Increasing opportunities in the clean energy revolution

Marie Donahue: In recent months, we've experienced unprecedented changes whether from the COVID-19 pandemic or confronting racial injustices, following the murder of George Floyd here in Minneapolis. I know IPS recently made changes to its ownership and name this spring as well from IPS solar to Impact Power Solutions. And I'm curious—how have you, Eric, navigated all of that change in your professional role and how you are feeling about the state and future of clean energy today?

Eric Pasi: I'm very optimistic about the future of clean energy. That's for a set of different reasons, but primarily because the exponential improvements that we're seeing both in efficiency and costs or clean energy is on a pace to dominate the future energy landscape.

As background I've been with IPS for about 13 years. I came straight out of college, out of the University of Minnesota Carlson School of Management and joined IPS right at the precipice of the last global economic turndown. I have seen the incredible transition over the last 10 years as pricing has dropped considerably over 90% for solar panels and the adoption rate has skyrocketed to a point now where—in Minnesota at least—we've increased the total capacity of solar in the last five years by almost a hundred fold.

And so we are seeing that clean energy is not only the most environmentally friendly option, but it's also the most economic economic option and the lowest cost option. Once we've shifted into that paradigm, now the future looks really, really bright.

This year has been a challenge. And I think that’s for many reasons but certainly because of the COVID-19 pandemic, as well as the social and racial injustice injustices that we've seen in the wake of the murder of George Floyd.

Our mantra at IPS since the beginning—just to touch on environmental justice and just solar—has been to increase the opportunities for everybody to participate in the clean energy revolution. Whether that's our work at the Shiloh Temple in North Minneapolis or our work with indigenous tribes in Red Lake. We feel this movement is only going to be as successful as we are in making it as inclusive as possible.

So that we're not exacerbating the energy gap where the people in under-resourced communities don't have access to cheap, clean energy and are subsequently paying more for their energy. We don't want clean energy to be an exacerbating factor toward economic disparities in this country. So we've taken a very active stance to figure out how to accommodate that within our own ethos and within our own projects, as well as industry-wide—promoting other organizations to adopt similar policies.

The pandemic has also thrown us a curveball, where we were on pace for 2020 to be the best year for solar development for our company and in the country in general. What we saw in its wake was closures, widespread closures in March and April of this year, and that was actually at an industry level. We lost a little over 10% of our workforce having been furloughed or let go and the bulk of those job losses were happening at the small business level. That is something that we absolutely need to be mindful of. Small business in this country is the economic engine for growth. The extent that we're losing entrepreneurs and small businesses, that decreases the robustness of our ecosystem. So we want to be mindful of that.

The Minnesota Solar Energy Industries Association (MnSEIA) has been taking an active role in making sure that our member companies are understanding of what resources are out there to help them including PPP—or Paycheck Protection Program, a federal program that helps to make sure that that businesses can keep people on payroll employed with health insurance, et cetera.

It’s been important to make sure that our industry is understanding of the resources that are out there and just being supportive through these difficult times.

Clean energy is situated in a lane that lags. And what I mean by that is the kind of frontline industries worst hit by this economic downturn are probably intuitive—retail, hospitality. Some of those early indicator industries, whereas clean energy is a bit lagging. IPS, although we don't do a lot of residential installations, to the extent that people don't have jobs or are less economically secure to move forward with projects, those types of installations are likely to be more difficult to finance moving into the later half of this year and next year.

But we do feel clean energy is somewhat insulated to some of the larger downturns because it is infrastructure. It is resiliency. All things that will be central to recovery efforts, at least in our opinion, moving into 2021.

Marie Donahue: I'm curious to expand a little on that point about the commercial sector and what you found most challenging in your work during this time? Especially since you do work with a lot of commercial entities—perhaps an example of a roadblock you overcame or something new that you needed to manage the spring?

Eric Pasi: I think actually the commercial sector is weathering the storm okay right now. We don't know in commercial real estate, for instance, the repercussions of the stay-at-home order or even the future state of the office. How will that affect real estate values and an ability to borrow, et cetera? Or programs like Property Assessed Clean Energy (PACE), which is a financing tool for clean energy projects, where they can finance upgrades through their property taxes. Those are some unique opportunities that if credit is drying up for some of our commercial real estate clients, they can tap into the values of their buildings and then finance these projects in a way that is cashflow friendly—where the savings from solar, for instance, are in excess of what the debt payments for a PACE loan would be.

You know, some of our clients are in situations where their businesses are actually thriving in this environment. And that would be, you know, certain types of retail, municipalities where they’re looking for better investments because of the credit profile of those individual projects. We've got project owners that are really looking for those types of installations.

We had one project that was put on hold at the beginning of the Minnesota stay-at-home order. But that project subsequently has broken loose from the logjam and is moving forward now.

I think that there is still a feeling of uncertainty, but you know, in our business, the sun is going to shine.

We have a high degree of accuracy for what we can predict in terms of these projects. How they produce over a year. And I think that investment dollars are certainly heading in our direction because of that. So when a commercial business real estate owner is looking at ways to reduce their operational budgets they'll look to energy efficiency projects or solar projects as a way to capture value where some other areas of their business are cloudier.

Marie Donahue: Thinking about the sun and about the role of solar being infrastructure and resiliency, what are some of the roles solar and clean energy can play in a green recovery? How is that technology specifically able to inspire change during this time and help people adapt and move forward?

Eric Pasi: Clean energy needs to be considered in any type of recovery efforts because we have an innate ability to put people to work and save money. Clean energy is, as I mentioned earlier, the cheapest source of energy. As we're thinking about both the environmental and social costs of continuing with fossil fuel and thermal energies, clean energy is the solution to reduce both the economic, as well as environmental burdens that have been highlighted over the last year.

There are a ton of statistics that show under-resourced and disadvantaged communities bearing the brunt of both the COVID-19 pandemic, as well as the social injustices post-George Floyd. Clean energy is essentially a tool in the tool belt for policymakers as they consider what they can and can't do. Infrastructure was at the top of the list in the recovery in 2010 after the Great Recession and will be another top priority we feel in post-COVID-19 recovery.

Our projects, unlike some other infrastructure projects have a very short timeframe for development and installation—where those dollars can be spent within a 12 to 24 month window. Many other projects need a much longer timeframe to go through environmental diligence, permitting diligence, et cetera. Clean energy is actually very fast to market, and we also require more jobs per dollar spent when you compare to other energy resources like natural gas or coal.

When you think about those dollars that are spent on projects, they're going toward electricians. They're going to farmers to lease their land. And farmers have been particularly hit in this trade trade war that we've experienced. So their ability to diversify income with clean energy projects and help bridge this urban and rural divide that we're seeing. Farmers can actually help lower costs for people in urban areas by leasing their land for clean energy infrastructure. There are myriad different reasons why clean energy is the solution. And you know, those are just a few examples.

Marie Donahue: You spoke to the jobs piece, which I'd be interested in digging a little more into—in terms of where you see the sector, focusing its efforts in creating clean energy jobs, and specifically those that are accessible to folks from diverse backgrounds. I know IPS has done a lot of work in that space already and that you've written about that. But curious to expand on how you're thinking about clean energy jobs and workforce?

Eric Pasi: The clean energy movement needs talent, and it needs talent across the board. So for organizations like ours that means everything from early stage policy work to accounting, to finance, to construction, to electricians. There's an entire ecosystem for employment that is vast, and it’s everything again from engineering to operations.

These are jobs that can't be outsourced, they are local jobs, and we—and the Department of Labor and Industry and policymakers—are very cognizant about how to structure an efficient and effective workforce to address these types of opportunities in our industry.

One of the great things about clean energy is that there are entry points at any level of education. You could be a high school graduate and find a career. You could have an associates degree or a specialized degree, a two year degree, and find a vast number of opportunities in skilled labor. And then all the way through to a bachelor's and an MBA or post postgraduate opportunities.

There are just a lot of gaps to be filled at this point. And there are a lot of people out of work. So it makes sense to highlight clean energy as a possible career path for anyone mid-career or recent graduates. There’s plenty of work out there and plenty of resources for people to find those positions.

Marie Donahue: Thanks for speaking to that. Now, thinking broadly in terms of the future and about what we might anticipate looking forward, how are you and IPS thinking about strategy and work on the horizon? What gives you hope?

Eric Pasi: I'm hopeful. I'm hopeful for reasons that I wouldn't have been hopeful about maybe five or 10 years ago, and that tie back to what I had originally mentioned, which is that clean energy is not just the right thing to do. It's the most competitive option.

So no longer are we asking for special consideration or extra incentives—we’re just asking for a level playing field, and we will win. There are a few reasons why we've had detractors in the past, and I think a lot of that has revolved around the intermittency issue of resources like solar and wind: the sun doesn't shine at night, and wind doesn't always blow 24-7. And so the advent of battery technology and energy storage is going to further the amount of clean technology that we can integrate into the grid.

It’s going to increase the value of the energy that's being produced. So I'm very hopeful about that. We're starting to see a lot of commercial projects now considering and integrating energy storage. Especially at the utility scale level, we're going to see the adoption rate for energy storage mimic that of solar. One of my favorite stats is from 2000 to 2018, solar increased 55,000%. We're going to see something similar for energy storage, where just a handful of years ago there was zero energy storage on the grid, essentially. It's only accelerating faster.

A couple of the other components that I'm really hopeful about is this transition from carbon based fuels vehicles to the electrification of transportation. And what that means for a dynamic grid—where we've got load shifting when the sun is out during the middle of the day. We can charge our transportation fleet, and then draw from the transportation fleet during high grid demand. That balancing act and the dynamic between all of these energy resources, as well as load.

This comes with it a vast opportunity for entrepreneurialism—for people to come in and solve problems. And that's what has me excited. We’re at the beginning of this radical change and a lot of people don't quite see it coming yet. If we think back to the early 20th century, we had a car or two on the road, and within 10 years about 90% of transportation had shifted to modern day vehicles. We're going to see that similar type of disruption in the energy sector and transportation sector and other sectors based on technology improvement in the next 10 years. And that's extremely exciting.

Marie Donahue: In this new role of mine as a Storyteller for CERTs, I can empathize with the writing process, and I appreciate the really powerful nature of storytelling. Hopefully this will reach folks who need that bit of guidance as they make their way into the clean energy space. I want to wrap up to give you an opportunity to share anything we didn't cover that you'd want to share.

Eric Pasi: I think now is a great time for clean energy advocates and people that are interested in careers to learn more about this space. In my book, I interviewed a couple dozen successful, clean energy leaders. It really is empowering, once you see the science and the data around where we're headed. The website for the book is cleanwavebook.com and so you can learn more about it there. My Twitter is @ericpasi, Linkedin is in/ericpasi. I’d invite anyone to connect with me on any of those channels. So, thanks for having me here and allowing me to share a bit more about my story.