The world is our oyster, right? I mean, our sector is truly dominant. Right when we started, we were maybe lovingly called the alternative energy industry, but today when you're 73% of everything that gets added to the grid — solar, you've got battery storage, which is now one-third the cost of new natural gas, and then you've got wind power taking off, you've got new nuclear coming online, you've got geothermal taking off, etc. — then you know you are dominant.
You probably already recognize today's guest if you've seen the cover art or you're watching the video. Jigar Shah is someone you are well familiar with. Not only is he a regular guest here on Suncast, but he is the — or formerly — kingpin of the Department of Energy's Loan Programs Office, the reformer, the now former reformer. And I wanted to get a chance to see what he's up to next, because I know that that is the question a lot of you have been asking me, as though I'm in regular communication with him. Well, I was passing through DC and he was kind enough to ask me to stop by and to give a little bit of time to capture some of that essence, a little post-DOE glow on your face this morning, Jigar. Not nearly as stressed in your calendar as you were before.
No, no, I have an open calendar and I'm still trying to navigate like Outlook and Gmail, which the calendars don't sync, so yeah, first-world problems.
Well, you are officially a couple of weeks now out from having lost your last job — possibly your last job ever — and I think the question in everybody's mind is probably multivariant, but where does Jigar Shah go from here? You really have been one of the guys that's been a market maker. I think that for a lot of the folks that hopefully they keep the loan that you approved, you are a literal market maker for companies that really needed an injection of capital to prove that these technologies are worth the investment and that we can move them forward in giant steps. You would have seen a lot of business models and technologies that most of us are not even privy to, some that you probably can't talk about yet. But I think, you know, as asked for the world, is there something that coming off the heels of your time at the Loan Programs Office really impressed you or impressed upon you a business model that you're thinking, okay, we've really got some work to do here and going to lean in in this direction or that direction?
Well, look, I think that the Loan Programs Office is sitting in a place where the average loan size that we approved was $2 billion, right? So these are big deployments of technology, either within electric utility context, right, with some of the loans that we announced towards the end, or whether it's building a new manufacturing facility for batteries or critical minerals or, you know, clean fertilizer or all sorts of stuff that we did, right? And so those are all projects of a certain size, right? I think we all know that several thousand companies got venture capital from 2018 to 2024, and a lot of those companies are, you know, underwater on their valuation or, you know, having a hard time raising money now or whatever. And so I think that is a completely different set of things that need to happen today, and so I'm talking to a lot of people who are in that situation today. But I think the entire ecosystem is valuable in terms of figuring out how we, you know, increase the deployment of solutions by double, triple, quadruple — like we all need to be moving faster, deploying faster, making money faster, right, and employing people faster to be able to achieve our goals.
It seemed like there was, especially at the Loan Programs Office, a broad-based view on technology. A lot of folks expected you, coming in from having built SunEdison and being really involved with Generate Capital on deploying specifically clean energy technology, that you would be leaning more towards, let's say, solar and battery energy storage. And I think I saw — not necessarily the opposite, but a very broad spectrum of portfolio investments. Was there anything from a technology perspective that you think particularly surprised you in where it's at now versus kind of maybe where you thought it was before you got to DOE?
Yeah, look, I think we all know this to be a truth, but sometimes we forget about it, right? Ultimately, these projects are all successful because of execution, right? And so everybody wants it to be, well, you know, the macro forces of the cost curve of solar and cost curve of battery storage and all that stuff was the reason why people were successful. And in the end, it's really about execution. And, you know, what we found was there were certain groups of people who wanted to execute more than other groups. Like for instance, clean fuels — we got a lot of applications in for sustainable aviation fuels, renewable diesel, you know, things like that, right? We got a lot of applications in for, you know, battery manufacturing for electric vehicles, critical minerals, some of that stuff, right? We got a lot less applications in for, let's say, geothermal power or hydro power or some of those things, right? We're not against hydro power, gal power, but, you know, we can only serve the applications that come in, right? On the solar side, we did a lot of stuff in Puerto Rico, right? We did a lot of stuff in other places, but, you know, like no one who could get private sector debt would subject themselves to the Loan Programs Office, right? And so the solar and battery storage space, largely on the utility-scale side, could get money from Wall Street, and so you wouldn't bother, you know, going through our two-year process at the Loan Programs Office, right? So, you know, we obviously did more cutting-edge stuff, you know, a lot more nuclear, a lot more things like that. And then we certainly like pounded the pavement on the front end, right? Some of those things resulted in some really great applications, and some of those things didn't. Like, so for instance, we got a lot of virtual power plant applications that came in, which were really great, right? And so you saw some of those announcements occur towards the end.
So one of the things that you had the privilege to do is actually meet and interview, as it were, the founders and the founding teams of these companies that are bringing these technologies to fruition. Is there anything that you feel like is maybe a common thread or a theme among those that do make it through the gauntlet that others who are listening or watching would learn from?
Yeah, I mean, it's mostly just introspection, right? Like the vast majority of companies get to where they are because they have some sort of superpower, right? Sales, the underlying technology, right, whatever it is, right? But then what you find is to actually be ultimately successful, you need to succeed in like four different superpowers, right? And you only have one, right? And so some of the companies were very cognizant of the fact that they didn't have the other three and would ask for advice on how to get the other three. Like for instance, a lot of the companies had CFOs that were good at raising equity but terrible at debt, right? And so the question became like, how do you get through Loan Programs Office when you have a CFO that's terrible at raising debt, right? And so, you know, some of them would fake it, right? And then those people took like three years to get through the Loan Programs Office. And other folks would say, hey, we're not really good at this, like, are there firms that we could hire? Are there things that we could do to actually be more successful in this thing, right? We can point in the right direction, right? The same thing's true for like figuring out like offtake agreements, right? So some people are really good at their technology and getting that to be the most efficient, but, you know, talking to customers to actually buy their product was something they're weak at, right? And so like, hey, you know, how do we have those conversations, right? And so I think in general there's a level of humility that some folks showed and some folks didn't. And the one thing that was like clear throughout the whole process was their equity investors, like their venture capital investors or private equity investors, almost never had any answers for them, right? So when they went to their investors and said, hey, we're negotiating the PPA contract for the first time and I think we're getting our ass handed to us because we really don't know what we're doing, it wasn't like they were like, oh, I got a guy, like you should hire that person, right? They just didn't know. And so there's a lot of those kinds of things that I'm realizing, a lot of CEOs feel like they don't really have the support that they need to get these answers to questions where, you know, their strengths just aren't there and they need to bring that to the table to hit their next milestone.
It seemed like you're also saying that one of the keystones of success is the humility to recognize when you don't know what you don't know and to ask for help.
Yeah, exactly. And, you know, because I do think that we're in this unique spot right now where the world is our oyster, right? I mean, our sector is truly dominant, right? When we started, we were maybe lovingly called the alternative energy industry, but today when you're 73% of everything that gets added to the grid — solar, you've got battery storage, which is now one-third the cost of new natural gas, right, for four hours of battery storage — and then you've got wind power taking off, you've got new nuclear coming online, you've got geothermal taking off, etc. Then, you know, you are dominant, right? And when you're dominant, there's a lot of ways to make money, right, which is great, right? We have AI load growth, we have EVs, we have this load growth occurring, we need more of our stuff, not less of our stuff. Like when you look at the transmission interconnection queues, we're like 99% of everything that's in that queue, and so we are dominant, right? But a lot of the CEOs are like, but I don't know how to do this, I don't know how to do that, and their investors don't actually have those answers, and they don't really know where to go to get those best practices. And so like in the two weeks that I've been off, I've been having tons of conversations with people going, Jigar, like I just need this one thing to go my way, I need this one miracle, I need — I've been piloting my solution for like a hundred buildings and now I just need one big customer to like say that I want to roll it out, right? And, you know, I happen to know a lot of people now, and so like I have the ability to help like create some of those miracles or connect people to people and like do that stuff, and I'm proud to do it, right? I mean, I want all these folks to succeed and I want folks to accelerate.
One of the ways that you shared your knowledge pre-DOE was through a little thing that kind of kicked off the podcast industry for our sector called The Energy Gang. You guys just recently rebooted — we can't call it The Energy Gang because that exists — but you just rebooted it as the same group, you, Katherine, and Stephen. What's that called and what's it about?
Yeah, it's called Open Circuit. It's awesome, mostly just because I missed hanging out with Stephen and Katherine every week, and so that part's great. But I think the bigger part of this is that, you know, when you look at the traditional media, it really is a lot of reporting around this guy raised this much money, this woman raised this much money, and there's not a lot of like behind-the-scenes look around like how did that actually come together, how did that actually happen, how do I replicate that, right? And so that's a lot of what I've been trying to do is to demystify people's success and help people find it more accessible so they can say, oh, okay, that's interesting, I can do that too, right? And because we need a lot of those people to do that, right? And I think what Katherine brings to the table there in the same way is the, you know, insides around, oh, why did that tax credit survive and this one not survive, right? Like, and why did like this organization and this trade association succeed and this one didn't succeed, right? And, you know, I think that stuff matters, right? Again, when you're dominant, which is where we are today, right, and we're investing one-twentieth of the amount of money on influence that the oil and gas industry is doing, even though we're investing roughly double what they invest every single year in capital — I mean, like people are going to have to, you know, figure out like how much they want to invest in their future success, right? And so a lot of that I think is coming through the podcast, yeah. And without that, I think it's going to be hard to see how the industry continues to be dominant and continues to meet the needs of like energy abundance.
Traditionally, the podcasts, mine included in this space, are very niche and very focused on energy. Open Circuit, I presume, is going to continue in the vein of what you guys did as pundits around how climate technology is being rolled out. Specifically, where are we missing the opportunity in media right now as an industry?
Yeah, so like Open Circuit, you know, is something where there's a whole bunch of folks in the state legislatures, the federal government, right, governors' offices, economic development offices, companies, etc., who are like, I want to do the next billion-dollar deal, right? And Open Circuit actually is really helpful in getting that next billion-dollar deal done, whether it's new legislation or whether it's like getting a deal done or whatever that is, right? The next phase is to recognize that like what actually makes the world go around is the long tail of businesses that are $5 million, $10 million, $15 million, $20 million, $50 million, right? And so if this sector is the largest wealth creation opportunity of our lifetime, right, well then how do people get theirs? How do people make money in deploying the 65% or so of emissions that are profitable today to get to eliminate, right? And a lot of that is through people bringing their own trust relationships to the table, right? A lot of them went to high school with the decision makers, and they got to go to those people and say, you know what, it's a two-year payback to replace your police cars with electric police cars because police cars are idling all the time and only make four miles a gallon, right? Or hey, you know, like solar and battery storage are so much cheaper now that like you just got to cover all the rooftops with solar, right? There's just so much stuff where it's not getting deployed because people just don't trust each other. And so if you know somebody and they trust you, right, you can get that $2 million sale done, right? And then that actually can earn you money. And figuring out exactly how to do that and how to get paid, right, is something that like I think is content that really isn't out there but could be really mass market.
