Jigar Shah's Thoughts on the State of Energy Management

February 5, 2020

Focusing on sustainability and energy efficiency, the Modern Energy Management podcast invites innovators to discuss energy best practices that go beyond the meter. In this episode, we invited Jigar Shah to give his thoughts on the state of energy management.

Jigar Shah is undoubtedly one of the luminaries in the field. Currently the co-founder and President of Generate Capital and formerly the founder and CEO of SunEdison, Mr. Shah has long been at the forefront of new ideas and approaches to changing the way energy is used and managed. As the originator of the “no money down solar” concept, his impact continues to be felt across the continuum of sustainable energy technology and practices.

Riding the “Solarcoaster”

Since founding SunEdison in 2003, Jigar has seen the industry grow and change in innumerable ways. From conferences at small venues attended by folks in “T-shirts, a lot of flip flops, a lot of long hair” and the progression to “monster conference centers and suits and venture capitalists,” Shah has seen many of the industry’s ups and downs. But even as the renewables and energy efficiency markets continue to grow, he recognizes that we still have a long way to go.

Getting People ‘Jazzed’ About Energy Use

Jigar believes that the idea of a “40% reduction of 40% of energy consumption coming from the built environment” is a difficult concept to get jazzed about. For him, helping people understand how buildings learn and use energy is what gets people excited.

For years, building management tools and the limited data they generated were only accessible by small groups of building operators. Over time, the amount of data available grew exponentially and overwhelmed managers. So much raw data left them asking, “what do you want me to do about it?”

Today’s modern technology changes all that by giving everyone access to rich data sets via dashboards with which they can actually interact. With a wider array of people monitoring the data, they can now send a weekly email to building staff and offer specific actions that can be taken to reduce energy use. And when people are engaged with the data, progress happens much more quickly.

SaaS for Energy Management

Software as a service has transformed modern business. And now it’s transforming energy management. The promise of doing more with fewer employees has built a real value proposition for this new approach. For example, instead of simply maintaining HVAC systems and dealing with light bulbs that have gone out, teams are now able to apply their knowledge in ways that help the most people. The result is that “folks are a lot happier because they're saying, ‘gosh… more stuff is getting done with the same staff.’”

What’s more, Shah says, is that people working in these modern environments are able to add to their organization’s bottom line. With access to all this new information, staff can ask, “what if we shift when the air conditioning system turns on and when the lights turn on and we actually get paid by the utility company to do those shifts?” In this way, staff are providing an extraordinary amount of additional revenue streams and cost savings to their companies.

Moving Away From Energy Efficiency?

In Mr. Shah’s view, modern energy systems have always been sold on the promise of energy efficiency. But for him, that’s not the most compelling reason to have one. Of course, he notes, that the savings generated by these systems make them “practically free” for the institutions. But to his mind, users should be considering the ways in which buildings impact employees and stakeholders. “How is the health of your buildings core to your mission?”

Energy management is a gateway to organizational goals. As the focus of climate change and greenhouse emissions grows year by year, it has become a mandate for decision-making and prioritization of goals. Beyond thinking about how the systems can subsidize major equipment upgrades, energy management gives users a way to think about real estate holistically and address big challenges for society.

Net Zero Is Now

According to Shah, every building and every set of buildings can achieve net zero energy use right now. Technology is not the gating factor, though it may require a 30-40 year payback in some cases. But with recent legislation like the New York Green New Deal, he believes that building owners will discover that the process to comply with new regulations will be much easier and faster than they ever thought possible. He believes that they’ll discover “a pot of money” and be confronted by the reality of progress that the technology has enabled.

Optimization over Efficiency

For some, ‘energy efficiency’ evokes thoughts of sacrifice. In his mind, Jigar believes that the industry needs to change its narrative to talk about ‘energy optimization.’ But while changing the narrative will change people’s perspective, Mr. Shah does not believe it will go far enough.

To put it simply, he believes mandates from governments are the only way to move forward. Rebates and subsidies have provided incentives for energy reduction but may in fact have kept the industry from taking off. While the country spends nearly $98 billion on these incentives, he believes just one-tenth of that amount could provide modern energy management software to every building owner…and help us meet most, if not all, of our goals for 80% reduction of carbon emissions by 2027.

Continuous Improvement

The industry is awash in buzzwords these days…Artificial intelligence, machine learning, blockchain. While Shah believes these technologies will have a significant impact on energy usage and sustainability, his focus is on something much more prosaic.

Continuous improvement in software and hardware can be a major factor in moving the industry forward and in reaching the goals that people and organizations have for their buildings and the environment.

People, too, must strive for that improvement. Energy managers and staff should recognize that while their roles may not feel mission-critical today, they are likely to become so. As sustainability impacts the bottom line, changes employees’ relationship with their buildings and becomes a driver of value for companies, sustainability managers will become central to the success of the company.

“If you're not used to that level of attention, I think you better start preparing yourself for it because I think you're going to start getting called on by the teacher in the front of the class here.”