You’re in business, and you have a large commercial warehouse the size of New Seasons. You are ready for solar power. The cost of installing photovoltaic panels on your building runs in the tens of thousands. You’ve got a budget for the next five years, and a distant ten, but in no way is your company prepared to pay for twenty years of electricity up front. Enter Jihar Shah, the entrepreneurial developer of SunEdison.
Shah got the solar power business into the energy business. Well-capitalized investors, banks, and corporations with government subsidies (not to mention the cost of procuring and shipping fossil fuel to your friendly neighborhood power plant) develop and own coal, natural gas, oil, and nuclear plants. Public utilities sell electricity to customers.
Shah created SunEdison to apply energy industry practice to solar power. SunEdison clients Whole Foods, Staples, and Ikea pay nothing for their solar systems. They sign a power-purchasing agreement (PPA) and agree to buy electricity at a set price for at least 10 years. This helps establish price certainty in a volatile market and reduce the carbon footprint. Once SunEdison has customer commitment in PPAs, they borrow money to build solar systems with PPAs as collateral.
On March 7, 2008, SunEdison purchased Renewable NRG, a solar company in Portland. Continue reading