Voiceover:

Welcome to the Experts Only Podcast, sponsored by CleanCapital, where we explore the intersection of energy, innovation, and finance. Our host is CleanCapital’s co-founder and former federal chief sustainability officer, Jon Powers. Learn how CleanCapital is revolutionizing clean energy finance, and find more episodes at cleancapital.com, iTunes, or wherever you get your podcasts. If you like what you hear, be sure to subscribe and leave us a five-star review.

Jon Powers:

Lisa, thank you so much for joining us here on CleanCapital’s Experts Only Podcast. Really excited to have you on. I’d love you. If you could start off by talking to the audience about your personal journey in this space. How did you end up where you are?

Lisa Jacobson:

Thank you, Jon. It is such a privilege to be talking with you and to be on this podcast. Wow, my journey. Well, I’m currently serving as the president of the Business Council for Sustainable Energy and the council is celebrating its 25th anniversary this year, really an amazing milestone. But I got involved with the energy industry after graduate school in the late 1990s. I had been working in the policy space, mostly in Washington, D.C. as an aid to Congress and had been working on a whole host of non-energy and environmental-related topics, education, healthcare, again, not in the energy and environment space.

Lisa Jacobson:

When I went to graduate school, I had made a choice that I wanted to work on global economic issues, trade policy, and I got to know a number of people that were working in the energy space. One of the papers that was written by a friend of mine that I reviewed as our thesis for graduate school was on environmental economics and emissions trading. After reading that, it was clear to me that the world was moving in new ways and could capture these amazing attributes if we just had financial models that would value them, so when I left graduate school, I wanted to combine my interest in global issues, trade policy, and now my newfound interest in environmental economics. I wanted to work on global climate change issues. That’s how I got involved in the energy industry, mostly working for renewable energy, energy efficiency, and natural gas sectors. That’s who the Business Council represents today, so it’s a perfect fit for me.

Jon Powers:

Yeah, so tell the audience a little bit about the Business Council. First of all, congratulations on 25 years. That’s amazing. The first time I met you is when I was working at the White House as the chief sustainability officer of the federal government and you would come in with the council and talk to us about a lot of things that are happening in the industry. Talk a little bit about the Business Council’s mission and then how do you go about implementing that mission.

Lisa Jacobson:

Sure. The council’s focus is to promote policies that expand markets broadly for energy efficiency, natural gas, and renewable energy, kind of the clean energy portfolio, and really, these are the growth sectors of the US energy economy today, and if you look around the world, that’s where the trends are, too. This broad portfolio can serve the needs of our power system and our energy system at large very affordably and in a reliable fashion, and very importantly to the Business Council, with low carbon and low air-pollutant emissions.

Lisa Jacobson:

The council is a unique coalition because we represent so many different businesses. I mean, in any one sector, even just looking at solar, you’ve got many different business models that make up the supply chain, so now take that and include all the renewable technologies and then add on the supply side and demand side efficiency industries, and then the natural gas industries. You have, really, a group of people that might not see eye to eye on, on many things, but in fact, they do. When it comes to the policy space, they want to see market-based approaches that provide a value for the services they provide and that recognize the environmental attributes of what they offer to customers around the globe.

Lisa Jacobson:

We work together to identify where we have a common interest in the policy space, and primarily that’s federal policy, though we do work at the state level, and I know we might want to talk a little bit about that in a few moments, but we identify where we have common interest. Then we map out strategies to talk to the policymakers that will be influencing those topics. As I said, we’ve been together as this broad-based coalition for over two decades and we’ve had a good number of successes. I think when you look at the actual data and the market growth across efficiency, renewables, and natural gas, it shows that when you have policy clarity and a long-term vision, you can have a really impressive deployment.

Jon Powers:

Well, that’s interesting. I mean, one of the things we’re really focused on at this podcast is to help educate folks, not just the true believers, but folks who may not fully understand the market on why that clean energy is not only here to stay, but we’ve evolved as an industry. I really love the fact that you talk about it as the growth sector of the US economy. In this current political environment, both of us living here in Washington, D.C. there’s obviously a constant back and forth right now within this administration, but just in general. How do you take your message into this political climate and what kind of reception are you receiving to that message?

Lisa Jacobson:

Well, I think again, always starting with the facts helps. The facts aren’t always in your favor, right? You have to be willing to look at the world as it is, understanding where your strengths are, and where you can improve. But right now, when it comes to efficiency, renewables, and natural gas, and especially when you pull them all together in a portfolio, there are very significant benefits, and we are clearly on the rise in the marketplace, so it’s very hard to dismiss that kind of a portfolio when it comes to talk to you. If you’re a policymaker, whether you’re within the Trump administration, or in Congress, or at the state and local level, if you can show that you have significant growth and significant jobs and economic benefit, then you’re going to at least be listened to.

Lisa Jacobson:

I think for us, it’s not really an ideological conversation. It’s really about the market changes that are occurring and how to ensure opportunity for new technologies to participate in markets and that the market structures that we have, which have many layers, often were put together and adopted in a very different era, some going back 20, 30, 40 years, so we really need to have a conversation across all levels of government about updating market rules that reflect the current needs of our energy system and the needs that we’re going to have going into the future. It’s more about change than it is about ideology. I think for especially the Trump administration, a lot of what businesses need are market-based, fair systems, and that should be one set of arguments that is very compelling.

Jon Powers:

Going back to your comment about facts, each year the Business Council for Sustainable Energy partners with Bloomberg New Energy Finance to publish a sustainable energy factbook. I personally utilize this factbook. It’s an incredible resource, really dives into the industry and talks about where it is today. This can be found at bcse.org. It’s a great reference for professionals, it’s a great reference for policymakers, for advocates, and those looking to get educated on the industry. We actually share it out with folks who are asking questions about where the industry is today. Talk a little bit about the history of the factbook and then I want to dive in some of the stuff that came into the 2017 version.

Lisa Jacobson:

Thank you. That’s a very high endorsement. I’m really glad to know, Jon, that you’re doing exactly what we hoped and you’re sharing it far and wide. Again, it is all available for free. There are many tools on our website that can help you search it and help share this information in a very user-friendly manner, so I encourage everybody to check it out. Then if you have comments on how we can make it better, a chart you don’t see that you wish were in there, or some kind of graphics or video you’d like us to produce to tell a story, please contact the Business Council. You can contact me directly, Lisa Jacobson. I’d be happy to get any input from those that might be listening to this podcast.

Lisa Jacobson:

But the reason for the fact book is quite how a lot of ideas come about, we were sitting around the table of a board meeting planning for our 20th anniversary, going back a few years. We had been working for a good number of years with Bloomberg New Energy Finance informally and one of their analysts was sharing information about the market and you know, what they were seeing in terms of current trends and future trends.

Lisa Jacobson:

A number of us looked at each other and said, “Well, this is really terrific. They’ve got some great data in a few areas, but they really aren’t talking about or capturing information about many other sectors that, while they might be small today are going to play a very large role going into the future.” Anything from combined heat and power to fuel cells to understanding the broad portfolio of the renewable technologies, so there was a lot of good information on winded, solar, but not so much on things like hydro, which is quite amazing given that hydro is such a dominant, renewable energy technology, but nonetheless, there wasn’t a lot of tracking of hydropower, waste to energy, geothermal, biomass. There was a lot of gaps there.

Lisa Jacobson:

Then on the whole kind of energy efficiency suite of technologies, they were tracking smart meters, but they really weren’t tracking much else. Then on natural gas, we were in the midst of this big transformation. While they had natural gas analysts, they weren’t knitting it all together, so we decided to partner with them and build out the Sustainable Energy in America Factbook. What it does is it provides a very tight, neat, easy-to-understand view of what’s going on big picture, but then it also has many industry-specific sections where you can get up to speed on these technologies that I said that are relatively small now, but are poised to grow. I think about sustainable transportation, electric vehicles, or batteries, and then the whole storage movement. I mean, those were really in their infancy when we first started the factbook. I’m so glad we started when we did, because now, the data is quite significant, and we all know that those are extremely topical technology areas that people want to understand.

Jon Powers:

Yeah, I love the breadth of the factbook. One of the things, if you’re new to the industry, people think about clean energy, maybe they think about technology. They do think about wind and solar, but if you don’t understand everything from green buildings to meters, to energy-efficient HVACs, to biomass, to fuel cells on the production side, or skip that to the transportation side, electric vehicles, fuel cell vehicles. There’s so much moving across the spectrum that I think people can feel lost and when you dive into the factbook, it really gives you a good sense of where each of those areas are, and you get to understand what’s emerging. I think people have talked about the Holy Grail of storage for a decade. Well, storage is coming to reality today in a whole new way.

Jon Powers:

At CleanCapital, we focus right now on solar projects. I think our mission is to bring more capital to bear to clean energy as a whole though, so we’ll be moving into other verticals in the future, but I do want to focus on solar for a second. As you know, the industry’s really grown over the last decade, but the bulk of our solar projects have come online within the last five years. There were 35 gigawatts between 2012 and 2016 and a lot of this has happened as the cost of these installations have fell, the price of the panels, better efficiency in the industry. Can you talk a little bit about what you guys have discovered and what you’ve seen over the course of doing the factbook and the response to policymakers as you talk to them about this?

Lisa Jacobson:

Well, thank you. I think I go back to this policy message because when you look at the growth of solar, and especially when you contrast that with other technologies in the renewable space, you really see the benefit of consistent policy that will then therefore guide investment. When you look back just five, six years when the ITC, the investment tax credit that solar can benefit from as well as a number of other technologies got its five-year lifespan, you started to see in all the charts a steady uptick in growth in solar, and we’re still building on that today.

Lisa Jacobson:

For other technologies that have benefited from tax measures, sometimes they’ve been very start/stop, and you really also can see the boom and bust that comes with it. I’m thinking very particularly about the wind industry and the production tax credit, and if you go back over the last 10, 15 years, you’ll see very clearly where it had a two-year extension, and then there was a period of time where there was uncertainty, and then deployment dropped off. It’s just boom, bust, boom, bust, and it’s very, very clear. What the factbook enables you to do is really track these things together and see what underlies that dynamic.

Lisa Jacobson:

The factbook, it’s not just for renewables. I mean, we have seen dramatic improvements in energy efficiency over the last 10, 15 years, and you see our energy productivity gain, so our growth versus energy consumption, we’re really decoupling between our growth and our energy use. Energy use is basically flat, but we’ve still experienced growth as a country, and so you see charts where we’re really going in those different directions, and it’s quite remarkable, so then you wonder, “Okay, well, what’s underpinning that? If you go to the energy efficiency section, whether it be investment by utilities or investment in the private sector, whether it be policy leadership on things like building codes, or other energy efficiency measures like energy efficiency resource standards, if you look back at that same time period where our energy productivity is increased, you see hockey stick charts across the board in terms of investment or policy leadership and energy efficiency, so policy and the impact of clear sustained policy comes to light when you look at the data.

Jon Powers:

Yeah, that data’s so important. I think for policymakers right now, there’s so many interesting and polar opposite messages out there for them to listen to, but when you put the facts in front of them, it’s hard for them to debate it. When you look at specifically the investment side of this, 2015 set an all-time record with over $63 billion in investment in clean energy. That fell slightly in 2016 to down to almost 59 billion, or about 7% decline. Some of that is caused by a drop in the public market funding, as companies in the solar space, for instance, began to look in other avenues. Talk a little bit about what you’ve seen on the investment side of clean energy and where you guys think it’s going

Lisa Jacobson:

Well, I hate to sound like a broken record, but I think a lot of the uptick in 2015 was to capture the tax benefits that were set to expire at the end of that year, and then at the very end of the year, they got extended for a number of years, another longer-term extension for just solar, unfortunately, in the ITC. It’s a big challenge when we have policy leadership in one technology area, but not in a more fuel-neutral or technology-neutral fashion, and certainly for the renewables industries, this has been a big challenge, but we’re just talking about solar now.

Jon Powers:

Just for background for our listeners and what that means, basically the investment tax credit, which is a 30% tax credit on the construction of projects, solar, but other projects as well, was set to expire. I mean, all the projects had to be built in the ground operating by December 31st, 2016. December 2015, during some major negotiations around the budget, and some other significant, a major bill happened in Congress. There was a late-night negotiation that really brought together clean energy tax credits, both for wind and solar. It really tied it to oil exports, so you had a bipartisan support from the Republican and Democratic side. It was a at-midnight negotiation and the bill came out the next morning, but that was game-changing for the industry because it really helped provide the policy stability that Lisa’s been talking about, as not just the developers and the builders, but the financiers said, “Okay, this is here to stay coming forward.” Sorry, I didn’t mean to interrupt you, but I thought I’d say that.

Lisa Jacobson:

No, no, that was excellent. Thank you for giving that background. You were on the front lines of that at the time, as a number of us were, so it was really important for the growth of the solar industry to have that kind of stability, so while there was tremendous pressure to move projects in late 2015 anticipating the expiration of the credit the following year, when you have that relief, the market responds, so the urgency is off. I’m not suggesting that’s the whole story, but it certainly, I think, is part of the story. Now, we had kind of a glide path over the next five years, starting in 2016 that could enable steady investment and a pipeline to be built, and I think that’s what we’re seeing today.

Jon Powers:

Without us having an overarching federal energy policy in the US, right, or maybe an ever ever-changing federal energy policy, as the industries have grown and they’ve matured, so much of this is integrated at the state level, whether it be engagement with the utilities and the public utility commissions, state-level renewable portfolio standards, may seem archaic policies like net metering, right? This is just a state-level fight on so many levels. How does your message change, or how do your partners with BCSE take their message to the state-level folks, and how does that differ from what they’re talking to the federal folks about?

Lisa Jacobson:

Well, as you noted, a lot of the policymaking is really at the state and local level for the power sector. I think the main messages are the same. I think what public utility commissioners and mayors and governors and all the others that are involved at the state level care about is number one, safe, reliable, and affordable electricity for their citizens. They also understand the connection between having safe, affordable, reliable electricity to fuel their economic growth at the state and regional level.

Lisa Jacobson:

What has been a more recent phenomenon, let’s say, in the last 20 years has been an interest in making sure that not only are we addressing air quality concerns so that our air emissions in partnership with federal policy are going down, but also addressing climate change and other sustainability issues, whether that be water or land policy, so they’re beginning to factor in a more comprehensive view of what kind of electricity and energy resources they want to have for their states or localities.

Lisa Jacobson:

For us, it’s really a lot of the same messages. It’s education. Number one, people aren’t as familiar with the technologies that we represent. They also probably are not familiar with their standing in the marketplace, how much they have grown in just a very short number of years, so it’s really getting them up to speed on the current situation in the power sector. Once they know, “Oh, okay. Well, I didn’t know that my neighboring states were doing a lot of demand response, or they’re using energy storage with renewables in a new way, that’s interesting.” Just like the financial community, they don’t want to take risks, especially when it again, involves the safety or reliability of providing electricity to their citizens, so they take that role very seriously, but they don’t always know where the technology or the marketplace is in the current environment when we’ve experienced so much change so recently.

Jon Powers:

Yeah, it seems at the state level, they don’t have the resources that the federal policymakers have, right, whether it be the renewable energy labs or other places they can tap into, which makes this message, and I think the messages you bring to the table that much more important, right? When you can bring them facts, tell them, you’re in Pennsylvania, what they’re doing in New York, what they’re doing in New Jersey, what they’re doing in Massachusetts, so they can learn, and in many times, adopt some of those policies that are working.

Lisa Jacobson:

Yes. I think the other really can’t say enough, affordability and cost. The two big questions we get are, “Are you reliable?” and “What do you cost?” because people think that these technologies are much more expensive than other options. In some cases, that may be true, but what we found in the marketplace is, in fact, wind and solar and a number of energy efficiency, natural gas, I mean, we’re breaking the records in terms of cost reductions, and when you look even without subsidies, these technologies are very competitive in many parts of the country.

Lisa Jacobson:

I mean, I can give you some specific examples, but I think bottom line, people have a lot very outdated view of what the cost of different technologies are, so a lot of our education is really showing the data to them, showing them what power purchase agreement prices are, where they’ve been, and where they’ve progressed for different technologies, showing them what the levelized cost of different technologies are so they can see that they don’t have just one or two options, they might have 10 or 15 options. Then this has to be factored into the planning process, usually multi-year planning process that goes through the public utility commissions in most parts of the country, so there’s a bit of a lag between the education, and then getting that baked into the planning and then the ultimate procurements that the customers will see on the other side.

Jon Powers:

I challenge our audience to go to bcse.org. You can both educate yourself, skim through and read the factbook. If you want to educate others, there’s just great resources there to do it. Feel free, obviously, to reach out to the Business Council ’cause they’re doing an amazing job helping to educate folks across the country and the importance of a sustainable energy future.

Jon Powers:

I’m going to ask you final question, Lisa, that I ask all our interviewees. It’s about your career. If you could go back, you’ve established an incredible career in the space, and if you could sit down with yourself coming out of high school, or even college, what advice would you give yourself today?

Lisa Jacobson:

That’s a good question. I have a 11-year-old and 14-year-old daughter, so I’m just beginning to start thinking about these things for them. I think one of the things, first of all, take risks. I mean, when people tell you no, if it’s something you want, don’t listen to them because certainly, I think back at different circumstances in my early career, or in college, people told me no. Luckily, I found other routes, and I had enough confidence in myself to say, “Well, that may be their choice, but it’s not mine,” so don’t let people tell you no, especially when you’re just starting something.

Lisa Jacobson:

Then second, internships were so helpful to me, and seeking out the positive. Again, there may be people that tell you no, but they’ll probably be people that are encouraging you, too, so gravitate towards the positive. Push the negative away and focus on the positive.

Lisa Jacobson:

Then finally, you never know where life is going to take you, and you need to be open to that. If you had asked me at 25, if I’d be working on energy and environmental issues, I would’ve said no. “That’s where your career’s going to be, Lisa,” I would’ve said, “Really? That’s surprising.” You just never know where the world will take you and you never know what relationships you make and how they’re going to influence things going forward.

Lisa Jacobson:

I already said that was my final comment, but I guess my final comment is always appreciate and respect the relationships that you make because someone you may meet at one period of time could be really helpful and important later on that you may never have anticipated that, so again, just be really mindful about the relationships that you make and very respectful of them because they may be your partner 15, 20 years later.

Jon Powers:

That’s great advice and something I definitely want to share with my own kids. I mean, same thing, if I look back at myself, when I was coming out of college was an elementary education major going in the Army, never thought I’d end up sort of being where I am today. Well, Lisa, thank you so much for joining us. Thank you for the incredible work that the Business Council’s doing and we’re honored to have you join us on CleanCapital’s Experts Only podcast.

Lisa Jacobson:

Oh, thank you, Jon. Congratulations to all the work and all that you’re contributing to the markets as well.

Jon Powers:

Thank you so much.