Although his name is now synonymous with the solar installer company Sungevity that he co-founded, Danny Kennedy was an activist long before he was an entrepreneur. Starting out as a Director of Project Underground, Mr Kennedy campaigned to support indigenous communities resist mining and oil operations, before he went on to manage a team of 35 activists in his capacity as Campaigns Manager at Greenpeace Australia Pacific.
Establishing the California-based Sungevity was the next pivotal part of Mr Kennedy’s overarching plan to push for environmental market solutions. Pioneer of the Remote Solar Design tool that offers a quote and system design options without the need to visit a home, Sungevity operates in the United States and Europe.
“Part of my theory on social change is that we actually need business to be creating climate solutions as much as anything else.”
He credits the partnership formed with fellow clean energy industry professionals Andrew Birch and Alec Guettel as key to the company’s tremendous success.
“After years of being an activist, I decided to start a business and, rather than trying to do it alone, I found the right team to make it happen. It’s always about the team – never about the individual.”
Mid-last year, Mr Kennedy left his Executive Vice President role at Sungevity to become head of the California Clean Energy Fund – otherwise known as CalCEF. CalCEF started out as an impact investment fund, but now works to broadly facilitate entrepreneurship and financial flows in the clean energy industry.
Mr Kennedy shares his thoughts on why the US offers a more conducive environment for clean energy entrepreneurs, but why it can still afford to learn a thing or two from Australia when it comes to the residential solar market.
On making the move to California
The California Solar Initiative (CSI), a program that offered cash back for installing solar on your home or business, is what prompted us to start Sungevity in California. I was lucky because I had lived and worked in California in 2001 when I campaigned for San Francisco’s Solar Energy Initiative, a ballot measure to provide $100 million for the installation of solar panels on city-owned buildings, wind turbines and energy conservation technologies. Since then, the market has warmed up and is much more open to further innovation, so now there’s even more opportunity to grow the business without the rebates.
The Australian industry has a lot of experience relevant to America, especially in the rooftop solar industry. So I think that more Aussies should come try California – given their depth of experience in integrating small roofs to the grid.
On why clean energy innovation thrives in the US
Clean energy innovation thrives in the US because of its culture of entrepreneurship. There’s more risk capital available and there’s more acceptance of being allowed to try and fail as a company, whereas that may have a bit of a stigma in Australia. But I think Australians can be really ingenious entrepreneurs.
The bigger difference is that California also has had more consistent, long-term leadership on clean energy policy. There have been 35 years of government policy promoting this stuff – from energy efficiency to distributed generation and storage – and that’s been certain and predictable.
Also, the US and California, more specifically, do a lot of research and development and have other industry support mechanisms. They do the same for other technologies and sectors, including fossil fuels, but Australia has been beholden to coal and gas for way too long.
Rebate programs like the CSI and efforts like the SunShot Initiative, a Federal Government program that awards funds to help the solar industry become more cost-competitive, have helped the industry grow. So there’s policy backed by a budget, something Australia just never really had. They keep cutting programs like CSIRO and not funding them to the level that they need in order to be taken seriously.
On what the US solar industry could learn from Australia
Australia could learn from the diversity of the American solar industry. There’s solar generation installed on commercial and industrial rooftops along with residential installation, whereas Australia has been mostly residential until recently.
Around 99 per cent of Australia’s solar installs until last year were residential, whereas the US has been pretty evenly split for years between residential roofs, commercial and industrial roofs, as well as ground-mounted industrial installations.
The US industry has also done a lot of massive, ground-mounted solar farms, which has only just begun in the Australian market. The mix in America means a more stable business environment for the solar industry. There are more segments and opportunities to go after.
On the other hand, America has a lot to learn from Australia – especially in the residential market. For example, Australia has a lot more density in solar rooftops – some suburbs have solar panels on 50 per cent of the houses – so the industry is becoming more sophisticated with analytics, running real-time experiments and learning how to take advantage of solar for all loads. So many lessons can be learned.
On observations of political uncertainty from afar
Australia’s clean energy industry has suffered from poor political leadership in Canberra. The policymakers don’t seem to understand the value of clean energy. This is just not the way the world is going – clean energy is cheaper and more job dense, so it’s better from a political point of view.
For the last decade, Australia’s politicians have ignored the signals and decided to be beholden to coal at great peril to the whole country.
The Australian clean energy industry is pretty exempt from blame, in my view. They’ve done as well as they can in very adverse conditions.
We’ll continue to see the transition taking root everywhere. More money has been flowing into clean energy for the last three years than new, dirty energy projects worldwide. Clean energy projects already compete in many places without government support. If government support were removed from fossil fuels, clean energy projects would compete everywhere.
On the transition from ‘Clean Energy 1.0’ to ‘Clean Energy 2.0’
Clean Energy 1.0 was the hardware-oriented sales of technology products. Clean Energy 2.0 is the sales of the service that comes from those technology products – the electricity, the mobility service, and the things that will help us do what we do for less and with less pollution and pain. The transition from Clean Energy 1.0 to Clean Energy 2.0 describes a renewed focus on customer experience and services that are generated through hardware.
This is a classic industry cycle – if you remember, personal computer sales used to be all about the motherboard and some technical specification, after which they turned into what computers could do for someone and how they made them feel. The cool factor of Apple, for example, over the PC was in part about an emotional resonance as well as the better software experience.
That new focus means we’re able to help shape the future of energy to benefit everyone. We’re not just replacing dirty fuels and combating climate change; we’re building a new global economy where clean energy is affordable and accessible. And we can create service offerings that are more than just the sum of the parts of the solar system and electrons sold.
For example, community ownership and innovative models are part of Clean Energy 2.0 in the transport and electricity service spheres. An example is Powerhive – a company where I serve on the board, which offers a new solution to rural electrification in Africa. It has created a microgrid technology platform and business model based around remote energy access markets – delivering renewable electricity to communities far beyond the reach of grid infrastructure.
Australian companies that want to capitalise on Clean Energy 2.0 should think about exporting to Asia – to countries such as Indonesia, China and India – that are going through rapid energy transitions. There are lots of opportunities to help those countries leapfrog last century’s dirty, centralised, fossil fuel-based power plants and democratise the benefits of clean energy.
On role models
My wife, Miya Yoshitani, is one of my role models and I’m not just saying that. She’s the Executive Director of the Asian Pacific Environmental Network, which is an important environmental justice organisation – she is definitely the driving force in my life.
Ken Saro-Wiwa, the Nigerian environmental activist executed in the 1990s. He is known for saying from the gallows that the struggle continues, and so it does.
Jeremy Leggett, Chairman of the Carbon Tracker Initiative. He’s been a mentor since I worked for him at Greenpeace in the early 1990s. He inspires me with how dogged and persistent he is, with very smart strategies to ensure the world goes solar this century.
Mohamed Nasheed, former President of the Maldives. He’s been one of the 21st century’s leading advocates for truth and justice in relationship to his own country’s politics and climate change. He should be better known than he is – he’s a real hero.