Welcome to the Sazmining Podcast. At Sazmining we are bringing you into conversations with today’s industry leaders in blockchain and cryptocurrency. Our goal with this podcast is to improve the understanding and adoption of blockchain and cryptocurrency by giving you an insider’s look at what’s being built and informed predictions on what the future holds. 

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Benoy Thanjan is the founder and CEO of Reneu Energy and he is also an adviser for several solar startup companies. He was the SREC trader in the project finance group for Solar City, which merged with Tesla in 2016. Benoy was the Vice President at Vanguard Energy Partner. He also worked for Ridgewood Renewable power. His extensive financial experience in the renewable energy industry and in the environmental commodities markets.

William Szamosszegi : With all that said, I’d like to welcome you, Benoy to the podcast.

Benoy Thanjan: Thanks for having me on the podcast. I’m excited to be here and congrats on the start of your podcast. It was great to talk to you about how it happened and where you are today with it.

William: I’ve been very excited for this conversation in particular. Your background is incredible. You’re one of the experts in this [energy] industry, particularly in solar. And you also, as you mentioned, have your own podcast, the Solar Maverick Podcast. To start things off.

Can you just talk about your journey in this industry and how you got to where you are today?

Benoy: It’s been an amazing journey, and I can’t believe how quickly it’s happened. My first job out of graduate school was at Deloitte & Touche, which was like an internship. And then I ended up getting a full time job after the summer was over, in their energy group and their energy financial advisory services practice as more on the sell side, consulting side. But, I really wanted to move to the buy side and I ended up going to a company called Ridgewood Renewable Power where I wound up analyzing investments in renewable energy projects. I thought at that time that was like, 10 years ago or 11 years ago, that solar is going to really grow exponentially based on my research. And then I wanted to get a job in the solar industry. So I ended up working at this company called Vanguard Energy Partners, which is an installer of commercial industrial and utility scale solar. I was in their project finance group and then I went to a SolarCity Tesla.That was like an amazing experience because this was before they were a publicly traded company. And I was actually, you mentioned that SREC, which are Solar Renewable Energy Credits, an incentive in the Northeast states to incentivize solar development so I was helping SolarCity, with their expansion into the northeast markets. And then I also worked for Lyndon Rive, who is actually the CEO of SolarCity, but he was also head of the Project Finance Group. He’s Elon’s cousin. It’s just like really getting a great sort of experience. And then I decided to start my own company. In 2012, we first started as a consulting company and we also developed projects and it’s now been 12 years in the renewable energy industry. You’re considered a veteran because it’s such a new industry as like what you are in cryptocurrency and mining, it’s so new. So I could really relate because you’re trailblazing a new industry and new services.

William: What you guys are doing at Reneu Energy is really, really interesting.

Can you talk a little bit more about what the projects that you’re working on with Reneu Energy are actually like and how your company’s involved? 

Benoy:  Initially we were just a consulting company and we were just trying to figure out how to add value in the industry. So we first got started in these SREC or S-R-E-C markets and basically at this point we manage about like 12 megawatts worth of projects that we do like SREC management for. We also help our clients sell those RECs and then we actually do research as well and pricing because it’s one of the big economic drivers of solar projects in the Northeast, in the states that we’re talking about. And then we also source financing for projects. So there’s about 13 megawatts of projects under construction today where we need their help, the investors or developers in sourcing financing for the project. And then we also now develop commercial, industrial and utility scale projects. So we felt like two years ago that, hey, we’re helping all these developers and investors in different parts of the puzzle. Why not? We should be able to do that ourselves. So we’re actually doing the first community solar project with the New York Housing Authority on 20 different rooftops in New York City. And then we actually partnered with a European developer where we’re developing 150 to 250 megawatts of community solar projects in New York, where we’re basically, educating them through the process, partnering on different things. They have experience developing all over the world. But New York and each state is just so unique when you’re developing a project. Which I’m sure you understand with what you’re doing as well.

William: One of the things that I definitely want to dive into more depth on just after hearing about all the different business segments that you guys touch with Reneu Energy, is that financing piece. Our industry, we’re in cryptocurrency mining. There are different types of payback periods, different types of ways where you try to retire the debt over time compared to solar.

How are you looking at the structuring of these different financial projects for these solar companies? 

Benoy: It’s extremely complicated and it’s unique and it depends on the counterparty and a big part of the capital stack is tax equity. And if people are not familiar with tax equity, basically you have to have a taxable income to take advantage of government tax incentives. So the big incentive in solar is like the investment tax credit. That’s a 26 percent incentive on the cost of the solar system. And then there’s accelerated depreciation, which I don’t know how much I’ll get into, but that really impacts the capital stack and you obviously can’t take debt against that. And then there’s sponsor equity. And then obviously everyone wants to put as much debt as they can on the project for the longest term possible. But it really depends on the quality of the offtake, which is always like a challenge. And I’m sure you experience that as well, doing it like the PPA agreements that you’re working on and having a credit worthy off taker and trying to figure out solutions if it’s not credit worthy. How to get the lender comfortable and then also what’s challenging to what we’re finding is mostly PPA or getting to be more merchant and different spread of risk appetites. We’re seeing like before it was like just a 20 year PPA, one investor. And that was the way that it would get financed. But now, we’re talking about community solar. It’s a residential customer who’s buying the offtake and they only have a one year commitment and then there might be like an anchor tenant who basically takes 40 percent of the community solar offtake from the project. And that’s only a five to 10 year contract, not 20 years. So what we find is that it’s like all completely structured, completely different. And that’s what makes it extremely challenging. But then also creates an opportunity for us to add these services to our clients.

 William: On the point of view of how long these solar projects normally take to pay back the capital, is that something where you’re seeing huge variability in the projects? Or is it a type of approach where you know that a solar project is normally going to be able to pay back the capital in X number of years?

So is there’s a somewhat understood approach in structuring these types of financial projects?

Benoy: That’s actually a great point Will. What we find is, it’s all over the place because there’re so many different variables that really depend on what’s the power price that’s negotiated for the power purchase agreement. We talked about credit as well. If you’re a Fortune 100 company investment grade, it’s a lot easier versus a non investment grade credit. The other thing, too, is the state level incentive is unique in every state. So, for example, we’re in New Jersey here and they have a 15 cent credit based on a megawatt hour production. So it’s based on that, that actually impacts as well how you structure the financing and how comfortable the financing is comfortable.

William: From your point of view, I would kick myself later on if I didn’t end up asking this question. So I’ll ask it right up front because we have an expert in solar and renewable energies right here in the flesh. Many times you hear people talking about the environmental impacts of these different types of energy sources. So renewables versus natural gas or some other type of non renewable energy source.

How would you, from your perspective, compare the pollution caused by renewables such as something like solar versus nonrenewable energy sources like natural gas? 

Benoy: It’s interesting because people call natural gas like a cleaner fuel. And it’s true. It is a cleaner fuel compared to coal, which, I’m hoping people know that’s an extremely dirty source of energy that might not necessarily be said by certain people who have prominent stature. But it is not a clean source of energy. Solar energy is a clean energy, but there is a pollution aspect of it. When you’re constructing the panel and then actually in the future, basically a solar system or panel lasts 20 to 30 years. So right now, like most of them are actually going into landfills. Companies are coming up with ways of recycling certain components. So it’s definitely cleaner than natural gas. But, yes, there is definitely some pollution that’s created with the construction of these panels. And then and then the recycling as well. But I’m hoping, solar is a relatively new technology and there’s so much solar coming online in the past eight years, that we’ll get better at recycling and that will not be as big of an issue. The other thing, too, it’s an infinite resource versus natural gas. Obviously, the sun is shining and there’s so much electricity. If you think about it, it’s untapped because you don’t really have solar everywhere, which I think you’ll see a lot more solar over time. So that’s my thoughts about it. But that doesn’t eliminate natural gas. It’s still part of the energy equation. You’re going to need multiple types of power sources, solar, wind or very intermittent power sources. Obviously, with a natural gas combined cycle that you could start at any moment and obviously, like as storage becomes more prevalent, you’ll see more interim power sources as well.

William: When you’re going through that, that actually reminded me, maybe it was because we were talking about Solar City earlier in the bio or experience. I was reminded of this one speech that Elon Musk was giving where he was talking about how eventually we’re going to have to make that move towards full renewable energy sources because there’s only so much natural gas out there depending on whether you think it’s going to get burned up in the next hundred years or thousand years, wherever you stand. Eventually, we’re going to have to make that shift over to fully renewable.

We can talk on whatever time scale you’d prefer, but from your perspective, what do you think that shift from non renewables to renewables is going to end up looking like? What’s your view of the future of green energy? 

Benoy: I don’t know when that actual transition that he’s talking about is going to happen, because right now, natural gas is extremely plentiful on the earth. Specifically, the United States and then also the technology is actually getting a lot better where we could actually drill a lot deeper. So like the excavation. But the interesting thing is solar is actually getting cheaper as time goes on. I think it’s going to be a mix of different fuel sources, intermittent power sources. And what I would say, everything’s going to be distributed in the future. It’s not going to be – you have a big power plant and then, it goes through transmission distribution lines to your home and you’re turning on your electricity. How it’s going to be is, it’s going to be localized and distributed energy where people might have solar panels on their roof, maybe even small wind turbines, and then there’s some sort of storage facility that’s going to be there. So I see it as a combination of solar, wind and storage. And there’ll be obviously other technologies. There’s biomass, landfill gas, which obviously that’s like more pollution because you’re doing wood burning and garbage as well. But as we recycle more materials, I think it’s just going to be a mix of different fuel sources and then using storage and microgrids and other ways of where it’s just going to be localized and distributed energy. I just don’t know when the time frame of that’s going to happen. And I know people are hesitant to talk about nuclear power after Fukushima, but that as well as renewable resources. And maybe that [nuclear] actually comes back because it could generate such electricity. I think there’s going to be other technologies that we are not aware of but are going to basically come in the future that are renewable resources. 

William: It’s interesting to see how much innovation is really going on right now. You touched on one with battery storage and how that’s going to absolutely change the game as those batteries get better and better and you can store more and more energy. And then there are many other technologies that are being developed right now.

What are some of the technologies that you’ve seen or that you’ve heard people talking about that you’re most excited about?

 Benoy: It’s funny. Just because we’re in renewable energy, it’s hard for me to keep track of all the different technologies that are happening and then so many people are reaching out about trying different things. I’m still focused on the core technologies like, as you mentioned, battery storage to me is going to be a huge game changer and specifically like Lithium Ion technology, that’s really the technology that you’re seeing most prevalent with Tesla and all the other major battery manufacturers, and the crazy thing is like we’re seeing huge exponential decreases in the cost of the batteries. So I believe in 2 – 3 years, it’s going to be a lot more economical than it is today. And you’re going to see as well like electric vehicles that are going to be a lot cheaper in the very near future because the real cost related to the vehicle is related to the battery. So what’s crazy to me is right now you could get a Tesla at $35,000. There’ll be a lot cheaper than that in the next 2 or 3 years, which is pretty amazing then solar as well. The technology within these panel systems is amazing as well. It’s just every year, the panels are having higher capacity, and they’re also getting bigger, meaning bigger as far as the KW. I just can’t believe how quickly, the prices and the efficiency is the same thing we’re seeing with batteries, with computing power. Here’s the thing with solar panels. This is not like everyone’s kind of heard about these technologies, but I think within these technologies, like there’s a lot of technology innovations that are happening with like Bi-Facial panels and other things, it’s just really exciting.

William: It’s interesting to think about also how once you suddenly introduce this new technology, how that’s going to change the business landscape. One, battery storage that’s obviously going to change the way that the pricing of energy looks across the entire industry. But then another thing you mentioned was with these electric vehicles [EV], when you have better batteries, all of a sudden it’s much more economical for you to go and buy an electric vehicle versus going towards the sort of the vehicles we’re all used to today. My dad’s actually working on things in the EV space and we’ve seen that a lot of these car manufacturers are really seriously trying to move towards electric vehicles and are playing catch up now to companies like Tesla who’ve been developing this technology since the inception.

Benoy: It’s really exciting and also the cost of the fuel for the electric vehicle is a lot cheaper than oil. I think it’s going to be amazing, like EV and the electrification of the car fleet. I think you’re going to see very quickly and I think China is requiring by 2030 all cars to be electric, which is not that far away. If you think about it, that’s crazy.

William: Yeah that’s crazy in one decade all cars being electric in China. One thing, I’m glad you brought up China for this discussion, because the Chinese have played an enormous role within the development of solar energy. I really want to hear your perspective.

Can you talk about how you view the importance of regulation and a different approach that these different countries have taken towards regulating your particular industry. How that’s changed the competitive landscape between the companies in the US versus the companies in China.

Benoy: That’s actually a great question. That’s really interesting to me, because China is very different from the US when it comes to energy policy specifically renewable energy policy. If you look at energy storage, China, the government has invested so much money into helping these… I think there’s a part of China where it’s all basically energy storage manufacturers and they’ve helped invest in that technology billions of dollars because they believe that it’s gonna be the future, it’s the same thing as well that they have done with solar panels. Which is interesting because it’s like the polar opposite in the US. The investment tax credit that I talked about is a huge incentive related to energy and solar.  Now, there’s actually a stand alone, incentive for the investment tax credit. But it really hasn’t been like a national sort of energy policy. In the US, when it comes to renewables, it’s been more state by state, which is great that the states are taking that initiative. But it creates so much complexity because each state is totally unique into itself and there’s a huge learning curve. They also don’t have the money, and maybe the U.S. government doesn’t have the money as well, to be able to be investing in all these different things. But I think China is looking at it as a competitive advantage as they transition to renewable energy and energy storage. Which I believe is a competitive advantage, but I don’t think at this point like the US has taken an active role. But what’s been amazing is we still have the leading companies in the industry. We’re continuing to adapt and we might not have the same resources from the government, but it’s still been extremely creative. Like the solutions that U.S. companies have come when it comes to like panel technology, obvio