-driven solutions.