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About the Episode:
How do you fund a solar project?
What about the business operations costs necessary to get the project going to begin with?
What structures can you consider, and HOW do you choose the one that’s right for you?
We’re pulling back the veil so you don’t have to wander in the darkness here.
The business of developing solar power projects is complex, time-consuming, and capital intensive. And for the last decade, hundreds of entrepreneurs have endeavored to apply their creative efforts and work ethic towards solving both the development of the solar projects (not dissimilar to other land-based development deals tbh) and the financing of them. The latter has proven the more arduous to accomplish as the solar industry had to earn its keep in the world of high finance and prove that the product and its cashflow was durable and risk-mitigated. Unsurprisingly, those who have fared the best are those professionals who were already working in finance in some way, and were able to turn their focus and skills to solving the dual issue facing solar developers - how to get an individual project financed, and how to raise enough working capital to pay the team developing those projects until they could get to cashflow.
Today, you’ll hear hown one such company, Encore Renewable Energy, transformed from a traditional solar project developer into a vertically-integrated Independent Power Producer (IPP), ie a project Owner & OPerator, and along the way made the choice to become a Certified B Corporation. Their impact-focused business strategy, exemplifies the transformative power of renewable energy towards the triple bottom line - People, Planet, and Profits. The company strategically channels its efforts into solar development, storage solutions, agrivoltaics, and brownfield redevelopment, showcasing a multifaceted commitment to sustainable practices. Moreover, they have successfully secured a remarkable $150 million in equity funding. Today, you’ll learn a whole lot more about what that means, and how you might be able to do similarly in your own venture.
Blake Sturcke, the co-CEO of Encore, delves into his journey of discovering a passion for solar, drawing on his background in investment banking and entrepreneurship.
Blake discusses how Encore melds their sustainable mission with practical management strategies, the different investment structures available, insightful capital raising options, and a deeply rooted work culture that celebrates diversity and psychological safety.
On this final point, Blake goes deeper still, opening up about his personal experiences dealing with mental health challenges. This vulnerable exchange is particularly near to Blake’s own mission, and he hopes to normalize the topic of mental health awareness and create a safe space for employees to voice their struggles. This conversation isn't only vital for those in the renewable energy field, but also illuminates the possibility of merging success with mental wellbeing in any high-pressure corporate setting.
Key Takeaways:
From Developer to Independent Power Producer (IPP): Transitioning a company such as Encore Renewable Energy from a traditional solar project developer to an independent power producer (IPP) is a process that requires careful planning, strategic financing, and the development of necessary capabilities over time. But Ultimately it’s a logical, if not natural path of progress.
Aligning Capital Structures: Choosing the optimal capital structure is a key factor for the long-term alignment of the interests between the investors and management. Encore found that raising common equity offers the best alignment. We learn in depth the different options and why they chose this path over others.
Building a Diverse and Safe Workplace: Creating a culture that values psychological safety, diversity, and the empowerment of employees not only contributes towards better performance and retention but also creates an environment that fosters personal and professional growth. Be vulnerable & transparent about your own hurdles and you empower your employees with the safety to do likewise.
NOTEWORTHY QUOTE:
“We’re looking to create not really good jobs, but we’re looking to create outstanding, professional and personal growth opportunities for our team members.”
Thanks again to this week's sponsor, helping keep the podcast FREE to you!
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ABOUT THE HOST OF SUNCAST:
Nico Johnson is the creator and host of SunCast, consistently rated a top solar podcast in the clean energy sector. The content of the show is geared towards listeners looking for insights on where the markets are headed, how to position themselves or their companies, and what today's market leaders do to stay ahead of the pack.
Nico is an Investor, Executive Coach, and 16-year veteran of the solar industry, having led development in the US and Latin America for global companies like Trina Solar and Conergy.
You can connect with Nico Johnson on Twitter, LinkedIn or email.
If you’ve been second-guessing your work decisions or maybe trying to reconsider how you "fit" in the renewable energy industry -> grab 20 minutes on Nico's calendar and discuss whether having him as Your personal coach might be the right next step.