We have this debate going on in our business.
We started off and all of our stories were about the impact
and how cool this could be if we gang tackle these problems.
You know, that was the mission. And then we said, you know what,
We don't quack like a duck. For these wealth investors, the
family offices and the registered investment advisors,
we have to look a little bit more like the products they're
used to seeing. We feel like we've gone too far
there. And I'm getting a lot of
communications from our clients saying like, don't shy away from
the impact that you're having, like that's it's OK to talk
about those things. And sometimes I feel like I
don't want anybody to think that I'm any less fit as a fiduciary
because our projects have impact and I'm not taking wild risks
with your money. People's money is important to
them. But damn it, we do have a huge
impact too. Hello, my name is Jigger Shaw
and I'm a clean energy entrepreneur.
And I'm Jamie Nolan, a clean energy communications executive.
And this is energy umpire. Hi, Jigger.
How's it going? Hello, Jamie.
Oh my goodness, is this like we had to do a double header today?
We're. Doing a double header.
We're wearing the same outfits. YouTube audience, sorry about
that. It's one of those things where I
just feel like there's so much going on in the world today that
it's hard to keep up and there's just so much good content.
So I'm really happy, you know, that Mike was able to come on
and explain Energia and, and I just think it's like right now,
like there's a lot of US focus and what he's doing around the
world is super important. There is so much going on and
it's a really exciting and frankly just fascinating time to
be working in the energy sector with the supply disruptions.
And from the closure of the Strait of Hormuz and the
International Energy Agency coming out and saying that the
early signs are showing the very clear indications that the
supply disruptions are driving the accelerated adoption of
electrification solutions. So like China is exporting more
solar PV to Southeast Asia and Africa, EV sales in Asia,
specific EV sales in Latin America and Europe, heat pump
sales in Europe. I mean, none of these indicators
are you're not, you know, you're not hearing necessarily those
numbers in the US, which I think could be a result of, I mean,
we're a little bit isolated from some of the impacts.
There's also political considerations.
But internationally, absolutely, we are seeing the accelerated
adoption of renewables and electrification solutions.
And so I'm really excited to speak to Mike about what he's
seen in his company as a result of that.
Yeah, I was looking at the data from Ember and others.
In March alone, Nigeria was up 500% in terms of solar panel
imports. And so it's crazy town how many
people are putting this in. We are now in full rationing,
like JP Morgan said that we're going to hit tank bottoms by the
middle of July, which means that basically once you hit like 6.8
billion barrels of oil in the existing system, you're at the
lowest possible amount because you can't put 0 oil in the
pipelines. Otherwise like stuff starts to
break down. You can't let go below a certain
amount. Same with the tank, like you
can't like have 0 oil in the tank.
They have to have a little bit in there at all times.
And so we're now actively rationing, like Estonia, South
Africa, other places are just actively rationing and saying
you can only have this much gasoline, this much diesel, this
much jet fuel. It's bonkers.
Like how this is happening around the world and I think
most Americans don't even know about it.
Right, let's get right into it. Energy Empire is powered by
octopus energy. I hear it at every conference.
We need more generation, more transmission.
You're saying we don't? We do, but we're ignoring
something faster. Sitting in people's homes and EV
is basically a 60 kWh battery idle most of the day across the
US. That's gigawatts we're not
using. Utilities have pitched demand
response for 20 years and it still hasn't scaled.
Why is this time different? Because we're not asking
customers to change behavior, we're automating it.
The grid treats customers like demand that actually distributed
infrastructure. Connect those assets and you can
shift load overnight at scale. So the constraint isn't
technology, it's. Coordination the solutions
already deployed, we just need to use it.
Thanks, Natasha. That was Natasha Crowe, vice
president of marketing and comms for Octopus North America.
If that's the version of the Grid you want, check them out.
The link is in the show notes. Mike, so good to have you on.
Hey Jigger, thanks for having me.
It's been a long time in the making, buddy.
Well, it has been we, we've known each other a long time.
I, you know, I have always been so impressed by your career, but
also just like your passion and like sort of persistence, right?
Like I think, oh, stop. But I'm, I'm going to blush.
Is this gideo? Yeah.
Well, like, I mean, when I first met you, you were doing green
Skies and so you were, you know, putting solar on Walmart and
Target rooftops and all that stuff.
Then you sold it. And then you were like, huh,
what do I do? And I think you like traveled
the world with your family and I.
Tell you the first time I actually heard the name Jigger
shot it was in the green skies days.
And I don't think I ever told you this story, but real, real
quickly. You remember the first time you
heard of Jiggershaw? I gotta hear.
That absolutely, absolutely. I was negotiating a deal with
Walmart for the Puerto Rico stores and you know, we had
already done a number of Walmarts there, and so had Sun
Edison, so had Solar City, so had Sun Power.
So it was kind of like the battlefield for CNI Solar at
that time, which was effectively the battlefield for all of solar
'cause that's where the industry was at in those times.
And I got the Walmart guy calling me up and saying, look,
someone's going a penny cheaper. You know, do you wanna, do you
wanna call it quits or do you wanna match it?
I said, I, I'll go, I'll go a penny cheaper than him.
All right, good. I got the deal, guys.
High fives. We just got the, the, the, the
Puerto Rican Walmart stores. Phone rings again.
It's Walmart again. Listen, he, he went a little
cheaper. Would you would you knock
another penny off? I'm right at the edge of you
know what, what works here? Like, OK, I'll go 1 penny
cheaper. Yay.
High fives. We just got the the Puerto Rico
Walmart projects. Phone rings again.
I'm like, all right, who is this guy?
They said, well, it's it's Jigger Shaw or son Edison.
He's he's trying to get these deals.
I said, all right, eventually I said let him have them.
And you, you guys got those stories?
I yielded. Yeah.
True story. I mean, that's Walmart for you.
Those guys, those are sharks. That's right.
That's how they get their prices low.
I give them props. Everyday low prices, you know,
care of the solar and energy industry.
Well, like look, you went around the world, you started like
figuring out that it's not just solar happening here, it's
happening everywhere and you decided to fix this product.
I'm fascinated by this because as somebody who's been in the
solar industry a long time, I've never owned solar stocks, right?
Like I just never really figured out why would I own a solar
module manufacturer stock or a solar inverter company stock or
this stock or that stock. Like my whole thing is I've
owned solar systems for years, right?
Like the solar system on the church down the street, the
solar system on the private school down the street or
whatever. But I'm also like an active
investor, right? Because I work in the solar
industry, etcetera, etcetera. So the IRS stuff works.
And so when you came along and you were like, well, you know,
like there's no way to really own a piece of a bunch of solar
projects and, you know, easily get in and out of the
transaction. I'm going to create my own
platform. I was like, damn, that's really
cool, right? So like, so like, how did you
get to, you know, creating this platform?
And you know, how did you decide this was something you wanted to
do? Well, honestly, Energia was an
evolutionary process jigger. It started off where one day at
Greenskies I had all this capabilities, engineering
hundreds of megawatts of projects that we owned, my
partners and I, And then with one stroke of the pen, I didn't
have any capabilities. I didn't have any solar
projects, but I did have some capital and I felt kind of naked
without my company around me and these assets that I loved.
And I knew the first thing I had to do was figure out what am I
going to do with this capital? I, I have to invest it in.
And as a story goes, I actually, I hired a bank to buy stocks for
me. You know, they come to your
house, they, they're going to buy your portfolio.
Do you want like the medium risk portfolio or the higher risk
portfolio or the lower risk portfolio?
And it's like the you can cap out at like a 4% return as their
projections sound like I don't want any of this.
So I decided to follow my instincts and get back into
solar, investing in asset class that I know and looking for
projects that I would want to own.
At the same time, my buddy Chris Sattler had sold his company
called North American Power. He was kind of in the same
situation. So we partnered up to make some
investments and we started buying some solar projects and
we said where are the most lucrative solar projects going
to be? And we assumed that they would
be in Brazil at the time. There's a a confluence of
circumstance that made Brazil an obvious hotspot.
We went down there and we started investing our own
capital. And then we quickly realized
that it's easier to find great solar investments than it is to
fund them out of your back pocket.
And we had out kicked our own coverage.
So we called in friends and family.
And then friends and family evolved into how do we expand
this so more investors could invest alongside Chris and I.
And it became sort of an asset class by accident out of the
pursuit to put our own capital to work in this asset class that
we love and know so much. Yeah, no, I remember those days
because I think I called you, I think maybe 2019 and you were
already feeling like you are exposed.
I think, I think your wife even got on the phone was like, yeah,
he's exposed. Like let's figure this out.
And and you know, like, and I think we like we jumped in and
we invested. And part of I think the
challenge with this space is that, you know, there are big
players, right, like the IFC, Brookfield, other folks who are
who are interested in the space, but they really don't kick in
until you have $200 million worth of assets.
And so each one of these projects was like 345 million
bucks. And you know, like, like even
for somebody with a fat wallet like you, like, you know, like,
you know, breaks you. You can only buy so many of
them, you know? And then you're like, now what?
Right. And so like, you're in this
weird situation where you know, you can buy really good quality
assets, you can put money to work, but you can't, like, you
can't get to $200 million, right?
And so like, so you, you decided that this was a problem you were
going to tackle, right? Is that how it worked?
Yeah. I mean, there was no easy way
for me to invest back into solar energy projects at the yields
that I know solar energy projects should be producing.
The nearest thing we have in the marketplace was sort of the
yield Co, but the yield Co is not what we're doing.
There's a bunch of problems with yield codes. 1 is that the price
is traded on an exchange, so it gets detached from the NAV of
the underlying assets. So you may be buying those
projects, a proportional share, those projects at a good price
or a lousy price, but you really have to be an expert to
determine if the price is a good one or not.
Well, I mean, just to interpret that for people like I think
you're absolutely right that like the way the Yield Co works
is that if too many people buy the stock, then the stock price
goes up and the yield goes down, right.
So if people have over purchased the stock, then the yield is now
a 3% dividend yield. And if the stock tanks right and
craters, well now the yield is like 8%, right.
And so it depends on what price you get in on the stock.
Whereas if you own a project, then you're at the net asset
value, you you buy in at the price that it took to build the
project and so you get the full return.
So there's nobody on energy at dot com that has a lousy
experience. They get the NAB divided by
outstanding shares. That's the share price.
And that's what the share price should be to equalize investors
because they all own the same basket of underlying solar
energy projects. Why would they have different
outcomes? So we took our securities off
the exchange. We only sell them through
energy.com. Yeah, I mean, it's so brilliant,
right? Because basically, like if I
give you a dollar, I get the return on that dollar, but if I
sell, I just get the dollar back.
Like the dollar doesn't go up or down, the dollar stays.
The dollar I'm I'm but I'm getting like the yield on that
dollar based on how the solar systems perform.
I think of it, I mean the dollar will depreciate, right, because
solar assets appreciate over time.
But I look at it as like you're getting a, a ticket under the
dividends bus. And as long as you're on the
bus, you're harvesting those dividends.
And if you want to get off the bus, you sell your ticket to the
next guy. He comes on, you get off, now
he's on the dividends bus and he's enjoying that cash flow off
that. And that's exactly how it really
works. I like that.
I like that analogy. So just to make this a little
bit more easy to understand first, I mean, obviously Mike,
you're a very sophisticated investor, Of course, Jigger is
as well. So I want to just boil this down
for like a more everyday listener, if you will, maybe
someone who who isn't familiar with some of the stuff we're
talking about. Meaning not your brother.
Not my brother who works on Wall Street, not my brother.
So Mike, if I want, if I want exposure to AI, can I can buy
stock and NVIDIA. If I want exposure to the real
estate market, I can buy into a real estate investment trust or
a REIT. But if there's a solar farm
being built outside my town or thousands across the world at
any given time, I can't really own a piece of that.
So why has energy infrastructure historically been closed off to
just an ordinary like 4 O1 Ki trade?
You know, in my free time for fun type of investors.
You know, what we're doing has been tried before.
So we didn't come up with the idea of taking solar energy
projects, converting them into securities and selling
participating shares in those projects.
That's kind of been around, but it hasn't worked.
And there's a couple of reasons why I think I know why it didn't
work in the past. I don't know for sure, but #1 is
that the policy that allows us to create these securities is
the JOBS Act, which is fairly recent policy, Obama
administration stuff. So it wasn't until recently that
we could create securities and sell them broadly to any
individual who wanted to buy them.
You know, if you think about Mosaic, one of the kind of
famous predecessors of Energia. They can build a player and Dan
Rosen. They were before the JOBS Act,
so they had to figure out some other way.
I don't know how they did it, but so the JOBS Act was
critical. And then also, I think a lot of
other attempts I've seen at this have been people who had like
the concept and the IT of it all, maybe like sort of a dorm
room startups. But what really you need in
order to do what we do is the solar expertise.
You need to really know the asset class and know how to
avoid risks. And it's a very difficult asset
class for the uninitiated. So I'm glad we have a whole, you
know, company under our belt before we even started offering
these services to individual investors.
But that's probably another part.
There's a couple of companies I see out there right now in fact
doing something similar to energy, but maybe I don't
believe have the solar energy experience to really guide
investors capital in this asset class.
And it's more than solar energy experience, right?
Because if you're going to buy projects in Brazil or South
Africa or India or places you also have like currency risk,
you have asset management responsibilities, right?
If something goes wrong, someone's got to get, get called
and be like, hey, my system's down, go fix it, right?
And so like, how do you deal with all of that?
What you're really describing is grit.
You really have to be made a steal to do what we're doing,
and it is hard because there's so many challenges.
I just got off a call right before this podcast with my
asset management team, and we're just spent two hours going from
one catastrophe after the next. And that's normal for us.
That's pretty standard operating procedures.
I'm not worried about it, but that's what we do for a living
is we we fix problems. And I've got a team around me
who has a great tool set for solving those problems and they
have the grit to get after it. And I think that those things
are all necessary to execute the way we've executed the last five
years. So a lot of your projects are in
emerging markets. You mentioned Brazil.
And so I think when most average investors here emerging markets,
they're of course thinking political risk, corruption and
stability. But the returns that you are
able to produce at Energy are actually telling a vastly
different story than that. Brazil around 14%, South Africa
near 10% and then much lower in the US But why are our instincts
around these emerging markets so wrong?
What would you collect there? If you look back like how have
people actually gained exposure to emerging markets, Most
commonly it's been through like either their public stock
exchanges. You know, you can go on the
Gilberg public Stock Exchange. You know, many countries in
emerging markets have their own exchanges and those exchanges
have been pretty lousy performance.
There are periods where they're they work well, but mostly it
has underperformed. So I don't think a lot of people
have had direct access to investment opportunities the way
that they can at Energyia. And then I think that also the
world is broad and complex and Americans are famously, and
rightfully so, like they don't really understand these markets
as well as maybe they should. We view as Americans, other
countries to be bizarre, dangerous places.
And while that's true, we're all so bizarre and dangerous, and we
also under appreciate the vastness of these economies.
And Brazil is a massive economy. There's extraordinary wealth
there. There are sophisticated, highly
educated people conducting good business there.
And that's what we're looking for when going to these markets
is the cream of the crop. And when you get into the right
pockets, you know, these bubbles within these emerging markets,
they don't feel a lot like emerging markets.
They feel like sophisticated places to do business where you
have to be aware of things like foreign exchange because that
brings you exposure to the entire market.
You know, not I can't bubble myself out of the foreign
exchange risk. But look at the foreign exchange
situation right now over the last five years.
The dollar just keeps on pounding, getting pounded rather
by foreign currencies, and that's been a huge advantage to
my clients who are benefiting from owning real or Rand or
pesos or whatever the case may be.
So it's the I the beholder, and looking at the facts.
And the facts tell a different story than the initial way
Americans might view emerging market exposure.
So take us through the experience of an investor on the
platform, right? So they've got $1000, they want
to invest it. They go to energy.com and they
register and set up a profile and do they immediately get a
basket of all of these countries?
Can they invest in one country? You know how does How does this
work? So we basket it like if you if
we had a skew in SKU, like it would be an individual
investment thesis. So I have a thesis around
community solar in Brazil. I have a thesis around private
credit in Colombian solar. I have a thesis around energy
plus storage in South Africa. Each one of those is a product.
The way we look at it and the way to use the the platform the
best is to get a mixture of those products, which we call
the energy a core. You want to get diversified?
Yeah, sure. Today's Brazil's a 14 and
Africa's A10. But you know it's a long term
investments that we want you to compound this for 20 years.
So in order to protect yourself from changes in those rates that
we're getting today, we want you to diversify and most of our
customers do. But some customers, you know,
maybe you're from Brazil and you just really want the Brazil
product because it reminds you at home, all right, you can just
buy Brazil. Or maybe, you know, you're risk
taker and you just want that 14 and can't get it out of your
mind, Then you just go for Brazil.
But you can also choose to blend it together.
It's really up to their discretion.
So here's the math. I think that should make people
realize this isn't just democratization for its own
sake, right you? If you have a normal $500
million infrastructure fund, there's no chance that they're
going to do a $5,000,000 solar project in South Africa.
It's too small. Due diligence costs eat the
return. But if 5000 people put $1000
each, they can fund that exact project, right?
So. So what's the structural reason
why you can do this and a $500 million infrastructure fund
can't? I think that as check sizing at
check writing ability increases, you need to start looking for
larger assets. If you don't start from where we
started from. Remember I'm a CNI solar guy
through and through and I've been doing those portfolios of
Walmart's like we were talking about earlier.
You kind of trained me how to treat many bespoke projects as a
large institutional type of investment.
So we cluster things really well where we have a lot of software
assistance on our due diligence. We push a lot of the the
laborious parts of due diligence back on the developer like you
tell me you know how the interconnection is working
rather than us figuring it out. And when you've told me to my
satisfaction then we'll read it. So that's all software enabled
due diligence efficiencies. So we try to gain those little
efficiencies wherever we can, so we can stay in that middle
market segment because we think that's where the largest yield
opportunities are. These are the abandoned
segments. Institutional capital can't and
won't find these opportunities, which leaves very few competing
investors, and that's where our money gets the best return.
I'm hearing a lot of trial and error that you clearly have like
a very strong overall thesis about how your product will work
and where the sweet spots are in terms of your projects.
But the platform didn't take off overnight.
So walk us a little bit through the early years.
What wasn't working? What assumptions did you make at
the beginning that turned out to be wrong?
And how? Like, at what point did you
really start to make some traction?
Yeah, I don't view it that we were wrong or that it wasn't
working at all. I actually felt that it was
absolutely going to take grueling years of scaling
slowly, inch by inch before we got a critical mass underneath
us. And that's exactly what
happened. And I felt that we had to
prepare for the long road ahead when we started at Energia and
the way that we got through those earlier stages, while
we're ramping up, every day another investor comes in.
Every day hundreds of new investors come in.
It's really exciting now, like, but to get here was a process
where there wasn't enough money to manage to pay fees to us that
would keep the lights on. So we had to do like side
missions and we would do these quests.
And for example, Jigger came in and he did an investment with
us. We did a deal with Brookfield,
we did a deal with BTG Pactua, we did a deal with a listed
trust in the UK. And these are just more or less
side hustles because we're capable of doing institutional
Capital Management. We use that as a bridge to get
to the point where we could live exclusively on our retail
investment products. And we're there now.
We've cut the umbilical cord about two years ago.
I don't think you'll see Energia giving tailored investment
products to large institutions ever again.
Everybody comes in through the front door now because we have
enough assets under management to keep the company profitable
in perpetuity. And what you really want to do
is service our base of clients and give them the best user
experience and most transparency we can and and now we get to do
that. So help me understand, you know
who the typical investor is today and where it started,
right? Like so you know, was it a
climate investor, an impact investor?
Was it a grandmother that wanted a higher yield on their fixed
amount of savings? Like you know what is the ideal
profile? Well, it's, it's pretty funny.
It kind of like, looks like me. It's, you know, they're like a
46 year old, slightly overweight balding guy with a couple of
kids. But our, you know, our average
investor is in their 40s. It leans slightly towards males.
They're probably from one of the coasts or Texas, lot of
investors in Texas and they're educated.
They want, they understand that energy infrastructure is a
rational asset class that has different characteristics and
complementary characteristics to their stocks and bonds.
And when you get it, you get it. And when you get it, you're
going to be a client with ours for a long time.
We have something like a 98% retention rate.
So very rarely does a customer sell their stock, even though
anybody can click a sell button at any anytime they want.
And people stick around because these guys are interested in the
power of compounding yield. You know, for me, I use the
platform as a father to prepare for my, my kids college tuition
down the road. And I want to start putting
capital to work that's going to compound.
So, and I have 20 years. My, my youngest is 4 years old.
I got plenty of time to snowball something for his college
education. And I think I don't know what
purposes my clients use their money for, but I would imagine
it's long term planning. So I imagine that this asset
class is not correlated to the stock market here in the United
States. So this is, you know, I would
imagine like a separate asset class somewhere else to put your
money kind of like I have some money in like in art, for
example. That's right.
I we view it as very complementary to a stock.
I mean, I wouldn't bet against America and American businesses.
So. And if you look over the last
five years, the S&P 500 has smoked Energia while we've done
a very respectable 12% yield. The S&P 500's done better, but
it will always be like that. And there are times when the
stock market can't sustain an overheating phase, whereas our
assets don't really have that. Our assets sell power, they're
steel in the ground. So we look at them as real
assets. Our contracts are inflation
adjusted almost always and that's a huge benefit and that
has nothing to do, no presidential tweets or other
market condition or hurricane. You know that those things don't
change my customers obligation to buy power from me and the
price of which I charge them. So I like the lack of
correlation and I think our customers do.
And I'm not proposing everybody goes 100% solar the way like I
am. I think that people probably
should sleeve some of their investment strategy into a real
asset class that's inflation adjusted and connected to power
rates like Energia. So it belongs in your portfolio
and to what degree is really up to your planning strategy.
And most people view this as real assets, right?
So it's similar to like investing in real estate or
other real assets, right? So they're not supposed to beat
the S&P. They're supposed to be a
diversification play, you know, like, I guess it's it's also
probably pretty good in a Mad Max situation, right?
I mean, if we get to the end of the world, who are going to need
that solar power off, you know, those, those.
And so I think, you know, those are real assets that I want to
hold. Yeah, and I have.
What I'm debating right now is energy prices are going to go up
steeply. Generally, they go up a little
bit faster than the consumer price index inflation.
If you look over the last 20 years, energy's a little bit
faster inflation than a basket of general goods.
I think that's about to sky rocket and and you're going to
see energy out in flakes, CPI by leaps and bounds.
And for that reason, this instinct of ours to always have
your energy price permanently hedged through a power purchase
agreement over 20 years, that's losing its advantages because
maybe I don't want to be so nailed down to today's energy
prices with an escalator. Maybe I want to take some
exposure to markets and see where energy goes.
So we're trying to find ways to responsibly hedge that a little
bit and take some projects that are open to market exposure and
then nail some others down with credible contracts.
But that's the key to really making money in this space is
acknowledging where we're at in energy as a globe.
And so you must get all sorts of crazy questions that come in
from the investors that, you know, want to invest any like
really interesting questions come in from retail investors.
I mean, my client base has an obsession over batteries.
So I get asked the battery question a real lot.
And I've been pushing back against batteries since I
started in this industry 20 years ago when everybody said
batteries were coming right around the corner 20 years ago.
It's the bacon of the grid, Mike.
The bacon of the grid. Mike, I'm just warning you
before you get started here. Well, maybe I should keep my
opinion to myself, but. Never.
We'll see. We'll see.
But I think batteries, the market tells you when batteries
are needed and it tells you that through the delta between peak
pricing and off peak pricing. And when that delta gets big
enough to amortize the cost of a battery, call me up.
I'd be happy to invest in a battery with you, but I don't
know too many markets that have that condition right now and
batteries aren't amortizing. The more common way people sell
batteries is as battery backup, you know, to reduce
intermittency or access to energy.
So South Africa, we, I have a ton of batteries in my South
Africa portfolio. Makes sense the grid was off 6
hours a day, but that's a completely different use case to
the one people actually imagine. The fervor over batteries is
actually over shifting entire grid, you know, energy over
time. Well that it hasn't really taken
off anywhere to any sustainable degree yet.
So that's a question I'm always kind of defending myself
against. Why I'm not, you know,
gangbusters and big batteries right now.
It's because the the price hasn't signaled that I should
be. So in the US right now, the
whole conversation is about gigawatts.
How do we power data centers? How do we keep the lights on for
AI, electrification, etcetera, etcetera.
And of course, that's a real problem.
But in a lot of the world, people don't have reliable
electricity at all. You mentioned that.
So pick one, energy, a project who's getting power today that
wasn't maybe three to five years ago?
And what does that mean for them and for their lives?
So our projects range from like one kilowatt on a pedestal with
a battery all the way to 75 megawatts in South Africa
feeding the National Grid called S com.
So we have a huge range of use cases for the types of solar
that we do. But to give you like one
example, I'll give you 1, where energy is desperately needed in
our Columbia portfolio, which has recently launched.
It's really gaining steam. People really like the product,
and that is mostly a debt vehicle.
There's some tax reasons why instead of buying solar energy
projects in Columbia, we lend money to projects instead.
And projects are collateral. Yeah, I love solar projects as
collateral because I know exactly what to do if I need to
step in there and take control. But it's more tax efficient for
me to lend them money. And in this case, you have about
250,000 households in Colombia that don't have access to
electricity. These are in states like
Laguajita and kind of remote parts of Colombia.
And there's a program where the government has promised to pay
me an amortizing rate if I install a small solar plus
battery system for those households.
And we've done, you know, not us, our development partner,
they're called Helios, a wonderful company.
They've done 20,000 of them so far.
So it's really impactful. And and what these people do
with electricity is fascinating. But you know, we can have a
whole podcast just on these use cases of off grid solar, but
that's just one example. And we're not, you know, here
just for the impact. The impact is inherent from
doing great business deals with energy.
Yeah. No, I mean, I think there's
close to 700 million people in the world that don't have access
to basic electricity. And I think what you're doing, I
mean, folks like Sun King, others, I mean, truly inspiring.
And, you know, I think solar is the fastest way that we're
getting those 700 million people the basic energy.
I mean, there was no plan to bring a transmission line out
there, I can tell you that. And you just have to drive it
out there and some solar panels in a truck.
That's how you get power out to those locations.
And it works and it works really well.
They pump water. They make more handicrafts.
They, they, they buy electrical devices.
It's really exciting to see what happens when communities get
connected to the grid because, man, they're going to fall so
far behind so fast in this modern world that we have.
They got to have electricity. We just did a school project in
Kenya. This is a school. 700 kids go to
the school, 400 of them sleep on the floor of the school because
they walk so far to get to the classroom.
They had no electricity. You know, how are you supposed
to participate in the modern economy?
And it's possible that a kid from this area of Kenya could
get an IT job. Why not?
You got fingers. You can code.
You can participate on the Internet in any profession,
unless you've never seen a computer before or know how to
use the Internet. And these are bright kids who
work hard and want to learn. So giving access to electricity
is AI. Think it's a pretty important
thing. So just to finish up, I want to
understand where your business is now.
So you've got about $500 million worth of assets under management
now, which is a huge number of assets.
I mean, it's truly impressive. Congratulations on that.
Thanks, Jagger. A lot of people deem it really
small because they're thinking about the trillion dollar
industry and the trillion dollar energy problem.
But like we're really proud. That's a lot of projects.
You're right and and we're just starting.
And how many investors is that? On our platform with about
19,000 people who have accounts, but not all of them have
invested. So it's it's probably about 80%
of that are investors. That's awesome.
And and when you think about
where you're headed from here, right, you're adding like what
approximately every quarter to the.
Right now we do about 5,000,000 bucks a month.
Wow. Yep.
That's a lot. That's not bad.
It's, you know, because you can, if you lever that, do the math,
it's $75 million of equity. You could, oh, I mean, it's
amazing. And you know, one, one of the
thing I was going to ask you about is, you know, you've got
this massive dislocation with the Straits of Hormuz.
A lot of these countries that you're working in are using
diesel, right? And the solar is coming in to
offset diesel. How have you thought about your
business, you know, in this time of like, just huge disruption
where people's lives are just being turned upside down with
rationing, frankly. This goes back to this argument.
I think in the United States right now, there's this concern
that solar's best days in the past, and it's just so wrong.
And then I tell people that 80% of all new power generation
worldwide for the past five years has been solar.
And they're like, really? I didn't.
I didn't know that. Yeah, it's all solar.
When we talk about energy, we're talking about solar energy and
nothing other than that. And that's not really.
Batteries in there. Well, it's not a generation
asset, but yes. Man, man, you were playing hard
to get. I like it, Yeah.
No, I've been I've been told this battery thing for long
enough, but the we'll, we'll see where we're going to need
batteries undoubtedly in huge quantities and I invite it all.
But we're talking about solar is the number one most important
technology in our world right now and it is necessary for AI
to matter. So you could argue that solar is
more important than AI and it I can't imagine not being able to
do a solar project in every single country in the world.
If you said, Mike, I want a solar project in Uzbekistan, I
could pencil it because it's just works everywhere now.
It's such an exciting time for our industry, despite, you know,
the noise and sort of the anti solar sentiment that may be
around our our marketplace. It's it's not affecting what's
going in the ground. That's when I think about the
Straits of Hormuz. It's just another point that
makes me more right that solar's best days are in front of it and
there's so much work to be done. So we're right where we want to
be. Now, well said.
And then in terms of talking to the 19,000 customers and getting
them to, you know, get their uncles and cousins and others to
like invest, etcetera, like what works?
Like what is like, you know, because you've tried all sorts
of messages I'm sure over the last like 5 years, like what
works to convince people to invest.
OK so first thing that doesn't work.
I could tell you that like we did NPR podcasts and we played
advertisements for like 3 months.
One out of every nine NPR podcasts played our
advertisement and we got 00 investors from it.
I was like wow, I everybody would have thought that would
have been wildly successful. Then we did like, you know,
Climate week in Central Park concerts with 35,000 fans all
seeing our video 0 did not have it didn't work, it didn't work.
So you don't know what's, you know, different companies have
different success in different places and, and for energy, you
know, what's really worked best is like consistent dividends of
a group of die hard early adopters.
Word of there's apparently word of mouth in a lot of this stuff.
And yeah, we're doing a, we bend over backwards on transparency
and webinars and reporting and it's organic growth.
And I kept on saying, you know, we're one minute away from the
right text or the right tweet from blowing energy sky high.
And I'm convinced that that's actually not how we get there.
We get there from the daily grind, you know, 1 foot in front
of the other and watching this thing snowball as it is.
And that's good enough. And it's really exciting to just
watch that because that's actually pretty dependable that
it's going to grow 57% of years. That's ample.
Yeah, I mean, you were on the Volts podcast.
I mean, Dave Roberts is a communist.
How many people like, you know, like joined Energy after that?
That it was a wildly successful podcast because that audience
understands my those messages. In years make money.
I'm telling you like they call themselves socialist, they want
to tax us all, but I mean they want to make money they want to
make money on solar power. I love Dave, he's so nice.
I'm doing. Good.
They want to make, they want to make money doing good.
And that's, that's what I love, love about what you're doing,
Mike, is that you're making a real difference for people.
And I just think about those kids that can, you know, read in
the evening and like do their homework and study and have,
will have access to so many more opportunities in their lives
because of the work that you're doing.
And I think it's it's really powerful.
Thanks so much Jamie. Like we have this debate going
on in our business. We started off we call one point
O and all of our stories were about the impact and how cool
this could be if we gang tackle these problems.
You know, that was the mission. And then we fed said, you know
what, we don't quack like a duck for these wealth investors, the
family offices and the registered investment advisors,
we have to look a little bit more like the products they're
used to seeing. So we call 2 point O and we kind
of put, you know, went out and bought a suit and kind of
figured out how to put together our marketing materials and
things that correspond to normal products.
And then we feel like we've gone too far there.
And I'm getting a lot of communications from our clients
saying like, don't shy away from the impact that you're having,
like that's it's OK to talk about those things.
And sometimes I feel like I don't want anybody to think that
I'm any less fit financially as a fiduciary because our projects
have impact and I'm not taking wild risks with your money.
People's money is important to them.
And so I don't want to give that impression, but damn it that we
do have a huge impact too. Absolutely.
And that's why it's important to talk about all the benefits,
because you don't know what benefit will resonate the most
with a given prospect, right? So.
For for some audiences, they do want to hear about like for
women, right? You know, you said that, that
people in their 40s slightly more men, but like for, for
female investors, I imagine that impact work that could be really
important. I know for me that's that's
powerful and motivating for me as well as that risk management
and diversifying outside of like my standard like 401K, IRA
etcetera, etcetera. Yeah.
I mean, it's why basically everybody in the solar energy
industry is in the solar energy industry.
You know, we, we had, we had an interest in doing something
about a problem and it's that impact story resonated with us,
right, so. I mean, I'm trying.
To find that balance. What I've heard is the right
uniform is a golf shirt. You know, you go to the golf
course, you're like, hey, let's go play around.
You know, now you've got him like trapped for three hours and
you're like, all right, let's do it.
Although I don't think the the private equity vest pretty early
on. I did.
I I always had that Silicon Valley vest.
That was my look. For a long time and then he was
doing sweaters for a while and now we've moved to the button
down. So he's on just like he's just
wrapping the just like a lot of Plaid button down season.
I mean, I got a lot of women around me trying to make me look
better, so. He's a uniform dresser he likes.
He likes a copy paste. It works really well for him.
It's just if you open up his closet, it's just a row of
yellow and blue striped Plaid shirts.
Exactly, exactly. Well, Mike, it was such a
pleasure to have you on. It has been so good to see what
you've built here and how much good you're doing in the world,
especially at this important moment in time when, frankly, I
think there's a lot of projects that need the love that you're
providing that frankly a lot of folks I think have just not
taken a second look at. And I'm really glad that you're
there to take a second look at them.
Thanks buddy, happy to do it. Thanks for having me.
Energy Empire is supported by S2G Investments.
If you haven't checked out their podcast, I highly recommend it.
They have a great recent episode on the long term effects of the
Iran war and the blockade of the Strait of Hormuz.
In the episode, Sanjeev Krishna and Franco Sullivan and Bala
Nagarajan make a compelling case that this disruption could be
the most powerful accelerant for renewable energy in a
generation. And in future episodes they'll
be exploring how those forces are reshaping our food systems
and ocean intelligence. Sound interesting?
Go find the S2G podcast and start with the global energy.
Order has changed, now what? Wow, that was a lot of ground
that we cover with Mike. I know, I mean, we keep having
these guests on that make me be like, oh, I need to write this
down. And then afterwards I need to go
look this up. I mean, I again, another guest
that's got me fully convinced that I need to go take action to
go, I'm going to go set up an account on energia.com and look
into diversifying in this way. Like I mentioned on the episode,
I have some money in the art market and I'm always looking
for like interesting diversification options.
So I know that Mike said that his average customer is a male
in in their 40s, but I hope more women, You know, I encourage
women to become very active managers of their financial
futures and their portfolios. But this seems like a really
tangible way to diversify your portfolio, earn really solid
returns and also make an impact. I mean, I was very moved by the
stories of some of the projects that he's helped to build.
Yeah, it's going to have to be want to come for you, want to
come for your daughter. You're going to have to like,
forget a way to like, you know, get it to 5050.
I was also fascinated by the fact that he's using the JOBS
Act that would passenger Obama. I remember when it passed and it
was like all about how people could, like, do venture capital
right at smaller dollar numbers and all this other stuff.
And I was like, is this really ever going to work?
And then I forgot about it. And then like Mike obviously,
like picked it up out of the ashes.
They created this extraordinary platform like using that.
That's amazing. I was really not expecting that
Obama shout out, but that's great to hear that that product
works and that, you know, it's, it's created like a powerful new
opportunity for people, average people to invest in markets like
this. The other thing that Mike said
that I was really struck by is that he said that the
ethnocentrism that is such a common feature in America really
holds back some investors because they perceive that these
emerging markets are are too high risk and that he's just not
finding that to be true. And it's really encouraging
people to take a harder look. I thought that was a really good
point. Oh, he's absolutely right.
I mean, when you think about just how valuable these solar
projects are in these countries because they're competing
against diesel, right, that you can make much higher returns.
And just because the returns are high doesn't mean the risks are
high. Like, I mean, I invested in
Brazil with Mike back in 2019. We developed a whole bunch of
projects and then we sold all those projects to Brookfield and
Brookfield is as hard nose as they come.
So like in general, they look at all the risks and bounce them
carefully, right? So I think that, you know, a lot
of this is people believing that emerging markets are risky
because they're emerging markets.
And the other thing I found fascinating was he was using
using advanced AI tools to help him with some of the diligence
to be able to do some of these smaller projects, which I'd
love. Yeah, absolutely.
I think that's a that's a great efficiency for a company like
this, particularly that is operating in so many very
diverse markets that are maybe sometimes unfamiliar.
Yeah. So, I mean, I think right now,
particularly given the disruption from the Strait of
Hormuz, the supply disruption and all of this new data that we
have that shows that electrification really is the
solution that so many of these countries are embracing very,
very quickly, I don't think that these trends will reverse.
And so investors, like US investors can, can get a piece
of this action and also like help to do good and electrify
schools in Africa. And I mean, it's, it's really
powerful. It's a win, win, win.
And I'm really excited that they're they're getting so much
traction and having so much success with this platform
after, as he mentioned, kind of others have failed.
Well, if you're inspired to invest in energy, like join me
on the comment section with the YouTube channel.
I think it's going to be fun to see all the comments we have on
the YouTube channel and like talk to people about, you know,
how this strikes them because I do think this is an inspiring
story. And as you suggest, it's so
mixed and complicated because some people view it as crazy
risky, some view it as so impactful, and some view it as
both. And, you know, I, I just think
it's going to be fascinating to watch how, how his platform
grows. Absolutely.
And also I just want to say we'll drop a link in the show
notes if you want to go sign up for an account on the platform
and get involved. And as Jagger mentioned, the
minimum investment is only 100 bucks, which is such a great way
to just dip your toe in and and learn about the tool and see
what it's all about. So I'm doing that.
I'm doing that after we after we sign off.
Me too. All right.
Well, Next up we've got the Ask Jigger segment sponsored by
Octopus Energy. Super excited to be doing it and
hope you enjoy. Welcome to Ask Jigger, a weekly
segment on Energy Empire where Jigger answers your energy
questions. If you want to submit a
question, the link is in the show notes.
All right, let's get into it. Our first question is from Bobby
Lewis. Bobby says solar plus batteries
make up an increasingly large share of new capacity.
Is this a wave that domestic solar panel recycling can ride?
Is crystalline silicon recycling a solved problem with companies
already creating a domestic supply of recycled aluminum,
silicon and silver? Or is the window still open for
new startups? Well, gosh, thanks for that.
Great question. The window is always open for
new, awesome startups. And so even when you've got
established players, it's always open.
But we absolutely saw a lot of startups come online in the last
few years to recycle solar panels.
And several of them got big grants from the Biden
administration. And, you know, the domestic
solar recycling didn't show up, right?
So they were built because a lot of the 14% efficiency solar
farms, we're going to get re powered with 23% efficiency
solar panels. But people haven't started doing
that yet. So the solar recycling
facilities are ready to go. And people are still trying to
figure out whether they should replace all their old solar
panels with new solar panels. And so we'll see where it goes,
but it is going to happen. The economics of replacing all
those super old solar panels with the latest and greatest
technology are just too amazing to pass up.
And so I think you'll see a lot of recycling happening in the
next few years. OK.
Our next question is from Virtuio, just Virtuio, one word
name here in New Mexico. Blackstone has proposed
acquiring Public Service Company of New Mexico, our largest
investor owned utility. Some ratepayers worry that
private equity ownership would prioritize financial returns
over public benefit. Others argue the utility needs
significant new capital to modernize the grid and meet
growing demand. 1/3 proposal would have New Mexico's
sovereign wealth fund acquire a large minority stake, giving the
public more influence over utility strategy and opening the
door to reforms such as performance based regulation,
incentive structures tied to outcomes, and greater use of
distributed energy resources. If you were advising New Mexico,
this feels like this is like your beauty pageant question
Jigger. If you were advising New Mexico,
which approach would you favor? Well, I mean, let me try not to
step in it. You know, look, I think that
when you think about an electric utility, the main reason why an
electric utility has a monopoly is to be able to raise the money
it needs to be able to provide all the upgrades required to
meet economic growth. Public Service of New Mexico is
a tiny company. And so when you think about all
the data centers that are going into New Mexico and all of the
renewable energy opportunities that they can unlock from
geothermal to nuclear to solar and wind and battery storage,
they just need a lot more money. And the public markets are not
willing to give them a lot more money because of the way it's
structured. And so the reason why Blackstone
and BlackRock and JP Morgan's infrastructure fund and others
are trying to get into this business is not because they're
bad. They're just as private sector
as private sector owners of stock in a publicly traded, you
know, utility company. It's the same owners.
It's just that that structure allows you to put a lot more
money into the utility in a much more straightforward fashion.
So if you look at Elite in Minnesota, they were just sold
to private equity. That private equity firm has put
in more money $500 million into Elite in this past 12 months
then that company has raised in the last 10 years.
And so that is what is required from these new partners.
So I think when you think about the third proposal which is New
Mexico sovereign wealth fund acquiring a large minority
stake, you can do that that's similar to like NYPA for
instance in New York or other very large public policy state
owned entities. But then you know that debt is
basically the state of New York stat, right.
And so the question is like, if you do that, do you want the
state of New Mexico to have to put up all the debt to fund all
of these upgrades? And if you do, great.
But I don't think I'm for one over the other.
What I'm for is that we are in a place right now where New Mexico
has a crap load, I mean, technical term of geothermal
potential. And we need to unlock that
potential. And so whoever can bring all
that money to to New Mexico to figure out how to unlock that
potential is going to be my best friend.
Love it. That's a very exciting way to
look at it, the geothermal potential.
OK. Our next question comes from
Nicholas Birkhead. And Nicholas says, when I
learned that there's still about 190 gigawatts of coal online in
the US, it really moved my opinion on natural gas.
Would you support building 190 gigawatts of new gas to replace
today's coal fleet? If not, what number would you
support? Well, I think when you think
about our coal fleet, the vast majority of our coal fleet was
built before 1985, right? And so it's old.
And so even though the secretary of Energy is, has written all
these what they call 2O2C letters that are forcing coal
plants to stay open, even though the utility companies want to
shut them down because they're just too expensive to run,
those, you know, 2O2C letters are actually costing ratepayers
money. When you look at what's going to
happen over the next 10 years, the vast majority of those coal
plants are going to retire because they're just too damn
expensive to run, right? It's not emissions, it's not
climate. It's just they're like 70 to $95
a MW hour to run. And when you saw that the Trump
administration tried to force Arizona Public Service to keep
their coal plants open, Arizona Public Services, like we're
accelerating the decommissioning of these coal plants.
We're not going to do that. So I think a lot of these are
going to go out of Commission just because they're old.
In terms of natural gas, remember we have 600 gigawatts
of operating natural gas in this country, about 100 gigawatts of
that is old. It was built pre 1995.
And so it uses about 30% more gas to produce the same MW hour
as a modern turbine does. And so when you take all of the
gas turbines that the data center companies have announced
that they're buying for their growth, that's like maybe 50
gigawatts worth of new gas. And most of that is behind the
meter that's going to run maybe 100 hours a year, 200 hours a
year. Like we're on track to having
less total amount of gas production in this country in
2035 then we have today, right? And so I feel like this is a
trick question, right? Our coal plants are retiring and
our natural gas fleet is getting old.
And so it's retiring and we're replacing it mostly with solar,
wind and battery storage. And hopefully geothermal and
nuclear come online fast. But, you know, like most of the
gas plants that are coming online right now are not
designed to run 24 by 7. They're designed to run as
peaker plants when the grid needs them for, you know, a few
100 hours a year. I'm relieved by that answer, so
thank you for that. OK, our final question comes
from Reddit from the user Zigzag.
How likely is it the geothermal becomes a significant source of
electricity production in the Western US?
And why does development of that resource seem so slow?
This is a great question and one that is really confusing in
terms of how power plants are developed.
So one of the reasons that Fervo is a publicly traded company and
is doing so well is that the US Department of Energy funded
something called Forge. And Forge is a research and
development site in Utah that, you know, basically took a lot
of the best practices from the fracking industry and showed
that it could be used for geothermal.
And when you think about what happened during that time period
is that the Department of Energy basically developed hundreds of
millions of dollars worth of data from what's happening in
the subsurface of Utah. And Fervo was smart enough to to
sign up all of those sites in Utah.
And so they've got a lock on that, that, you know, state if
you were to unlock New Mexico, then someone who would have to
spend $200 million of speculative money to do drilling
across the state of New Mexico to create that data set.
And then you have to spend another $3 billion to build out
all of the geothermal projects, right?
And so a lot of people are having pause around whether they
want to put up that $200 million to unlock the $3 billion.
In the case of Utah, it was mostly the Department of Energy
that put that money up. And so one of the things that
you can imagine might happen in a future Congress is that we
actually allocate another $200 million from the US Department
of Energy for New Mexico, for Arizona, for Nevada to unlock
those states, right? And there's that new Mountain
West geothermal initiative that our friends at Constructive are
running in the western States and was I think it was kicked
off by Governor Spencer Cox from Utah.
And so, so that's what makes geothermal slow, is a lot of
people are really hesitant to put up that $200 million to
really unlock all the data around what's happening in the
subsurface. And so until we get that
unlocked either through private sector capital or through the US
Department of Energy, which is my preference, you're going to
see folks move super slowly. That makes so much sense.
So I'm just going to tack on my own question here.
Do you think there's any chance that we see a mobilization of
that funding from DOE under the Trump administration?
Or will we have to wait for a future administration with
potentially slightly more sane energy policy before we see
something like that? I think it's quite possible.
I mean, the Trump administration basically has carved back a lot
of funding for other priorities, right?
That was awarded in the Biden administration.
So they're sitting on a bunch of cash.
And my sense is if they went to Capitol Hill and asked for
permission, which they seem to have a hard time doing.
But if they did that, the, you know, U.S.
House of Representatives to the Senate would say, oh, we don't
have to allocate new capital. We just need you to be able to
reschedule some of this capital that you're that you have
sitting around for this purpose that they would say, yeah, go
for it. This is great, right?
And so. Part of my frustration with the
Trump administration is that I think that some of the things
that they're doing are interesting, but I feel like the
follow through from the press release just isn't happening in
the way that like unlocks private sector capital.
And so I I hope that their follow through gets better.
Great. Thanks, Jigger.
Thank you and thank you to our friends at Octopus Energy for
sponsoring this segment. It really is very important that
we're getting big name supporters like Octopus Energy.
So thank you very much. Thanks everyone for listening.
As usual, you can find us on Apple podcast, Spotify, and of
course on YouTube where I think we're getting our most new
listeners so and I guess watchers.
So thanks everybody for joining us and thank you so much to our
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