Episode 152: Mike Hall, CEO of Borrego
This week's guest is Mike Hall, CEO of Borrego.
Borrego is a leading developer, EPC and O&M provider accelerating the delivery of large commercial, community solar, and utility-scale solar and energy storage projects in the United States.
With a background in Chemical Engineering, Mike is the 3rd co-founder of Borrego, then Borrego Solar. The origins of the company date back to the early 1980s when a family friend built an off-grid PV-powered home in Borrego Springs. When Mike's brother, Aaron, graduated from college, he started a rooftop solar business out of their family garage, and Borrego Solar was born. This year, Borrego Solar rebranded to Borrego and expanded its efforts to accelerate renewable energy adoption to meet increasing demand. Mike also sits on the board of Metrus Energy and Solar Energy Industries Association.
Mike and I have a fantastic discussion about Borrego, its evolution, and the solar and renewable energy sector more broadly. Mike explains the history of the solar market, the importance of policy at the state level, and how the various types of energy markets need different solutions. We also dive into the problem of intermittency, seasonal energy storage, and dirty peaker plants. Mike has been in the solar and renewable energy sector since the early 2000s. It was great to have in join me this week.
Enjoy the show!
You can find me on Twitter @jjacobs22 or @mcjpod and email at info@myclimatejourney.co, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded March 31st, 2021.
In Today's episode we cover:
An overview of Borrego and the company’s origin story
History of the solar market at the start of Borrego and where it is now
Customer adoption and satisfaction
Biggest drivers of bringing the cost of solar down and key takeaways for other technologies
The role of policy and government at the federal and state level
Sourcing talent for solar jobs
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Jason Jacobs: Hey everyone. Jason here, I am the My Climate Journey show host. Before we get going, I wanted to take a minute and tell you about the My Climate Journey or MCJ as we call it, membership option. Membership came to be because there were a bunch of people that were listening to the show that weren't just looking for education, but there were longing for a peer group as well. So we set up a Slack community for those people that's now mushroomed into more than 1300 members. There is an application to become a member. It's not an exclusive thing.
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Today's guest is Mike Hall, CEO of Borrego Energy. Borrego is on a mission to accelerate the adoption of renewable energy. They have a complete suite of renewable energy services, three independent business units, development, EPC, and O&M or solar maintenance and repair. Now, Mike is a board member for Borrego and he was also one of the original co-founders of the business, joining his brother, Aaron at what was at the time called Borrego Solar in 2002. So Mike seen a lot of twists and turns in the solar industry and in the broader energy industry. And we have a great discussion in this episode about what the landscape looked like when they started the company so many years ago, how they've navigated the twists and turns along the way, how solar has evolved.
What some of the big levers are that have led to its increasing deployment, where it stands today, some of the barriers holding it back, and we also talk about storage. We talk about policy, we talk about things like perovskites and a bunch of other things about solar renewables and how they fit into the clean energy transition. Mike, welcome to the show.
Mike Hall: Yeah. Thanks. Thanks for having me, Jason.
Jason Jacobs: Thanks for being here. I'm excited for this one. This is a topic area that has come up so many times and I don't think we've put it front, center yet. We've got hit it from some adjacent angles, but you're kinda right in the trenches doing the hard work, which is who we wanna hear from. So thanks for agreeing to do this.
Mike Hall: Yeah, of course. Yeah.
Jason Jacobs: So why don't we just take it from the top? What is Borrego?
Mike Hall: Yeah, so Borrego, we work in the downstream part of primarily solar and storage, but renewable energy broadly. And we work with companies that own renewable energy projects and for those companies, so they're generally Independent Power Producers, IPPs and some regulated utilities. You have the authority to own generation, but for those companies we provide them full lifecycle services. So they need projects to invest in, and so we have a Greenfield development business where we sell projects, typically at the shovel-ready stage for them to invest in, then they need those projects delivered.
And we do that through our delivery business, which is primarily a classic EPC full wrap, but also we do some interesting things for customers on the major material procurement side, through a new business line we launched. And then after the systems are up and running, we have an O&M business where we do preventative maintenance, repair work, technology upgrades, disaster recovery, re-powering and so it's full life cycle services. And so, some of our customers contract with us across two or three of those lines and some just across one, we really try and meet the customers where they're at. And we have historically really been focused on what we call the middle market, which is C&I, solar, solar plus storage, and then community solar.
And within that market last year, like Wood Mackenzie in their leaderboard, we were the number one EPC provider with about 11, 11 and a half percent share. I think we were about double the number two provider, but we've, in 2019, we really changed the scope and the vision for the company to try and move from being a middle market leader, to figuring out how we can leave the entire market and gigawatts developed, delivered, and maintained. And so we have been moving into the utility scale market, the sub 200 megawatt utility scale market. That's basically, who we are, we're about 450 people in the West, the Midwest and the Northeast primarily.
And we've been at this for a long time. I started with Borrego, co-founding it, not quite see, 19 years ago [laughs]. So we've been around for a long time in the renewable energy industry, you know, trying to fight a good fight and change the world.
Jason Jacobs: What's the origin story for the company? How did it come about and why?
Mike Hall: [laughs] So it's an interesting story. So the origins, like the real start actually dates all the way back to the early '80s where this gentleman named Jim Rickard, who was a professor at San Diego State and astrophysics and his wife, Grace Rickard, they moved out to Borrego Springs is where the name comes from, which is an Eastern San Diego County. And there was no great infrastructure out there, and so they built an off-grid PV powered home, and then a few other people slowly started moving out to Borrego Springs. And so they were building two to three PV power springs a year. And so it's this very small side business throughout the '80s and '90s.
And then in 2000, my brother Aaron Hall was in college at Northwestern. He took an entrepreneurship class and had to write a business plan and he was home for think like something for like spring break or something. And he was talking to Jim who was a family friend and they wrote up a fictitious business plan to actually do PPAs, grid connected PPAs in California. And when my brother graduated from college, he, he had always been an entrepreneur. And so he convinced my dad and Jim each put in 20K and they started a garage business doing rooftop solar on people's homes, started with friends and families and expanded from there.
So the company was refounding became my family's business in 2001. Yeah, and it was a real garage business. We had a garage [laughs] at my family's house, my parents' house in San Diego and I'm the third co-founder. And we worked out with his boss in Berkeley and you know, it was real humble roots. We would go into people's homes, try and sell them five kilowatt systems and then come back a couple of weeks later with a tool belt and put it in ourselves. So yeah, it's grown from there. It's been, it's been a really fun ride.
Jason Jacobs: And maybe talk a bit about what, um, solar market looked like at that time and compare and contrast that to, to where it sits today.
Mike Hall: Yeah. It was really different in almost every way. So it is tiny. So the whole solar market in the US was maybe a couple few megawatts, like that was annual installs. Now, if you drive around a California suburb, you see PV panels on, you know, like every fifth home, back then you didn't see anywhere. Like there were basically none. We were putting the first ones in. The industry was tiny. I remember going to my first sitting, called it SPI back then, but it was the equivalent conference and they fit everybody in a ballroom. So it was quite small.
And the technology was, was really far from where it is today on every level. So things were expensive. So solar modules costs, they were, they were bouncing up and down, but they got up to about four bucks, a watt. And when I started, they were in like the mid threes. They went down to three and then they went up to four bucks, a watt, the form factors were really small. We started, we were installing like 110 and 120 watt modules. And the technology is really unsophisticated. The first grid tightened burgers, we put in had 100% failure rates. They all had to be repaired. And even [laughs] when I really, when the very beginning, they fix this pretty quickly, just to give you a sense of how immature the technology was, we had to like unpack the panels, the solar modules, and they had no connectors on them.
So we actually had to open up the junction box in the back of each panel and hardwire in some conductors and then run flexible conduit between each solar module. So that's just like how immature the product and supply chain was. It got better real quick within a year of me starting in this industry. They figured out that wiring problem and SMA made an inverter that actually worked. And so things, things started getting better quickly, but it was pretty immature. And really, we were all figuring it out. Stuff just didn't come out of the box and work. So it was fun but different, yeah.
Jason Jacobs: And how would you characterize where we are now both relative to them, but also relative to where we need to go?
Mike Hall: Yeah. Well, we've come a long way. I mean, so I, I don't think that we dreamed that it would be possible to build solar power plants even at the megawatt scale at around dollar watt. I know, no, they don't generally actually cost a dollar a watt all in, but we're pretty close to that. I mean, when we first started, it was eight and $9 a watt even for commercial scale. And so we've come really far on the cost side, and I think we have further to go on the quality side, but we've come a long way in the quality side in some, terms of the products, the industry is obviously much larger. And I think the most just I talked to our team about this all the time.
The most exciting thing for me having been in this industry for almost two decades is that probably for the last one to two years, there's really been a paradigm shift where it's gone from what it was like when I started, which is, Hey, let's really try and get a lot of renewables in and get a piece of the pie and show that renewables can be a replacement for fossil fuel. And that there is another way of doing things to now, it's a situation where I think everybody accepts that the future is a renewable feature, right? It's just a question of how fast we get there.
At some point in the future, it's gonna be a lot of solar, a lot of wind, a lot of storage and exactly what that storage looks like. We'll see, and not a lot of fossil fuels and it's become evitable. And it wasn't at all inevitable when I started. So that's probably been the most exciting part of this journey is just reaching that point and seeing that it's coming. And now it's just a question of how fast we can make it happen. So, that's been great.
Jason Jacobs: And what about from a customer adoption standpoint, so where are we now in terms of penetration and then where are we now in terms of satisfaction for customers that do take on these pretty significant complicated projects?
Mike Hall: Yeah, that's a great question. So I mean, nationally, our penetration is still quite small. I think we're about, and I think globally even, we're still just a few points of the total energy mix, so there's a lot of room to grow. And I think, you know, we're continuing to see that in the market, we're continuing to see demand grow and there's a lot of different pockets of demand, and we can talk about that. And then when you ask about customer satisfaction, I think there's different customer segments. There's the starting with the small, there's the residential segment, which is where we started, but where we actually don't play and participate anymore.
There's the, what people call C&I, which there may talk about that. They're generally talking about behind the meter, what we call behind meter solar, where you're putting solar on top of a building or in a parking lot, or in land adjacent to the building. You're directly feeding that building with solar. And you could also couple that with storage for various applications, cost savings applications or backup applications. And then there are utilities who are buying for compliance requirements. And then there are corporations who are large buyers and are buying such large amounts that they're generally not mostly investing in those onsite projects.
They just can't get enough, and they're buying from offsite power plants using PPAs or virtual PPAs and things like that. And I think by, if I were to just generally, I think by and large, the market is satisfied. The technology has been proven to work, but there's, there's always room for improvement. And I think, yeah, I think there are a number of ways. I mean, I think going in reverse the utilities and the grid operators, you know, especially out here in California have started to realize, okay, if we're gonna have a lot of solar penetration, that's great, but it starts to cause issues, it causes issues like the duck curve, they've had to curtail lots of, not just solar, but renewables generally.
And so they're starting to grapple with really what it means to be successful [laughs] in pursuing your renewable energy goals and having a lot of penetration. I'm further away from the consumer side. I think generally consumers are happy. There have been some stories about consumer issues, which I'm not on it. Well, I mean, I'm not really an expert on, but, but I know that the industry association has dealt with consumer protection and trying to put in place consumer protection rules and best practices and negotiating with regulators over that. So, yeah, I think there've been those, those issues of, you know, like salespeople maybe taking advantage of unsophisticated buyers.
I think it's a really small percentage of the total market, but it has happened. I think on the commercial side, I think customers have, again by and large, been really happy with the purchases. And we worked a lot in the public sector for a long time and really were able to save school districts and community colleges and public entities, airports, a lot of money. And I think, I guess one thing I'll say there is I think that the behind the meter customers, whether they be corporate or government who realized that when they bought these systems and they were making these purchases, that there is a maintenance obligation along with them and budgeted for that and plan for that I think have done well and been happy.
I think there have been some, I think less recently, but more in kind of the mid early days behind the meter customers who purchase these things. There are others new moving parts with no maintenance and they've maybe had unpleasant surprises that yeah, these, these systems while they are simple and they do have generally great availability, they do require maintenance, but preventative maintenance and reactive maintenance, if you wanna get that return on investment. And so if you go into it, knowing what you're going into, then I think you're generally happy.
Jason Jacobs: Given how far the costs have come down, what do you think the biggest drivers were of that? And what are the key takeaways there as we maybe look at other technologies that are less mature?
Mike Hall: Yeah. So there's been a few major contributors, I mean the most obvious one is just the price of the generating component itself. So the solar modules, like I said, when we started, they were call it $4 a watt and now they sell for 30 cents a watt. So you're talking more than 90% reduction in costs. So that's been tremendous. That hasn't been all of it, a lot of it has been just the sophistication and maturity of the technology and the engineering of the products generally. So like the extreme case, the fact that when I started, you had to hardwire those panels and now they just snapped together.
But the form factor also has changed massively. So it is much less expensive to build a system when each block that you handle is three or 400 Watts, than when each block you handle is a 100 Watts. So, and the efficiency has been driven up. So for every square feet of glass you're handling, you're getting a lot more Watts. The inverter efficiencies have been driven up, the physical structural systems that you use to mount the things either on the ground or on the roof are much easier to put together. And people at the other infraction of the labor hours, the labor force has been trained and can be much more productive than we were in the early days when everybody was doing it for the first time.
Soft costs, in particular, I think soft costs and customer acquisition costs are still shockingly high on in the residential market, but in our markets they've come way down. I mean, our customer acquisition costs are like under 1%, the engineering tool set has improved. So [laughs] when I started, we had to do custom spreadsheets just to do really simple engineering counts, like how many modules we could have in a string on an inverter. And now they're tools that just spit out the answers. And so you can do the engineering work and design work in a fraction of time.
So it's been innovation across a number of different fronts. And I think there's more of that to come. Although I think the, a lot of the, I think continued cost declines are gonna come from, I think, changes in the way the market works, changes in the way supply chain connects to the end customers. I think there's some business model changes from here that might drive kind of the next wave of cost reduction and value creation. There's still a little more juice to squeeze out of the lemon, but you know, there's a lot less juice at a dollar than there was in $9. And so I think business model innovation is on the horizon. I think that's gonna be probably the next wave of driving value and cost reduction.
Jason Jacobs: How big a role did government play, whether it be subsidies Su- SunShot program or, or others. I mean, was, was that, was that an essential component of these deployment gains or yeah. Curious, your take there.
Mike Hall: Oh, yeah. So it totally was. So I think when you said government, the federal government has played a role in, and I can speak to that before I do that, I just wanna say that state leadership has driven a lot, state level leadership has driven a lot of this growth. And so-
Jason Jacobs: We can have an episode with Adam Browning, so-
Mike Hall: Ah.
Jason Jacobs: ... we, we talked a lot about that [laughs].
Mike Hall: Yeah. Adam is one of the few people I think he might predate me to, by just a little bit. Yeah. So Adam has been working on those issues since the very, very beginning, but yeah. So in California there were early day subsidy programs that right, you know, now look kinda unbelievably lucrative, but at the time were really necessary. So there was a, for example, ****Commercial Rebate Program where you got $4 and 50 cents a watt cash rebate, which now seems insane. But at the time you couldn't get a project done without it. And then actually they Republican governor Arnold Schwarzenegger, passed this really massive legislation to do three gigawatts of DG solar in California.
I'm trying to remember that, it's been so long can't remember the name of the bill, but it was transformative for the industry. And then there's been renewable portfolio standards that have driven the utility scale market in Cal- starting in California, but moved to many other States. We also, we have a large business in New England, actually the, our office with the most people, our biggest office is in Lowell, Massachusetts. And that a lot of the growth there was driven by state level policy that was put in place under the Deval Patrick administration. And they did something really interesting that I think was kinda the precursor of the community solar market, which was, is this bill called the Green Communities Act where they realized that one of the problems with kind of megawatt scale solar was, Hey, you need to find really the perfect site that has all the right attributes.
You need to find a low cost site to put the system. You need to find that low cost site needs to be owner occupied. It needs to have the right usage profile. It needs to be on the right rate schedule. And so they passed this Green Communities Act, which allowed you to decouple those things and say, you have the right site here and I can sell the power to another consumer within the same load zone that needs it. And that was wildly successful. They coupled that with an SREC program. That program has, they've been a number of programs that have kind of riffed off by over time. But I think it really kicked off the community solar market.
So state level policies and big federal policies also had the investment tax credit for the majority of my career in solar and that's stimulated tremendous amount of growth. And also just brought a lot of capital into the market tax advantage, entities who do tax advantage investing have really brought, you know, a tremendous amount of capital into renewable energy. So, that's helped. And then I think during like the great recession, certainly the DOE loan program helped make a lot of large scale projects happen that would not have happened otherwise. And also there is the, in the reinvestment act, there were clean renewable energy bonds that drove a lot of C&I solar for government entity.
So there's been a lot of support along the way. It's, it's less of a factor now because the cost of solar energies, competitive with fossil fuels with minimal subsidies. So, but, you know, over the two decades I've been doing this, it's been a tremendously important part.
Jason Jacobs: So how much do you think about and resource towards advocacy at the policy level, if at all?
Mike Hall: A lot [laughs]. So we have an amazing policy team and I, they can't actually, it's a number of people I'm trying to remember how many people it is, but it's more than five led by our VP, [Elon Veteres 00:23:25]. And we primarily work at the state level, although we are doing some work at the federal level in particular, more monitoring, but some participation in FERC for proceedings, but classically we've been very active through SIA and other local industry organizations and helping to lead advocacy and development of regulations. And even at times legislative action.
So in the markets that we're in, we tend to take a try and take a policy leadership position. So very active in Massachusetts, New York, Illinois, California, some of the emerging community, solar markets or potential community solar markets like Virginia and Pennsylvania. So, it's a big area of focus for us. It's, I think it's really important.
Jason Jacobs: I don't remember the latest figures from a penetration standpoint, but I, I know that they're much higher than they were and much lower than we need them to be. So, and if, if you know them, by the way, I, I'd love to know.
Mike Hall: Yeah. I don't wanna give you wrong numbers, but yeah. It seemed the single digits-
Jason Jacobs: Uh-huh [affirmative]
Mike Hall: ... for sure. Yeah.
Jason Jacobs: But when you think about the ground that's left to cover, what are the keys? You know, what, what needs to happen? You know, what are the, whether it's one lever or two levers or three levers, or like, what are the big things that need to happen in order for us to get there?
Mike Hall: Yeah, I think, I think there are a few different levers. I think that, so I think there's different, there's different problems depending on what type of market you're in. If you're in a new market, then I think there are baseline policies, regulations that need to be put in place to allow solar to compete. And, you know, some, I mean the power market, the power industry is so complicated because each state really has its own way of functioning. So there are deregulated markets and there are different flavors of deregulations. They are regulated markets where the utilities control everything from generation all the way through to distribution.
And so in those different markets, you need to either reform the markets or have a different policy strategy. So if you're in a regulated market where the utilities own everything from generation, all the way through to distribution and the only way to get renewable energy adoption is through the regulated utility. So you, you need to work with the regulated utility and the public utilities commission to, for so called incentivize the utility to move from fossil fuels to renewables. And that's actually really hard for the private sector to do. So that's, that's a challenging one. In less regulated markets, you need to make sure that the economics allow solar to compete.
It definitely helps to have a stick part with an RPS, with some kind of alternative compliance penalty. If the utilities aren't making the standard, it's really hard to motivate change without some mandate for change. But there's policies beyond that, that I think are needed to make, to really create a level playing field so that renewables can compete. And, you know, it's different in different markets. S- so those are important things. In markets where you have a lot more penetration, you're starting to deal with real issues around intermittency and what that creates like the ducker problem in California and the curtailment.
And you need to really think about how you're gonna solve those problems and create the right incentive structure of markets to get a lot of storage adoption so that you can continue to increase penetration of renewables without creating problems on the grid. So there, I wish there were like a few silver bullets that would solve all the problems, but you really need a lot of different solutions and those solutions need to be customized to the market situation you're in.
Jason Jacobs: When you think about the de- decarbonized future, do you think about, and it's, I mean, it's only a one word difference, so it's, you can say it semantics, but are, are we, should we aspire to 100% clean future or 100% renewables future?
Mike Hall: Okay. So you're like asking about like nuclear or carbon, capture or things like that.
Jason Jacobs: Yeah. I'm, I'm mostly asking, I guess one, can renewables get there and two, even if it can, like, is that the goal or the goal just to get to clean as, as quickly and efficiently as possible?
Mike Hall: Yeah, it's a good question. I think if it's truly clean personally, I believe we should get the clean as quickly as possible. I think you get into, I think you can get into arguments and debates about what's really clean, like is nuclear clean and there's different types of nuclear and I'm not an expert in nuclear, so I'd probably prefer not to like go down that rabbit hole, but if you can agree on a definition of clean, then I think, yeah, I don't think it necessarily has to be all renewable. It's hard for me to see what else there is, that's viable and cost-effective just from where I'm sitting.
And like, I haven't, I haven't seen viable plans. I mean, I understand why there are people really interested in carbon sequestration and in principle, I'm not opposed to it, but like it just, it looks quite expensive. It looks really challenging to deploy. It looks really challenging to scale. And just having been around the industry a long time and seeing how there are incumbents who have inertia, whether they be in the power industry or whether they be in the, generally in the energy industry, in the fossil fuel segment, you know, they have an interest in protecting the value of existing assets [laughs].
And so carbon sequestration is a way to do that. And so, yeah, it just, I haven't seen a viable path that isn't almost all renewables. But not opposed to it, if there is one, I just haven't seen it, yeah.
Jason Jacobs: So I mean, caveat here is I am far from an expert, but it seems if I asked different people about, for example, is solar clean. The answer I get is that it depends 'cause some of it depends on the baseload power and what the source of that is. And is it coming from fossil fuels or from natural gas or, or things like that. So how do you think about that is solar clean? Does it depend and what does it depend on if so?
Mike Hall: I definitely think it's clean. I'm having trouble imagining a case where there's a viable argument for not being clean. I think it's more or less clean depending on what you're replacing. Yeah, if you're replacing coal, then it's cleanliness. You're replacing natural gas, it's still very clean. Fewer retiring nuclear plant, again, there's an argument is nuclear clean or not, but maybe you start to be like, oh, okay. Well, that wasn't a fossil fuel. It wasn't emitting carbon. And so, you know, that's different. But yeah, I, I haven't, I haven't, I think it's clean in all cases. And ***[inaudible 00:30:47], yeah.
Jason Jacobs: I think, and I, I don't wanna misspeak here, but I think the argument is that until storage gets solved, long-duration storage, then intermittency is such that you need to use something to fill the significant gaps and, and the lowest cost options in many places today are still dirty.
Mike Hall: Yeah, so, okay. Now a little better. Yeah, so I still have not seen any math or economics or study that show that adding solar and replacing fossil fuels, even with the challenge of the intermittency and the need to have dirty peakers-
Jason Jacobs: Peakers. Yeah, I didn't mention peakers, but that was the word I was looking for.
Mike Hall: Yeah, peaker plants.
Jason Jacobs: Yeah.
Mike Hall: Yeah, peaker plants. Peaker plants around still isn't a huge net positive in terms of carbon. That being said, I think you're hitting on a good point, which is that as you get more solar penetration, you do need to think about how you're gonna deal with the intermittency and how you deal with it cleanly. And we are seeing some states start to take this problem on. Actually Massachusetts had something called, it's called the Clean Peak Standard, where they're trying to deal with exactly that. They're saying, "Hey, we, during peak times, we wanna make sure that we're dealing with that excess capacity need not through dirty sources, but with clean sources." And so that might be, in their case, it's gonna be mostly energy storage, probably mostly that lithium-ion battery energy storage.
But yeah, I mean, that's a problem you need to deal with. There are ways to deal with the capacity need that are clean. And so you would make solar cleaner. Yeah, it's sorta less clean if when the cloud comes over or when the, you hit the net of the dock, you're turning on something really dirty. Yeah, I, again, I haven't seen anything that says it's still not better than the alternative. But yeah, we should deal with that problem. We should deal with the ramping needs, we should deal with the intermittency and there are ways to deal with it. Yeah, you said long-duration storage and I, I think long-durations will true and it depends what you mean by long-duration storage for to have like four and six hours or whether you're talking about days and weeks.
Jason Jacobs: Well, it depends what we need, right? I mean, I've heard at least from some that we need seasonal storage should truly account for the intermittency in much of the world.
Mike Hall: Yeah.
Jason Jacobs: But so, yeah, but I guess, if, if one would, would take issue with whether we actually need to add on whether it's as big a problem as people say, then that's something different.
Mike Hall: Yeah, so not having, I'm not an academic, there are organizations that do these studies and do these long-term models. And I think there are different perspectives on the need for seasonal storage. Personally, just logically, it makes sense to me that we would need seasonal storage. We're gonna have a bunch of solar. It's mostly gonna produce in the summer and the shoulder season. It's not gonna produce much in the winter. And especially if we're gonna do as much electrification as we wanna do and move to like electric heating, you're gonna need a lot of power in the winter.
And so I think the idea of, I don't think we're at the point where it's, it's the issue, but if we're talking about 100% or 90% or 80%, you know, over the next few decades, Biden's 2050 plan, then it makes sense to me that you would need seasonal storage. And I don't think that seasonal storage is gonna be lithium-ion batteries. But I think there are solutions. There are solutions. I mean, I bet- I think green hydrogen and the idea of electrolysis and, uh, and fuel cell and, and using gas as a storage mechanism, which scales with steel tanks [laughs] as opposed to lithium-ion modules makes a ton of sense, but we're at the very early stages of the need. And so we're at the very early stages of the deployment too. But yeah, I mean, I logically it feels like that isn't needed.
Jason Jacobs: So in your business then or I guess, your three businesses, as you said, when you think about that tip of the spear innovation, whether it's flow batteries or green hydrogen or fuel cells or other things that you mentioned, how much do you need to think about that? How much do you need to try to pick winners and guess what the future will be and, and are you putting any capital to work in, in those areas or engaging with those companies that are maybe pre- predeployed ready?
Mike Hall: Yeah, we talk about it all the time. It's, I mean, where, where we are, we need to be just slightly ahead of the market demand, not five and 10 years ahead because we're not developing the technology. We'll partner with the technology providers and actually our CEO, Mark Swanson was just talking to me about some long-duration storage providers and how we might be able to partner with them on pilot projects. And we may do some of that, but we need to be just slightly ahead of where the market demand is.
And so we have not yet seen a market signal telling us that we need to do more than four, six hours of storage. And, you know, I, when that comes, we'll need to be slightly ahead of it when it comes. And so yeah, I think we do talk to alternative chemistry battery providers. We're interested in green hydrogen and I poked around a little bit and I think that's a really exciting area that I personally just think makes a lot of sense. But we're just, there's not a lot of demand in the US right now. And so it's not a big focus of ours. But yeah, I think over the next 10 years, it'll probably change.
Jason Jacobs: And what about when it comes to the actual, you know, materials that go into the panels and, and things like that, is it the same answer or how, how do you think about that stuff?
Mike Hall: The materials that goes in the panel. So, I mean, the materials like-
Jason Jacobs: What pros guide or just as new breakthroughs come out, I mean, do you, do you feel like the market's kinda decided and standardize around, around the materials that are used today? Or is that still up for grabs in some regard?
Mike Hall: Yeah, so I could be wrong. I'm a little bit of a naysayer on new materials for the workhorse component of the solar power plants, the solar modules or even for call it, you know, sub four, six hour energy storage. So it seems like, uh, silicon and there's all kinds of cool things they do with the silicon. But silicon is gonna win for the solar modules and lithium-ion is gonna win for the batteries. And partly it's 'cause I've seen this movie before. I started my career in semiconductors and you know, early days, people were talking about alternative materials to silicon like gallium arsenide and other such materials that the physicists could tell you had, you know, better properties.
But in the end, just the momentum and the inertia and the advantages on the manufacturing side and capital equipment and the supply chain being so mature, like no one ever did anything except silicon. And we saw that in early days when I was my first 10 years in the solar industry, everybody was talking about alternative materials. So there were CIGS modules. They were talking about thin film, various thin films materials. And there was a lot of venture money, Solyndra probably being the most famous [laughs] one that failed. But a lot of venture money went into these alternative material startups that in, and a lot of them even got to production that were making small amounts of non-silicon or noncrystalline silicon solar modules.
But in the end, other than first solar, which is an interesting exception, really none of them made it because over time, just the inertia of an entire industry working with a single material and the fact that, hey, if I wanna expand a plant, I just call somebody and they know how to build it for me and all the capital equipment just shows up and is tuned. It's just too great. And I think we're seeing that with batteries too, with lithium-ion, it's, it's the same thing as silicon. There a physicist and a spreadsheet can show that there's a material that's better, but it's just there's so much inertia behind it. Now for long-duration maybe is a different application and maybe there's something else if you're not really long-duration. It's hard for me to imagine that some material beats lithium-ion at scale for like four and six hours. It's just got so much momentum behind it.
Jason Jacobs: So switching gears for a second, I, I'd love to just talk a little bit about jobs because as the solar industry matures, there's clearly a big opportunity for new job creation. What is the best source of talent for those jobs? And, and if you look at say traditional oil and gas, are you guys the enemy or do they see you as part of a prosperous future for all?
Mike Hall: Yeah, so that's an interesting question. So on the jobs, yeah, I understand it's interesting because it is growing and it's young. So the challenge, so it's, it's hard to find good people these days, right, in our area in particular, you know. Engineers or experienced construction managers, those industries have largely remained strong during the pandemic. So I know there's a lot of unemployment, but there's not a lot of unemployment in the sectors and geographies that we work in.
So talent is, talent recruiting, it's a major issue for us. And, you know, we [laughs] unfortunately, I guess, using probably the real conventional recruiting techniques that everybody else uses like the LinkedIns and, you know, really popular job boards of the world. And, you know, there's fewer events to go to. So that's a downer. But, you know, we use pretty conventionally recruiting techniques. We're trying to mature and think about how to innovate there. But we have an amazing recruiting department, but largely using conventional techniques.
With regards to the oil and gas, I'll say I don't interact a lot with the oil and gas sector. I can say and so I don't know how they think about our, our jobs and our job creation. And I think that, but I can just hearing how the executives at big oil have started to talk about their future, it does seem like there's been a real shift from, okay, we're gonna dabble in this renewable stuff. We need to keep an eye on it. Yeah, we accept global warming, but we're an oil company too. Yeah, there's, the future is not oil. And we need to think about, uh, a different approach to energy. Largely need to really refo- get into power and we need to get into renewables.
And so there's almost been an acceptance of that feature that I talked about at the beginning of our conversation that the future is renewables and that electrification is coming. The, the adoption is just gonna continue to grow and that you can't be a big oil company 50 years from now. And so I think that that there's just been a shift and that's really only happened in the last couple of years, probably hastened by the pandemic and the crash in oil prices. I know they've rebounded a little bit, but when they went really down I think everybody had to really think about, hey, what's our future look like? So that's, that's been exciting. And so how is big oil gonna play in this industry? I think TBD, but at least the executives are talking like they understand they need to be in this industry in that if they're gonna have a future as a big player in energy, they need to be power and they need to be in renewables.
Jason Jacobs: So maybe a relevant question there is what does the competitive landscape look like? Is it really fragmented and regional today or are there a handful of players that have a lion's share of the market and how do you think it will look in five or 10 years?
Mike Hall: Yeah, I... So the downstream industry, an industry we play in is if you think, look at it nationally, somewhat fragmented in any particular state market, there'll be still a few players that have a significant portion of the market, but with the long tail, a lot of other players. So our part of the industry is five-minute the up stream part like the, the companies that are making the solar modules are in the inverters and the racking is also very fragment and becoming more fragmented there. I think 41 Bloomberg New Energy Finance comes out with a tier one module supplier list. And I think there's 41 at OEMs on the list and it's growing. So it was like 30 something, 20 something and it's growing. So it's becoming more fragmented.
What do I think it's gonna look like in the future? I think it's too fragmented now. I think that there's probably still some fragmentation downstream, but I think there'll be more standardization in the product mix. The supply chain will become more sophisticated. I think that downstream businesses will. The fragmented part might look somewhat like what it does today, but there's going to be more of a consolidated supply chain and logistics solutions feeding them and 'cause that's I think really the way you get business model innovation and really continue to drive down costs.
So I do think we'll see some consolidation, but I think in certain parts of the industry in the end, the actual putting steel in the ground is a local game. And so I don't see that there's going to be a national company that's like, hey, we put all the steel in the ground. But I do think there might be consolidation in the supply of those local companies in terms of, you know, here's the steel, here's prefabricated parts, you know, here's a plan. We're supplying you with a logistics machine and a capability that really takes a lot of the, the workout and cost at each project.
Jason Jacobs: And given the challenge in recruiting is robotics and automation, something that you think about at all and do you think it's got any credible role to play in the future?
Mike Hall: Yeah. Yeah, that's a really good question. We do think about it, but we haven't... I think it's very early stages. I'll just say that. And I saw the first, I visited my first robotics installation startup probably four or five years ago. And, you know, [laughs] it was I think kind of a classic startup experience where like I looked at the presentation, I got the idea. I thought it was really interesting. I thought it could really change things. And then I go out there and visit it and watch the robot work. And we just see how many actual issues there are with really using these technologies. Like the robot kept stopping, they kept having to do it. It couldn't deal with this type of training and that type of training.
And so in the end, you had a lot of issues that were, that were gonna require a lot of capital and time to work through. And then just a heap of restrictions on where the technology, I mean, humans are really flexible. Robots are much, I know they're getting more flexible and much less so. And so we, we still haven't seen that yet on the installation side. I think we aren't using them, but there's some robotic solutions like on the maintenance side and washing side I think that are helping. And I think we'll see that first because those are more repetitive tasks. But on the installation side, are we gonna get there? Maybe eventually, but the field conditions still seem too variable for the robotic technology that I've seen.
Jason Jacobs: I know we're running up on time, but one final topic I just love to hit briefly is we talked earlier in this discussion about the importance of state level politics. Given the outsize role that state level politics plays, putting personal politics aside, were you on pins and needles from a professional standpoint about the outcome of the recent presidential election or, or was it kind of a non-factor one way or another?
Mike Hall: [laughs] Really you want me to do it personal politics aside?
Jason Jacobs: [laughs] Well, I mean, it's your choice. You, you can feel free to incorporate them, but you're not required to, but you're, but you're not required to.
Mike Hall: Actually I'm pins and needles. I was [inaudible 00:46:46]. Yeah, I guess, I won't get too political. But yeah, I, I was fearful for our country. So yeah, I mean, I, I'm, I'm unsure what support we're gonna get from the federal government. I know that this administration has a completely different view on climate change than the last administration. They obviously believe in the science, but also believe it's a big problem and a problem that the federal government should help solve. And so I have some optimism there, I do. And, you know, there's this infrastructure bill which I haven't studied, but has a clean energy component and has a power sector component. And I think that's all positive. The politics at the federal level are, you know, just challenging with, you know, the Senate and the supermajority and all of that.
And so what can we get done? I hope we get done a lot because we need to get a lot done and we should have given how big an emitter are. We are, we should have federal leadership on climate and the Clean Power Plan and the EPA regs that the Obama administration put in and then the last administration did away with and this administration would probably try and bring back, you know, that's a start, but it's only a start. And so I think we do need to do a lot more. And so I'm hopeful and I'm optimistic, but I'm also not banking on it just because of the way federal politics work. But yeah, I mean, I mean, it's definitely an exciting, like I was talking to another Clean Energy CEO last week and he's just like, this is our time. Like this is our time. This decade is our time for so many-
Jason Jacobs: Like The Goonies.
Mike Hall: What's that?
Jason Jacobs: Like the Goonies.
Mike Hall: Goonies. I like The Goonies-
Jason Jacobs: [laughs]
Mike Hall: That's so funny. Yeah, like yeah, totally. I didn't hear that.
Jason Jacobs: No one's gonna get that because no one's as old as we are. [laughs]
Mike Hall: I made my kids watch Goonies and, uh, they're like, "Oh, it's so old. It's so old." They said the graphics are bad. I'm like, "It's not graphics. It's live action." But okay. And then 30 minutes in, they were hooked-
Jason Jacobs: Oh, it was a great, great movie.
Mike Hall: Yeah.
Jason Jacobs: Well, let's see. What haven't I asked you? I guess, the last thing is just for anyone listening that is jazzed about what you're doing, who do you wanna hear from, how can listeners be helpful to you? Could be your open jobs that you have. It could be certain types of customers that make a good profile for you. I mean, you, don't let me put words in your mouth. How, how can we help?
Mike Hall: Yeah, yeah, no, absolutely. So we're definitely recruiting. We're hiring. So you can go to Borrego. We just changed our website. I don't wanna get it wrong. [laughs] It gets borregoenergy.com, borregoenergy.com in that careers page. And we're hiring number of, uh, positions across the country. And, you know, it ranges from engineers, construction managers, specialty trades like information technology. But also we employ a lot of electricians and technicians for operation and maintenance. So if you're in that part of the work stream in the trades, we're hiring too. So that's exciting. If you're in the business of owning generation, trying to find projects, trying to get a project executed, need help maintaining a project, we work with owners across all those areas.
And yeah. And then we talked about the policy side, if you're in particular in the states that we're active in throughout New England, the Northeast and Mid-Atlantic, the West and the Midwest and you think there's an opportunity to partner there to get things done, you know, like it needs, takes coalitions to do good work. And so those are other opportunities. But yeah, I mean, it's a, it's an exciting time. It's, it's definitely our time, our being the whole renewable energy industry. So it's gonna take us all. But I think 10 years from now, we're gonna look back and we're gonna have made an amazing amount of progress.
Jason Jacobs: And anything I didn't ask you, Mike, that I should have or any parting words for listeners? And that, that might've been at what you just said that-
Mike Hall: Yeah, I think, I think-
Jason Jacobs: ... probably a good point to end on.
Mike Hall: ... That was my rah-rah finish-
Jason Jacobs: Yeah. Yeah, I should have asked that like, you know, right before you said that, otherwise now anything you say is going to be anticlimactic.
Mike Hall: Yeah. Yeah. I should. I need to develop a second one, but-
Jason Jacobs: On core.
Mike Hall: Yeah. Yeah.
Jason Jacobs: Well, awesome. Such a wide ranging, fascinating discussion. I learned a ton, which means listeners probably will too. I can't thank you enough for making the time and coming on the show.
Mike Hall: Yeah, great. Thanks a lot for having me, Jason.
Jason Jacobs: Hey everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. Note that is .co not .com. Someday we'll get the .com, but right now .co. You can also find me on Twitter @jjacobs22, where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers may be say that. Thank you.
