Clean Energy Investing: Changing Lives, Changing the World
Over the last several years, I have realized that there has been a compelling shift in the minds of investors in our business.
Historically, most investors wanted to know the numbers. What would be the return on their investment and how soon would it happen? But more and more, I meet people who are asking about impact, not just dollars.
The momentum of that sea change hit home this spring when we met new investors, a couple. They were mission-driven. They wanted their money to have a measurable impact on the world.
From the first days of our courting this couple, we focused on why we do what we do.
For a decade, our company has acquired land for large wind and solar projects, often leasing it to developers for 30 years or more. We do that by selling shares to people excited about investing in land for wind or solar projects.
We pointed this couple to the impact of clean energy. We explained how it’s more efficient to invest in large-scale solar utility projects, than to convert individual houses to solar. We noted that an investment of $100,000 is the equivalent of converting 41 houses to clean power. We pointed to studies showing that renewable energy generates more jobs per megawatt than traditional energy. We explained that it displaces the carbon equivalent of driving 86 cars annually.
They wanted to know the story of our company, asking questions about us personally and professionally. Our passion and our commitment, it seems, were also a selling point. And, yes, we outlined the financials of our fund, how land leases from clean energy projects pay high rates for a long time.
Today, we told them, doing right and making money are not-so-strange bedfellows. They became one of our largest backers, choosing to invest in their ideals.
For us, that story is symbolic of the change in our industry. As the threat of climate change becomes ever more pervasive in daily life through intense storms, droughts, wildfires, and heat waves, we’ve found backers who want to see real-world changes.
They’re investing with their hearts as well as their minds. They are looking to the future or, more accurately, looking to preserve a future for their children and grandchildren. They are turning their backs on dying industries like coal, oil, and gas. They are not alone. According to a 2016 USSIF report, impact investing grew a staggering 33 percent from 2014 to 2016.
The investors who joined us this spring represent the present and the future. Companies, both public and private, money managers, policymakers and investors who have failed to see this shift, are already being left in the dust of the past, the dust of mountaintop strip-mining and red-dirt drilling.
Renewable energy is mainstream. Finally. Renewables were the most-added source of new generation in 2017. In an increasing number of regions, clean energy is the cheapest source of new electricity. Confidence in the clean energy sector can be seen in the large commitments made by major banking institutions.
We’ve known this was coming. Now, the public — and our investors — are grasping the reality of a renewable energy future. Rooftop solar panels are commonplace and are required on new homes in some California cities. The rise of the electric cars by Tesla and even more surprisingly by auto behemoths like General Motors with the Volt, speak volumes about where fossil fuels are headed. Solar photovoltaic installers and wind turbine service technicians have become the nation’s two fastest-growing occupations. Even the military looks at a low-carbon future as a security issue. The European Defense Agency  cites reducing greenhouse gases as “vital” while a Pentagon report  says that more than 50 percent of U.S. strategic sites are threatened by climate change.
It has been a long road for us. John Copyak , our founder, saw the necessity of transitioning from fossil fuels and the promise of investing in land long before others did. We signed our first wind power lease in 2007. The financials have always been in our favor. Solar leases pay from 20 to 30 years and wind leases typically pay for nearly 35 years. Return rates are 5 percent before projects are built, but ramp up to 12-18 percent in the power-producing years. These things have been true for years, but old money has continued chasing old ideas.
The perceptions of clean energy investing went through some tough years with high-profile bankruptcies and the turn towards fracking with the dubious claim that natural gas was environmentally friendly. But the economics and a broad understanding of the dangers of climate change have won over investors.
People up and down the ideological and socioeconomic ladder are backing our funds. Among our investors, we count individuals with deep family roots as coal executives. The U.S. energy tradition has been one of family legacy and honored history. We, too, have relatives who worked in the coal mines for decades.
When John founded Clean USA Power, he realized there was a problem — human-induced climate change — and he had the skill in real estate to be part of the solution. We are experts at pulling together the pieces of a land puzzle that make wind and solar projects reality. Our developer partners trust us to deliver. Our investors know we don’t rely on tax incentives. We’re well beyond the early fringe adopters’ phase. Ours is a business on solid footing.
There is no simple fix for our energy future. Climate change will force a new economic reality on the energy industry. The grid of tomorrow will be smart and dynamic, responding to demand through artificial intelligence (AI). When your phone is the guidance of AI-powered systems, electricity can be redirected from an electric car battery to power your home while you sleep. Your smart device will know your schedule, ensuring the car will be fully charged before your next use. You’ll never know the difference.
Global strides through the Paris Accords and other agreements will propel us toward a sustainable 100 percent renewable reality by 2050. The state of California has mandated 50 percent renewable energy by 2030 and a bill requiring 100 percent renewable by 2045 was recently signed California’s Governor Jerry Brown. These policies are powerful, but our power demands won’t end in 2050.
We are moving towards a global civilization that will harness all of the energy hitting our planet from our closest star, the sun. We are not close now. But if we can focus our thirst for innovation and discovery, we’ll be there before the century’s end.
The rapid changes of the past few years have made me optimistic. We’re riding the momentum of a clean-power rocket that can’t — and won’t — be stopped.
Article by Maxwell Roe, Business Development, Clean Power USA (cleanusapower.com). Mr. Roe is passionate about the renewable energy transition as an effective way to combat climate change. He has worked in property management and real estate for 8 years and is an expert in communication, business strategy, and negotiation. Maxwell loves doing anything outdoors with his wife and dog. He is an avid mountain biker who can usually be found out on the trails in Bend, OR.
Energy & Climate, Featured Articles, Impact Investing, Sustainable Business