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What's REALLY Holding Back Solar Energy's GROWTH | EP304 · Clean Power Hour

• 0:50
  Jigar Shah: Nobody wants to work in, you know, coal right now.
• 0:53
  Jigar Shah: They want to work in clean energy. But it's just, it's one of those things where political power doesn't just come from money. It comes from people recognizing that there's a level of pride that we need to have in our industry, and that pride spills into like having a float in the parade that's clean energy related, like going to the county fair and having a booth there at the county fair that's clean energy related, right? All of those things require an investment of time, right? And we need to keep investing that time and 10x it.
• 1:30
  intro: Are you speeding the energy transition here at the Clean Power Hour, our host, Tim Montague, bring you the best in solar, batteries and clean technologies every week. Want to go deeper into decarbonization.
• 1:40
  intro: We do too. We're here to help you understand and command the commercial, residential and utility, solar, wind and storage industries. So let's get to it together. We can speed the energy transition
• 1:56
  Tim Montague: today on the Clean Power Hour, I have a very special guest. He's a returning guest. He's best known for deploy, deploy, deploy. We're going to talk about subsidy free clean energy in America. Yes, it's possible. Welcome to the show. Welcome back to the show.
• 2:10
  Tim Montague: Jigar Shah,
• 2:13
  Jigar Shah: thanks for having me. It's always great to be you know, metaphorically back in the Midwest,
• 2:20
  Tim Montague: Indeed, indeed, you grew up in Illinois. I hope our listeners know that by now, and I'm very proud of that, that you are a son, almost a native son, almost we missed one year.
• 2:34
  Tim Montague: We missed one year. That's just not right.
• 2:37
  Jigar Shah: That's all right, that's all right.
• 2:39
  Tim Montague: So Jigar. It's, as we were saying. It's a very dynamic landscape in the solar industry today. Here we are recording in August of 2025 the obbb is perceived by some to be a wrecking ball, but there is light at the end of the tunnel.
• 2:56
  Tim Montague: The cost of solar and batteries is coming down as the energy transition progresses. It's astounding. Jigar. I looked at ERCOT just last week, and their grid is now 50% wind and solar and batteries. When you look at those three resources, it's a massive amount of clean energy we have on a very big red state.
• 3:18
  Tim Montague: So there is light at the end of the tunnel. But what is your take on the current state, and where do you think the puck needs to go?
• 3:29
  Jigar Shah: Well, I think we have to start by recognizing that the O triple B exposed a political fragility behind our economic success for sure, right? Like we're delivering cheaper, better at scale, dramatically, you know, like we've expanded our employment base, but we have dramatically under invested in political power building right. And when I mean political power building, I don't mean Democrat or Republican. I just mean political power building right.
• 3:59
  Jigar Shah: When you're in a county, do the people who live in that county support your project? Have you thought about investing in them and educating them about the benefits of the billions of dollars of local property taxes, local employment that's happening, right, the donations that we're doing to the boys club or to Boy Scouts or whatever it is that we're doing, right? I mean, have we really thought about what it means to be a political animal in this time, right? Because we do lots of nice things for people all the time. But then when it comes down to passing the O triple B, there wasn't a single Republican right of which 20 some like it signed a letter that withheld their vote for the O triple B until our provisions. And I think that just so, I think we have to start by recognizing that it really exposed this fragility, right? And so I want to make sure that we start there. Then I think we separately have to acknowledge that our costs have come way down, right, like we really are an amazing success story of Technology Commercialization.
• 5:12
  Jigar Shah: And when you think about what is happening around the world, incentives are starting to go away, including in China, where they just removed all the incentives for solar this last month, right? And so we're in a place now where we have to transition now I wish we, wish we would have done this more thoughtfully and less cruelly, but I think that we do need to transition now to a period of time where our resources are properly valued by the system, and, you know, not having to depend on subsidies.
• 5:47
  Tim Montague: Well, let's talk a little bit about the IRA because. Is I lauded the IRA as good industrial policy. It did incentivize the onshoring and reshoring of factories. We now have nearly 50 gigawatts of solar panel manufacturing going on in the United States, I think, largely thanks to the IRA. Now, simultaneously, when the IRA gets scaled back, we see factories disappearing off the roadmap, right? There's as many factories leaving as there are coming, it seems like right now, which is a problem for a variety of reasons, which we'll get into. But what was the flaw as you see it, with the IRA.
• 6:34
  Jigar Shah: Remember the O triple B left in place, the vast majority of the IRA, right? And so I don't know that there was any flaws in the IRA, right? We talk about bluster, and I love the fact that, you know, Donald Trump gets, you know, to, sort of like, set the agenda within the media, but all of the 45x incentive programs were left in place, right? So, and the same thing is true for a lot of the 40 8e incentives for, you know, nuclear and geothermal and hydro and batteries, right? So, so the vast majority of the IRA was an enormous success story, right?
• 7:11
  Jigar Shah: So I think, like, it's amazing how narratives sort of get reworked in real time. I think that, you know, when you think about domestic manufacturing, this was something that was started with a conversation around tariffs in 2012 under Obama. Obama then doubled down on those tariffs in 2015 Trump then supercharged those tariffs during his first term, Biden made quite clear that Buy America was his like main mantra, right and domestic supply chains, we passed 45 acts, which then led to q cells building their huge facility in Dalton, Georgia and And, you know, Helene and all these other companies have done this. And to your point, we had a lot of module manufacturing that got installed in the United States, such that by the end of next year, almost 80% of all modules used in the United States will have been finally assembled here in the United States, right? And so I think that's a huge success story. And I don't know what you meant by as many people leaving is coming, but those, I think, are just announcements, right?
• 8:17
  Jigar Shah: The people who've put steel in the ground, which has already happened, I think, are changing hands, like so some of the Chinese investors in those plants have sold to American owners to change the color of those manufacturing facilities.
• 8:32
  Jigar Shah: But I think that the main thing that I see is that a lot of the solar industry is still not committed to these domestic supply chains. So when you ask them, Are you signing long term contracts to buy modules or inverters or other major equipment from domestic sources, they're saying, we're taking it day by day. That's not a clear signal to the people that are manufacturing here that you support them. And I think that's it's going to be really important to for the industry to realize that there is a very bipartisan pattern of support for domestically manufactured goods and services in the solar and wind industry. And the wind industry has been domestic for a long time, but the solar industry as well, and I think you see that with the FIAC rules that are coming in the foreign foreign entities of concern rules. And so I think all solar companies are going to have to think long and hard about what it means to sign long term contracts for domestic content.
• 9:37
  Tim Montague: Yeah, and there is a segment of the the utility solar segment, is certainly in a position to do that, to sign long term contracts, C&I installers and residential installers, I don't really see necessarily, unless they're operating nationally, unless they're really big players, which there is a handful of. But I think it remains to be seen if they will survive, like you've seen many national players go extinct in the last 24 months.
• 10:04
  Tim Montague: So it is, it is a very dynamic landscape. And yeah, if you just, if you just look on Canary media about solar factories or clean energy factories getting canceled, there have been a number of announcements. I don't have those on the tip of my tongue, but
• 10:23
  Jigar Shah: I don't think any of those had already put steel in the ground. So I agree with you, the folks who haven't been able to raise money have not been able to raise money, and so they haven't been able to put things in the ground. And you know, the outlook for them is worse today than it was yesterday, so they're unlikely to be able to fix that. But for the folks who've already built 50 gigawatts of domestic module, you know, assembly in the United States, I mean, those are already in the ground and operating. And so I think those are already there. And I think, you know, I'll. Obviously q cells is fully committed, as well as others on the cell manufacturing side, so I think we're in good spot there. But I think when you look at the domestic supply chain for residential, I think a lot of things have to change in residential. I think you know that. I think I know that, right? I mean, clearly what the O triple B has done is gotten rid of 20 5d so that's going to be gone at the end of the year.
• 11:11
  Jigar Shah: And so the cash sale business is largely gone. If you want the tax credit, you're going to have to do it through the 4080 tax credit, which the only way you're going to be able to do that is to do it through a third party owned system. Now you might be able to do a prepaid lease, or something like that, where you're basically paying it all up front. But I think that is where this is headed. And when you look at the major third party ownership financing providers. They have certainly spent hundreds of millions of dollars to do the safe harboring of equipment over the last 12 months to make sure that they, you know, have a runway for the next four years. And so I think that that, that you know, should all be domestic content, right?
• 11:50
  Jigar Shah: And if it's not domestic content, shame on them.
• 11:53
  Tim Montague: So let's talk about what I call the clash of Titans. There's a growing demand for electricity, partially because of the explosion of AI data centers, which are growing from four to 12% of the grid in the next five years, but also electrification of transportation, electrification of HVAC and industrial processes. It's kind of a perfect storm. Meanwhile, we're putting a stick in the eye temporarily, perhaps, of the solar industry with the OB BB and trying to incentivize other forms of grid energy, but you cannot prop up natural gas power plants or nuclear power plants faster than you can solar and batteries, as far as I know. And so the utilities are caught between a rock and a hard place.
• 13:45
  Tim Montague: And we, the industry, the clean energy industry, are kind of looking at this going, how does this play out? Is it going to be business as usual? Because the utilities are just going to say, well, sorry, we're going to install a bunch of solar batteries and wind farms anyway.
• 14:02
  Jigar Shah: Yeah, I think look, you and I are business people, and so we have to make business decisions, right? And so I appreciate the feeling that the industry has today, but I think let's look at the hard facts in front of us, right? When you look at the guidance that came out on Friday, it was far less draconian than people thought it would be. And so I think today, we believe that 85% of everything added to the grid for the next three years will most certainly be solar, wind and battery storage, for sure. And so that is what's going to power this AI revolution, regardless of the talking points. You can talk about natural gas, you can talk about nuclear, you can talk about geothermal, like, you know, they're limited in what they can provide, 10 gigawatts here, 10 gigawatts there. When you think about the 60 gigawatts a year that we're going to add, it's mostly going to be solar, wind and battery storage, right?
• 14:52
  Jigar Shah: So let's just start there. Now we go back to the fact that this was a political wake up call, right? So are we going to do the same thing that we did the last six months, which is, give, you know, money to people's campaigns, and do random, you know, like, fly ins into DC to, like, talk to state legislators, or are we going to actually do the real work of building political power over the next 18 months? Right? Are we going to go into the communities that we serve today and actually remind them that that we're there, remind them that we provide political support, we financial support, that we actually care about these communities. Are we going to actually create a community trust right where we say, for the next 20 years, we are going to keep investing in this community now that we have permission to build here. We're not going to immediately forget about you. We're actually going to invest in you, right? If that occurs, then in 2026 after the midterm elections, you can imagine a lot of things getting fixed and a lot of things getting improved going into 2027 and 2028 right? But if we don't invest in that, then we'll see where our political power stands. But today, it's very low, right? And so we need to focus on what it takes to remind people that we are an industry that's not red or blue, but red white and blue, right? That we are the people who are trying to bring enough power onto the grid to make sure that we unlock all this economic development opportunity that our country has. We want to win AI. We want to win the electrification of the transportation sector. We want to win the electrification of heating and cooling, right?
• 16:41
  Jigar Shah: But that's only possible.
• 16:41
  Jigar Shah: Possible if you continue to allow the technologies that have been building 85% of everything that's been added to the grid to continue to operate, right? And so I think that, like, you know, I think people have to get their head out of the sand and understand that we are now in the crosshairs, right, this notion that we can, like, live under the radar screen and make some small tweaks at the end of the process to protect ourselves. Is not how this works anymore. You're not going to be allowed to invest $500 billion a year as an industry and invest almost $0 in political power, right? We spend 1/20 the amount of money as the oil and gas industry do on political power, but invest double the amount of CapEx that they do every year.
• 17:27
  Jigar Shah: So I hope that this is a wake up call for everybody on the other side of things, the electric utility industry is in trouble.
• 17:34
  Jigar Shah: They do not know how to meet this moment with the tools that they had from the 1970s that they're trying to use today. So they need to invest in virtual power plants. They need to invest in, you know, like grid enhancing technologies, right?
• 17:51
  Jigar Shah: When you look at this distributed capacity procurement that Excel Minnesota has launched in Minnesota, it is a game changer, and you have 10 other utility is now trying to copy it, saying, oh, instead of giving people a three year interconnection timeline for their new load, we can interconnect them in six months if they agree to flexibility, and the utility agrees to a distributed capacity procurement where they strategically place batteries in the right spots to shave The peaks. And you know, the Department of Energy showed through the VPP liftoff report that we could easily be shifting 20% of our peak load by 2030 guess who is the best positioned industry to make the most amount of money off of this trend, the solar industry. But how much of re plus is going to be focused on this topic, 5% of re plus 1% of re plus, it should be 50% of re plus
• 18:54
  Tim Montague: couple things I'd like to dig into there that's a lot to unpack.
• 18:58
  Jigar Shah: Don't get me started, Tim. I'm just getting wound up.
• 19:03
  Tim Montague: I love it. I love it. Political power, and this statistic that we're investing significantly more capex, but not putting an equal percent into political power is very troubling to me, okay, and I knew that clean energy was not investing as much as the fossil industries in political campaigns. I did not realize it was so skewed in terms of our CapEx investment. And so it does mean that there has to be some kind of a reckoning, and that there has been a certain cavalierness in the industry about, well, hey, we can get away with this without playing the game. And in America, Money talks in politics,
• 19:55
  Jigar Shah: not just money, but just like, like, investing in time. How many people in the clean energy sector. Have an account on truth social.
• 20:06
  Tim Montague: Have you been on true social? I personally have not
• 20:10
  Jigar Shah: the only people talking on true social are people who are anti solar and wind. That is the only thing President Trump is seeing. There is no one defending the solar wind industry on true social.
• 20:19
  Jigar Shah: How much does it cost to have people on true social, just like, like, providing facts on true social.
• 20:26
  Tim Montague: What is your experience on truth social? I'm just curious. I'm afraid it's a hornet's nest.
• 20:32
  Jigar Shah: It is a hornet's nest, and it is only my, like, sort of Midwest upbringing that has allowed me to stay sane. But I'm just saying we have a one sided conversation. Like, when you think about how many people in our industry have a birthday party for their child, and when all the other parents come in and they say, What do you do for a living? You say, I work in the energy industry, right? Do they say that I work in the solar energy industry? Do they say I work in the clean energy industry? Do I work in decarbonization? No, they say I work in the energy industry.
• 21:06
  Jigar Shah: Yeah. Why? Because you think someone's going to attack you for, like, being the number one source of electricity in our country for 10 years in a row.
• 21:17
  Jigar Shah: Why would they attack you for that? Why would they attack you for being the most dominant source of electricity being added to this grid in the last 10
• 21:26
  Tim Montague: years? Well, the average American has no clue about that. They
• 21:30
  Jigar Shah: have no clue. And why would they? Because the million people in our industry would like to keep their head down. You can't keep your head down. Yeah, you know, when I was a kid, I remember when I was a young adult, there was this.
• 21:42
  Jigar Shah: Show on TV called King of the Hill, right? Like on Fox. It was like a, you know, like a cartoon show. And that guy worked in propane. And no matter what event he was at, he was reminding people he worked in propane and how important propane was to the survival of, you know, whatever cooking or whatever it was, right, heating your home. I don't think the vast majority of people wear this on their sleeve. That's what we need. That's what we need, right? And you know, and I know that your children want to work in our field. None of them want to work at a coal plant, right? They know that that's not their future, right? For sure.
• 22:19
  Jigar Shah: Know that by listening to the, you know, at energy Twitter feed, but it's true, nobody wants to work in, you know, coal right now. They want to work in clean energy. But it's just, it's one of those things where political power doesn't just come from money. It comes from people recognizing that there is a level of pride that we need to have in our industry, and that pride spills into like having a float in the parade that's clean energy related, like going to the county fair and having a booth there at the county fair that's clean energy related, right? All of those things require an investment of time, right? And we need to keep investing that time and 10x it,
• 23:07
  Tim Montague: I wholeheartedly agree. And quick aside, my son does work in the solar industry.
• 23:11
  Tim Montague: Shout out to Finn Montague and Winfrey solar. He's a project manager for a resi and commercial installer based in Chicago, but and my grandpa Murphy ran the Black Diamond, which is a coal industry trade publication. Illinois is a coal state. Historically, we still have, we still have mine mouth coal plants that are digging coal out of the ground and burning it and generating grid power. We also have a lot of
• 23:40
  Jigar Shah: emissions in the country. Illinois has the highest sulfur coal in the country.
• 23:44
  Tim Montague: We have a very dirty grid historically, yeah, yeah, it's changing. It's changing thanks to good policy.
• 23:53
  Tim Montague: And you know, I was talking to Peter Kelly Detweiler yesterday on, you know, a to be released issue on micro grids. And he was talking about how this phenomenon of how people are woefully ignorant of where electricity comes from in America, and their electricity bill is going up, and it's going to go up a lot more because there is going to be a shortage of electricity in major markets like PJM and miso. PJM is the largest ISO in the country, where Virginia is and all these data centers are getting built.
• 24:31
  Tim Montague: 70% of email traffic goes through Virginia. Who knew? But that means servers in data centers, right? And that means a lot of electricity. These this infrastructure takes a lot of electricity. We want a clean, safe, reliable grid, solar, wind and batteries does that, but most people just don't understand the grid. It is something they see in the background, but they don't really understand
• 25:04
  Jigar Shah: it. No, most people don't understand the grid, and they don't understand the fact that Illinois, think their lucky stars has a ton of nuclear power, right? And it's one of the reasons why they'll be able to keep costs down in Illinois is because they have so many new nukes that they saved right in the fija compromise, we saved all the nuclear plants. Thank God, because otherwise, like, you know, like Illinois would be in a world of hurt right now.
• 25:27
  Jigar Shah: And so I think part of this is actually recognizing the complexity of the grid, the value that solar, wind and battery storage play, but also the value that, you know, the 20% of our grid that's nuclear place. And you know, I hope we keep all of those nuclear plants online and build a few new nuclear plants. But one of the other things I'd say is, if you look at the PJM, right, and if you look at the governor's race in both New Jersey and in Virginia, both of which are PJM states, right, you've got over 100 gigawatts of capacity in that region, right? And the capacity auctions, if you look at them, have, you know, 10x to last year, and 2x this year. And so you're now in a place where, you know, they're raising 20% on people's electricity bills every July to deal with these capacity auction increases. Do you know how many behind the meter batteries it would take to actually, like dramatically reduce the cost of PJM capacity auctions.
• 26:24
  Tim Montague: I mean, the figure in my head for the US grid is six terawatt hours of storage that we need on the grid. Now that's a lot of it is front of the meter. So, no, I don't know the answer to the behind the meter storage question. What is that figure?
• 26:38
  Jigar Shah: It's less than the 5 million houses that that sia has promised. Thing that we're going to have ADD solar to their to their household by 2030 right?
• 26:45
  Jigar Shah: If you just took all of the solar systems in New Jersey and added a battery to them, because most of them didn't add batteries, and you bid that capacity into the PJM, you could dramatically reduce the demand.
• 27:00
  Jigar Shah: The capacity charges for PJM for that particular region, yeah, and, you know, like the question becomes, who's doing that?
• 27:08
  Jigar Shah: Right? There's a lot of companies that have solutions, whether it's Tesla Powerwall or base power or, you know, son and all of our friends who have great, fantastic battery offerings. But, you know, does the the governor that's running in the state of New Jersey on a platform of affordability, know that the number one thing that she can do to get affordable electricity bills in New Jersey is to convince all of the existing solar projects in New Jersey to add a battery to their system. For that
• 27:37
  Tim Montague: to happen, the utilities have to have programs that go direct to consumer and say, Hey, consumer, we're going to give you a battery for a monthly fee. We're not going to charge you $30,000 up front, but we're going to give you a 25 kWh battery because it's good for the grid, and yes, it's going to help you be resilient if there's a hurricane or an ice storm or whatever the event is, you know, I just, I just saw, caught wind of a story Bandera energy co op in Texas, okay, this is in south central hill country, Texas. It is the middle of nowhere, right?
• 28:16
  Tim Montague: And this rural Co Op is doing this. They're installing 25 kWh batteries in their district at no charge for $36 a month. And the benefit to the consumer is you get resiliency. If there's an outage, you might get some revenue from grid services, but they're making no promises, really. But isn't that the so how do you get all the utilities? One of the things that I really am curious what you think about Jigar is how we have so many different utilities and so many hJS and this very bottom up, organic solution to the grid, which really needs a top down, okay, this is what we're going to do. We're going to deploy a lot of batteries.
• 29:01
  Jigar Shah: Okay, so, so let's unpack what you just said, and I apologize that this is going to be slightly long, but let's just unpack it. So you've got a co op in Texas. They are offering a program to their customers.
• 29:13
  Jigar Shah: Let's understand exactly how the solar industry works now going into RE plus and how we need it to work in the future, right?
• 29:23
  Jigar Shah: Coming out of re plus. So going into RE plus, what they say is, we are going to carpet bomb all of that co ops customers and say, Who wants solar and battery storage? We're going to sell it to you directly. We're going to do third party ownership, and then those customers who get batteries right, we are going to aggregate those batteries up into a VPP, and then we're going to go into the co op and have a conversation with them around whether they're willing to pay us to dispatch that VPP in that co ops territory. And what the co op hears is, okay, so you're going to randomly put solar and battery storage everywhere within my utility, because you don't know who's going to say yes to your you know, marketing efforts, sure, and then if, by chance, the batteries are on the right circuits at the right time, and you get enough of them to opt in to this VPP, you might be able to solve my problem. But if you don't get enough people to do battery storage, then I'm still going to have to spend $50 million to upgrade that distribution circuit to be able to meet load growth requirements, because I'm not quite sure whether you're going to hit those requirements, and you're not going to sign up with liquidated damages to say you're going To hit this absolute target of five megawatts of batteries that I need on this circuit. You're going to say, well, I'm going to advertise.
• 30:49
  Jigar Shah: And if I get five megawatts, great, but if I only get one megawatt, tough ninnies utility, I did my best. So instead of doing that, what they did was they said, Let's sign up to a distributed capacity procurement, right? So we're going to go out and say, These are the circuits that we have challenges on. We know that we're have load growth on these things, and we need batteries on these specific circuits, right?
• 31:13
  Jigar Shah: So now let's go out and find a service provider who is going to focus their attention on these circuits. And then, you know, what the service provider that they chose, in this case, was base power, but it's a distributed capacity procurement, and they said, great, you know, like, this is the product offering that we think we're going to need to solve this problem. And in their case, the utility only wanted them to deploy a battery, not the solar. Right? So it's just batteries, right? And it's the 25 kilowatts you're talking about, and all these other things, right? And they focus their marketing just on those things. If I go to re plus and I say to the people that are there who wants to change your business model to be helpful to actually solving real problems that the utilities are faced with right now, as opposed to just using your old business model and hoping that it's good enough to solve the utilities models. How many people are raising their hand to dramatically change their business model to meet the electric utilities needs? How about I answer that for you, 0.0% of them so they are not relevant to this moment. And who's telling them at re plus that they're not relevant to this moment, the electric utility industry needs us. Our neighbors need us to change our business model, to deploy our technology, which we are the best in the United States at doing, safely, consistently, to code, right? They need us to change our business model. And most of us are saying, No, screw off. I remember our conversations from 10 years ago.
• 33:00
  Jigar Shah: I don't like you, right? But they're changed, right? The utilities are now under threat.
• 33:08
  Jigar Shah: They recognize that their old ways of doing business are raising rates at 9% a year, that they need these brand new ways of doing business, and that's why you see the work that spark fund has done with Excel Minnesota, and you know, and now you've got these small rural co ops who are saying, we want to copy that model as well. And you know, you've got 10 plus utilities around the country that are now copying Excel Minnesota's model. And so how many of those re plus members or or attendees are going to their gubernatorial like, you know, folks in New Jersey and Virginia, and saying to them, I need you, once you become governor, to actually replicate this model in your state, right?
• 33:50
  Jigar Shah: Instead of raising rates at 9% a year in New Jersey and Virginia by doing all of the old school ways of doing things, how about we do a new school way of doing these things and actually adding battery storage, just like this co op in Texas is doing. You tell me how many people are leaving re plus with all the talking points and going directly to those governors that are running for office for 2025
• 34:17
  Tim Montague: Hey guys, are you a residential solar installer doing light commercial, but wanting to scale into large C&I solar. I'm Tim Montague. I've developed over 150 megawatts of commercial solar, and I've solved the problem that you're having you don't know what tools and technologies you need in order to successfully close 100 KW to megawatt scale projects.
• 34:41
  Tim Montague: I've developed a commercial solar accelerator to help installers exactly like you.
• 34:45
  Tim Montague: Just go to cleanpowerhour.com, click on strategy and book a call today. It's totally free with no obligation. Thanks for being a listener. I really appreciate you listening to the pod, and I'm Tim Montague, let's grow solar and storage. Go to clean power hour and click strategy today. Thanks so much.
• 35:06
  Tim Montague: To be fair, many solar companies are members of their state solar industries associations. Here in Illinois, it's the Illinois solar and storage association which is doing active lobbying to create better legislation, working with the governor, working with the PUC, which is all
• 35:28
  Jigar Shah: the commerce business model that we discuss, which is randomly marketing to customers and randomly putting in batteries and hoping and praying that when they randomly installed them and aggregate the VPPs that they're relevant to comed, that's the model that you're talking about. Now,
• 35:43
  Tim Montague: I don't know that entrepreneurs are so resistant to change. Jigar they I
• 35:49
  Jigar Shah: don't think they're resistant to change, but I think that the nonprofits that they're members of are resistant to change. And I do think that Illinois Solar Energy Association, of which I have nothing but love in my art for as you know, needs to change their pitch to saying we need to take and borrow the DCP model in Minnesota and replicate it in Illinois. Well, right? And when you talk to Gil Kenyon is at comed, he's like, I would love that. I would love to partner with the solar industry. But whenever I bring it up to the solar industry. They say we're supposed to hate you.
• 36:26
  Tim Montague: It does feel very hard when you're at the ground level in the industry, to think about changing the way utilities approach things. It feels behemothic And yeah. There is historic tension between the utilities and the energy companies. There just is, right the listen to Barry cinnamon show right in in in Northern California. He's a residential and commercial installer.
• 36:59
  Jigar Shah: He's extraordinary.
• 37:01
  Tim Montague: He's an OG. He is an OG, but he is pissed off at the utilities, like, really pissed off.
• 37:09
  Jigar Shah: Yeah, because when we decided as an industry to say in California that we want to make sure that nothing changes, right, that you and I both know right, let's just, let's not play games that when solar is 1% of all rooftops on the grid, it has nothing but positive impacts to consumers, right? Then when it gets to 5% starts to like be break even, right? And then, as it goes towards 10% there needs to be a lot more consistent, coordinated planning that gets involved to make sure that we continue to provide benefits to our neighbors and are not shifting costs to our neighbors.
• 37:52
  Jigar Shah: And when you look at where nem 1.0 and nem 2.0 in California worked out right, the argument was, please leave things exactly the same. Maybe we'll add an extra two cents a kilowatt hour, four cents a kilowatt hour that we'll pay so that we're providing money towards. You know, the overall system costs, right? But we would like for you to not get involved in where the solar systems go, right? We would like for you to let us randomly sell customers across the state of California and hope and pray that they're in the right places at the right time to provide system level benefits. And the state of California said, No, if that's what you want to do, then we are going to prevent you from basically having an impact on the grid, and you're going to have to build a residential, local micro grid and consume all that power locally. And if you do that, then we'll get it pay you 35 cents a kilowatt hour for that power, right? Anything you export to the grid, you get paid seven cents a kilo right now. In response, what did the solar industry do? They said, please bring back what we had, right?
• 39:03
  Jigar Shah: Instead of saying, okay, message received, we are now a very large industry, and we would like to make sure that we use our political power in the legislature to demand that the utility share their data with us and work with us to tell us exactly which circuits we could add our solutions to that would provide the most cost relief to our non solar neighbors, because we know that we're the best technology in the world. We know that we are the only thing that you can deploy fast to meet load growth. And so we would like for you to lean on us as an industry to meet the needs of the people of California, right? That is not what the solar industry said. Now I did that, and I'm working with a bunch of people in California to do that, and they are slowly coming on side, and Khalsa, frankly, has been an extraordinary partner. So Khalsa is doing a great job of working with us, but man Almighty, has this change been difficult, right? But you and I both know that randomly doing stuff in random places is not how you provide system level benefits that requires some planning, and the utilities are at fault, to be clear, because they have not given us the data to actually know which circuits are most helpful. Which is why this DCP model in Minnesota has been so much of a game changer, right?
• 40:37
  Jigar Shah: But I just think that when you think about what we're going to need to do as an industry. We have to be helpful. We have to be helpful to our neighbors. In this moment of crisis, one in six households are now behind on their electricity bill in this country. That makes me sad, and that should make all of the people in our industry sad, and we are the only solution that I believe we can be deploying faster, and then with the Treasury guidance, they've given a pass to those sub 1.5 megawatt projects, right? So DG has never been more ascendant, but I want us to be helpful.
• 41:23
  Tim Montague: Yeah. Yeah. I mean, I am all ears that there is a model in the DCP distributed capacity procurement model in Minnesota, if you think that's a model that can be replicated with other IOUs investor owned utilities. And public power utilities, these are rural co ops and Munis. It it really is very troubling for solar professionals when they work in several jurisdictions and the rules are very different from jurisdiction to jurisdiction that makes their life complicated. It increases the cost, it reduces the rate of installation. It just is a lot of friction in the system. So in our last couple minutes together, Jigar, how do you see creating a printing machine for the DCP model? What is the mechanism socially and politically for doing that?
• 42:23
  Jigar Shah: Well, I think we need to educate the people who we are trying to influence, right? And this goes back to the political power piece of this, right? You have active Governor campaigns in both New Jersey and in Virginia, right at a time when the increase in the capacity auction costs have made it onto the governor's race. We usually, nobody cares about us, usually, but when rates are going up 20% because of this auction, the woman who is leading that race in New Jersey made it a point to talk about the fact that affordability is a problem right now. That gives us an opening to say, hey, we have been active in New Jersey since 2003 when Jigar built the very first third party owned system that sun Edison ever built was in New Jersey in Edgewater. We have been active in that space for over 20 years, and we want to be helpful. We want to help PSE and G we want to help Atlantic City power. We want to help the governor dramatically reduce electricity rates in New Jersey. And what does that look like, right? Because what we've said in the past is your personal electricity rates are going up. We would like to give you solar power to be able to reduce your bill by 20% right?
• 43:37
  Jigar Shah: That has been an individualistic sort of messaging, right? What the governor wants to hear is, how do we help bring everyone's electricity bill down in the state of New Jersey, and that means that we have to use FERC order 2222 to bid demand flexibility into the market to dramatically reduce the capacity auctions, right? And when you think about how much we need, it's tiny, right? If all of the existing solar systems in the state of New Jersey added batteries to their systems, you would dramatically reduce the cost of the capacity auction and reduce everyone's rates by 20% in the state of New Jersey. Is that something the governor wants to deliver? Course, it is.
• 44:20
  Jigar Shah: Who's the only group that knows how to do that, the solar industry in New Jersey, because they've been active there for 20 years, and people rely on them to maintain to maintain those systems, and they've got a great relationship with all of their customers that they've been working on for 20 years, right?
• 44:40
  Jigar Shah: But we have to make that trade.
• 44:45
  Jigar Shah: And then what you say to Governor Murphy, who's there now, is, look, we passed a bill in the state of New Jersey that eliminates all of the unnecessary red tape in the state of New Jersey, the local New Jersey, you know, jurisdictions are fighting us tooth and nail on it because they think it diminishes their power. And so now the governor is doing some weird thing to like, you know, try to go back and forth on this right, fine, but ultimately, we want you to reduce the friction costs in the state of New Jersey. We agree that we are going to focus our attention on the people who have existing solar systems plus new ones on distribution circuits you tell us to work on. We're going to get battery capacity in there, because that's what you can bid into the PJM auction.
• 45:35
  Jigar Shah: And we are going to, as God is my witness, reduce the cost of electricity for all of our neighbors in this great state of New Jersey by 20% right? That is something that the entire group at re plus, can get behind. And we're going to do that in Virginia, and we're going to do that in Ohio, we're going to do that in Pennsylvania, we're going to do that in Illinois, in New York, we're going to do that right in every one of these markets. We're going to do it.
• 46:02
  Jigar Shah: But you know, like that is a collective effort that we all need to get behind to be able to bring the cost down by using our tools to help meet the utilities needs.
• 46:15
  Tim Montague: Bringing costs down for consumers is an argument that the solar industry has used for a long time, and it's accurate. It is accurate for sure, your point about our random approach to installing solar on the grid is well taken, but like you said, the utilities have to unlock the data to allow us to work together to solar and battery eyes the grid in. In the key places I'm all for retrofitting batteries into all the existing solar that is going to be largely middle and upper middle income areas, right? If you really want to help people that can't pay their power bill, you're going to have to have a data unlock and a collaboration and yes, California and Illinois have solar for all programs that are targeting low income and those, those programs do need extra incentives, because those people are spread super thin.
• 47:14
  Tim Montague: They're working two and three jobs. They don't have time to answer the door. They're not home to answer the door right, to even receive the sales call, so to speak.
• 47:25
  Jigar Shah: But it would be easier to double that budget if you went to Governor Pritzker and said, if we do this for these consumers in these neighborhoods, and we give them subsidized batteries for their home or building or or street, we are going to reduce the cost of investment required into the distribution circuits there by 10x right? So a billion dollars invested into these batteries reduces the investment in distribution grids in those same places by $10 billion right? And that means lower cost for everybody who uses comed. That's a pretty compelling narrative to double the solar for all budget, right? And so, but right now this, the argument that we're making is these people have been left behind double the solar for all budget so that I can give them solar so they can save$8.47 on their bill every month.
• 48:19
  Jigar Shah: That is not as compelling narrative. And so like, look, I love our industry. You know that the I am not like trying to deliberately piss everybody off, but I think that the thing that people don't understand is that when I started in this industry in 1995 working for Astro power and then at BP solar in 1999 the total amount of solar that we were installing globally was 100 megawatts. We're now big. We're 80% of all grid connections in the entire world, including in Pakistan, in Uganda, in Kenya, in India, in China, we are 80% of all new grid connections in the world. When that occurs, you have a responsibility to be dominant energy. When you're dominant, you are responsible for the whole goddamn system.
• 49:20
  Jigar Shah: You are not responsible just for commercializing your technology.
• 49:25
  Jigar Shah: We did that for 25 years. We're commercialized now. We have to be helpful, and in so doing, we will build our political power so that in 2026 we are not going to get run over by a bus like happened in the last six months.
• 49:42
  Jigar Shah: I just want people to recognize that you are part of something special, and that thing that we have created can do more, and we are expected to do more, because we are in an electricity crisis in our country, and so the front lines of that crisis and the people that can do the most to solve this problem are the people of our industry.
• 50:09
  Tim Montague: I love this. I think you're spot on. I have no problem whatsoever with your message. I think of my listeners who are solar installers and various flavors of energy professionals across the country, and some of them have good state or regional renewable energy associations that they can join and take collective action with, with their legislatures, right? It's all about collective action ultimately, if you're going to move the needle, yes, but there are many places take Montana, yeah, they have a Renewable Energy Association, but it's a huge place with very few people in it. And I think installers in Montana feel like it's just, it's them and their customers, it's not them, and this collective movement, but so I'm just curious if you have some other playbook for the renewable energy industries associations that has to propagate some DNA that has to propagate to get them On this page of, okay, we've got to come together and take these good models like Minnesota and learn to collaborate with the utilities like it's easy to say, but I think it's hard to do.
• 51:38
  Jigar Shah: Well, that's been my mantra for 25 years. It's simple. Not even. Easy. I totally agree with you, right?
• 51:46
  Jigar Shah: But the beauty is, you have friends, right? So whether it's the DCP model that spark fund is pushing, or the model that base power is pushing, or the model that some of these other companies are pushing, there's a lot of models out there, right?
• 51:58
  Jigar Shah: And like, when you look at where we are in all 50 states, all 50 states are in a crisis, some more than others, but every one of them is in a crisis to even in Montana, there is there are loads who are desperately trying to get connected that want to add 500 jobs in that warehouse, and they're not being allowed to connect for three years because of load growth issues in Montana, and the utility and our association is the group that needs to go to the governor and go to the utility and say, Look, I know that politically, you're not supposed to like me, but I can solve this problem for you in five months. Do you want me to solve this for you in five months? Because I'm happy to do it, and I'm happy to bring those 500 jobs three years forward. Is that something you want me to do? Okay, great. How are you going to compensate me for doing that? Are you going to, like, own the batteries and then pay me to install them? Are you going to have my customers own the batteries and have third party ownership models fund them, and then you're just paying a supplemental payment like, Rocky Mountain Power is doing? Like, what exact model would you like to do? And here's the four that I know of that were published in the VPP liftoff report from the Department of Energy in 2023 and again in 2024 sorry, in 2025 we published it right before we left office with 75 case studies in it. So here are the case studies using an official doe logo that you can pick from.
• 53:22
  Jigar Shah: Pick one of them. All of them require my firm to do the work, right? So I'm still going to get paid to do the work, but like you need to pick one of them, because otherwise you're leaving economic development on the table.
• 53:37
  Tim Montague: Hey guys, are you a residential solar installer doing light commercial but wanting to scale into large C&I solar. I'm Tim Montague. I've developed over 150 megawatts of commercial solar, and I've solved the problem that you're having you don't know what tools and technologies you need in order to successfully close 100 KW to megawatt scale projects.
• 54:01
  Tim Montague: I've developed a commercial solar accelerator to help installers exactly like you.
• 54:05
  Tim Montague: Just go to cleanpowerhour.com, click on strategy and book a call today. It's totally free with no obligation. Thanks for being a listener. I really appreciate you listening to the pod, and I'm Tim Montague, let's grow solar and storage. Go to clean power hour and click strategy today. Thanks so much.
• 54:25
  Tim Montague: We'll have to leave it there. I want to thank Jigar Shah for coming on the show. Check out all of our content at cleanpowerhour.com. Check out my new book, wired for sun, and look for me on LinkedIn. You can find me on LinkedIn. I love connecting with my listeners.
• 54:45
  Tim Montague: Jigar, how can our listeners find you?
• 54:48
  Jigar Shah: LinkedIn is always the best way to find me. I'm very responsive there.
• 54:52
  Tim Montague: I'm Tim Montague, let's grow solar. Thanks so much. Jigar Shah,
• 54:56
  Unknown: Thanks, Tim. You.