How NRG Energy Hopes to Score Big with Solar
How NRG Energy Hopes to Score Big with Solar
The Washington Redskins played with enough energy to send Sunday's game against the Dallas Cowboys into overtime, but by the time the 'Skins fell to their sixth consecutive loss, my host at Redskins Park -- David Crane, the chief executive of NRG Energy -- had left. Actually, he exited before halftime . . . to attend another NFC East showdown, the Giants-Eagles prime time game in New Jersey.
No, Crane is not a football fanatic. But the affable 52-year-old CEO is fanatic about promoting solar power, which is why he's been spending time lately with NFL owners. NRG installed solar panels last summer at Redskins Park [See my blogpost, An NFL rivalry...over solar], and he would like the company, which is based in Princeton, N.J., to deliver solar energy to the stadiums where the Giants and Jets, Philadelphia Eagles and New England Patriots play.
Why? To show people -- particularly the influential, well-to-do types who attend NFL games -- that solar energy makes sense, today.
"This is about demonstrating to the public the potential of solar," David told me, as Dallas jumped to an early lead. and we made our way up to the front of the suite. "I just want to make sure I see at least one play before I go," he said, ruefully.
Most utility company CEOs are, frankly, dull. Not Crane. He's straightforward and occasionally outspoken, friendly and open, and ready to think in new ways about an industry that hasn't changed all that much since Edison's day. He is passionate about the climate crisis–he was active in USCAP, the failed big biz/big green coalition that lobbied for federal regulation of greenhouse gases, and he pushed hard to build a low-carbon nuclear plant in Texas until the risks grew too high post-Fukushima. He's a friend of the Clintons, which is one reason why NRG made a $1 million contribution through the Clinton Global Initiative to deliver solar power to Haiti.
Now he is pushing hard for rooftop solar, smart meters and electric cars–a set of technologies that has the potential to transform the way utilities operate.
He believes that distributed energy -- that is, energy generated at the place where it's used -- is gradually going to replace some centralized power plants built by regulated utilities over the last century.
"To me, this is the next big thing in the industry," Crane said. "It's disruptive in the way that the cell phone was disruptive to telephony. It was severely disruptive over a 20 to 30 year period, not overnight."
"When we can offer you solar power from your roof, at the same price or lower than grid power, the whole nature of what it means to be retail electricity provider is going to change, and we want to be on the front end of that," he said.
Rooftop solar photovoltaics don't have to be cheaper than the wholesale cost of burning coal or natural gas to tip the market. They only have to beat the retail price of electricity to a business or home owner.
Now, before we get ahead of ourselves, a few caveats. NRG is not the Sierra Club. With $8.8 billion in revenues last year, NRG made most of its money by burning coal, natural gas and oil. Unless and until the cost of solar power drops further, that's unlikely to change.
Crane believes that the cost curve for solar is trending down fast. Subsidies from China as well as technology advances are reducing module costs. As the industry grows, costs of the balance-of-system costs will be driven lower by standardization and economies of scale. Installation costs are also sure to drop, he said. "We should be able to get to the point where installation isn't three days, it's three hours," he said.
Crane told me:
Our basic view is that within two or three years, we'll be able to offer electricity from your roof for 12 or 13 cents a kilowatt-hour. That may not be that exciting in Texas where the price is seven or eight cents. But I think the average price in Connecticut is 17 cents.
The CEO isn't just talking green. He's investing NRG's money in a clean-energy future, and betting consumers will follow. In the last couple of years, NRG has bought Green Mountain Energy, a retail provider of clean energy, for $357 million, and Energy Plus, an energy retailer with a loyalty program, and it launched eVgo, a network of charging stations for electric cars (one of its chargers is pictured at right). Yesterday, NRG announced the acquisition of Solar Power Partners, a San Francisco firm that develops commercial and industrial solar projects.
Don't read too much into this, but others in the NRG suite on Sunday were Fred Ni, an executive at the Chinese electric car and solar company BYD (it was his first live football game) and entrepreneur Jack Hidary, founder of Samba Energy, which offers a web-based platform the matches solar power installers with commercial and industrial building owners who want rooftop solar. Both are doing business with NRG.
You can expect NRG to move aggressively into the residential solar market soon, Crane indicated.
We're not really in residential solar the way we should be, the way that Solar City is, but that is an industry that you'll see us in. In residential solar, you're going to see a lot of change. We want to offer a seamless product -- we want to supply you both with your grid power and with the solar power on your roof -- so that for you it's simple, you get one bill, one price. No one's really doing that yet.
If I'd had a bit more time with David, I would have asked him whether NRG might be contemplating an acquisition of Solar City, SunRun, or Sungevity, all of which are fast-growing companies in the home and commercial solar financing business. You can read about NRG's green energy plans in detail in this excellent interview at Yale Environment 360.
I did ask him whether cheap, abundant natural gas could derail his solar plans. He replied that the two fuel sources are complementary, with natural gas supplementing solar until energy storage (possibly in the form of electric car batteries) becomes ubiquitous.
Said Crane: "Natural gas is going to take business away from coal. Solar is going to take business away from wind. That's the way the world is going to work."