This story is part of the first annual Solutions Issue, sponsored by Atlanta International School. With this special report and the inaugural ATL Solutions Summit, Global Atlanta is spotlighting innovators solving global problems with market-oriented solutions emanating from Atlanta.
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Renewvia Energy’s executives never envisioned that a simple diversification play would end up spurring a transatlantic odyssey of investment and impact.
Founded in 2008, the Atlanta-based solar contractor had a healthy business in the United States, with off-grid installations helping companies reduce the power cost through solar arrays on industrial buildings and parking lots.
But Renewvia saw ominous writing on the wall as the sunset of U.S. tax credits approached in 2016: the solar industry may live and die by the federal government subsidy. Expanding into other markets where it would work on a “cash-on-cash basis” was vital to the company’s long-term health, says co-founder and CEO Trey Jarrard.
Following opportunities and personal connections, Renewvia first entered Guam, then made a risky gambit in Uruguay that paid off in lessons learned, if not returns. Then, largely out of nowhere, Kenya materialized on Renewvia’s horizon.
At the time, President Obama’s $7 billion Power Africa initiative sought to address the fact that more than 600 million people on a continent of more than a billion lacked access to reliable electricity.
In cases where it did exist, power infrastructure was often dirty (diesel-generated) and unreliable (subject to blackouts and brownouts). Renewables, the administration hypothesized, could be part of the solution for a cleaner, more resilient grid. Turning the lights on would also mean fewer kerosene lamps, reducing the risk of devastating fires. And locals wouldn’t have to travel to another village to charge their now-ubiquitous smartphones.
The U.S. Trade Development Agency, a division of the Commerce Department, allocated cash through Power Africa for off-grid solar feasibility studies. The catch: a qualified, U.S.-domiciled company had to do the research.
Renewvia had already been working in Kenya via a personal contact who became its first hire there, partnering with local governments on mini-grid projects in remote fishing communities along Lake Victoria.
“We checked the boxes and just happened to be in-country, which opened our eyes to the total greenfield opportunity,” Mr. Jarrard told Global Atlanta.
Soon, Renewvia was tapped for national studies and got connected with Kenyan authorities in charge of permitting, setting the stage for expansion into different regions and work with development finance institutions and multinational aid agencies.
Cobbling together grant funds, more than $17 million in investment capital and other sources, the company has delivered about 24 projects and 8,000 home and business connections.
“Our permitted portfolio is about five times larger than that,” Mr. Jarrard said, noting that Renewvia hopes to have enabled 100,000 connections by 2026.
For now, Renewvia systems, installed with partners in the communities where it works, power multiple villages and refugee camps within Kenya.
It’s a different world when it comes to scale and installation tactics, but Africa lets Renewvia engage communities in a different way and see the impact on lives almost immediately.
“We don’t show up with big trucks; we don’t have the benefit of installing with the most tech advanced equipment,” Mr. Jarrard said while sharing village photos during a keynote presentation at the ATL Solutions Summit sponsored by Atlanta International School. “You have to be creative, you have to get things places with unconventional transport. It looks vastly different.”
Rather than profit, key performance indicators are metrics like gender equality, productivity, safety, health and business growth — all things access to power infrastructure enables.
Nigeria is now a solid second market for Renewvia, with one of the country’s largest banks recently deploying its first rooftop installation and studying more investment across its 600-branch network.
Ethiopia recently became the third country in which Renewvia Africa has set up a subsidiary. It’s one of three firms partnering on an initiative funded by the Global Energy Alliance for People and Planet, a blockbuster group that includes IKEA, the Bezos Earth Fund and the Rockefeller Foundation.
In some ways, the company went around the world to watch a rerun of its founding drama.
Renewia had sought to own and operate solar farms at its outset but recalibrated when Mr. Jarrard and co-founder Eric Domescik looked at the long-term capital that the model required.
Similarly, after some of the early Africa projects underperformed financially, Renewvia has once again tweaked its model to focus on creating greater scale as a commercial developer. Rather than one-off mini-grids, it’s focusing more on “metro grids,” Mr. Jarrard said — working in areas where the means and appetite to pay for power is stronger.
“It’s still the same profile. It’s just larger, denser areas, creating impact but at a lower cost per connection,” he said.
That will ultimately help Renewvia raise the capital it needs to build larger projects, providing a more solid financial footing for some of the rural projects that can be buttressed by development finance and government subsidies, Mr. Jarrard added.
Crypto and Carbon Credits
Another way to start scaling up significantly may also lie with a solution that Renewvia built for its own reporting needs but is starting to offer to the world.
Much like it had to develop its own payment interface to allow Kenyan villagers to use mobile money platforms like M-Pesa to prepay for power just like cell phone minutes, Renewvia has built its own reporting mechanism to track the carbon emissions that its projects help save.
They come in the form of a blockchain-enabled instrument called R-RECs (Renewvia Renewable Energy Credits) a sort of cryptocurrency for carbon offsets. The R-REC is connected in real-time via APIs with Renewvia’s solar grids, with a new “coin” being issued with each metric ton offset by the energy the grids produce.
Basing the credits on blockchain solves a couple of problems, according to Mr. Jarrard. Heavy emitters like airlines are now spending billions of dollars on credits of dubious provenance, often with a markup from third-party verification services that can’t tie the emissions savings to real projects. Mr. Jarrard cited recent revelations that South Pole, the world’s largest purveyor of offsets, sold millions of dollars in bogus credits.
Basing R-RECs on its solar grids’ output and a transparent blockchain means that it’s “100 percent verifiable and auditable,” Mr. Jarrard said. Any change in an R-REC’s ownership is viewable in a distributed ledger.
Producers of renewable energy, meanwhile, don’t have a standardized way to monetize the credits they produce.
“Our theory is we can create an efficiency in this whole market which right now is handicapping both ends,” Mr. Jarrard said.
For off-grid solar development in Africa, such a marketplace could be a boon, with the “holy grail” being the forward selling of credits to subsidize the upfront costs of rural projects that wouldn’t be viable on their own.
“We’ve kind of backed into this juggernaut,” Mr. Jarrard said of Renewvia dipping its toe into the massive carbon finance pool.
Ironically, Solar Subsidies Are Driving Strong U.S. Demand
Meanwhile, the very prospect that spurred Renewvia’s international journey — that subsidies might dry up — has actually moved in the opposite direction as the U.S. continues to back solar on multiple fronts.
The Inflation Reduction Act extended a 30 percent federal tax credit for solar installations through 2032, while also heavily incentivizing more domestic production of raw materials, cells and panels.
Tariffs on Chinese producers have provided some shelter for U.S. manufacturers, including in Georgia, where Qcells operates North America’s largest module facility and long-dormant Suniva is planning to ramp up cell manufacturing again.
The U.S. has also allocated $10 billion to offset the cost of solar projects of 5 megawatts or less in disadvantaged communities, including places that have been affected by the closure of coal-fired power plants.
Meanwhile, tech companies are trying to meet their decarbonization goals by buying solar power for energy-hungry data centers, driving healthy utility-scale solar demand — another trend benefiting installations in Georgia and the Southeast U.S.
“(Government support) is about as aggressive as we’ve seen since we’ve been looking at different finance scenarios in this sector,” Mr. Jarrard said.
Renewvia is participating in this through a utility division it spun up a few years ago as a calculated bet. On Nov. 8, the company announced it had closed a loan of $15 million from Treehouse Development Finance toward its 2-gigawatt pipeline of utility-scale solar projects.
Renewvia is seeking to raise an additional $30 million to continue scaling both at home and in Africa, where its ambitions have expanded in line with the need and opportunity, despite its measured approach so far, Mr. Jarrard said.
Financing models are now well-established, he said, and the mistakes of the past seven years have helped Renewvia refine its approach.
“We hope that we can be the largest commercial off-grid developer on the continent in the not too distant future; that’s our goal. We are in the frontrunner position, the leading positioning the geography right now.”