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A distributed generation Q&A with Erik Schiemann

20 September 2021 Kevin Adler

Record droughts in the Western US, hurricanes pounding both the Gulf and East coasts, and wildfires burning unchecked—all climate change-related disasters pushing home and business owners to think about relying less on the wholesale power grid, and to consider the benefits of distributed generation.

BlackRock, the world's largest investment firm, with $8.7 trillion in assets under management, in February said it may require companies it invests in to alter their strategies if firms aren't taking sufficient steps to tackle climate change.

Over two years ago, it was already on the case, if not ahead of the curve, when it came to distributed generation, founding Distributed Solar Development (DSD).

Net-Zero Business Daily spoke to DSD CEO Erik Schiemann on what the last couple of years have brought, and what can be expected down the line.

Net-Zero Business Daily: GE Solar and BlackRock announced DSD a little over two years ago in July 2019. How is it going so far?

Schiemann: Our partnership has really bolstered DSD's growth, and the fact that BlackRock doubled down in 2020 by buying out GE's remaining share in DSD is a testament to the value our partnership has created. Because of this relationship, DSD is in a unique financial position that allows us to own and operate distributed renewable energy assets long-term, which is not only better for our customers, but also allows us to accelerate the deployment of distributed assets across the country by helping smaller developers get their projects financed and built.

Net-Zero Business Daily: How have the companies' strengths contributed to DSD?

Schiemann: BlackRock's focus on ESG and its call for organizations within its portfolios to develop and be held accountable to a net-zero transition plan has positioned BlackRock as a financial leader in the battle against climate change. This has certainly opened some doors for DSD as BlackRock's investment in us further validates our experience, expertise, and capabilities as a distributed renewable energy leader.

Net-Zero Business Daily: When announced, DSD indicated it would build on GE Solar's work of "solar and storage solutions" since 2012. What's been a couple of key focus areas so far?

Schiemann: While we continue to develop solar and storage solutions for our customers, DSD now owns and operates those assets long-term. This allows us to acquire projects and portfolios, and establish a large portfolio of community solar assets in states with favorable programs, such as New York. Additionally, we announced the launch of the DSD Developer Network earlier this year, which, through our DSD Connect portal, gives regional developers and engineering, procurement, and construction firms access to competitive capital and resources to build projects and grow their businesses.

Net-Zero Business Daily: Based on the answer to Question 3, could you provide more detail on commercial applications in the last two years?

Schiemann: We continue to see the highest demand for onsite canopy and rooftop solar amongst large corporations with a significant environmental footprint, such as retailers with multiple stores and distribution centers, and the municipality, universities, schools, and hospitals (MUSH) market. We're also seeing growing demand for larger commercial and industrial ground-mount and rooftop arrays with small utilities and in markets that have developed community solar programs. Energy storage is now a part of almost every conversation we have with customers and we're seeing an increasing interest in how on-site electric vehicle (EV) charging fits into the overall picture as well. Unsurprisingly, organizations are interested in learning about how they can reduce their dependence on fossil fuels to meet their sustainability and net-zero goals.

Net-Zero Business Daily: What about research areas? Where are you focusing your efforts?

Schiemann: Each project and customer has different needs, goals, site logistics, and incentive opportunities. We have internal experts who specialize in a range of disciplines and skills—such as equipment, local policy and incentives, new financial mechanisms for project financing, and more—that constantly keep their fingers on the pulse of the latest advancements and innovations in their respective areas of expertise. As a rule, we focus our efforts on consistent iteration and improving our processes for our customers and partners, as well as finding new and low-cost energy solutions.

Net-Zero Business Daily: The last two years have been successful for solar energy and for storage, despite the COVID-19 pandemic. What's your perspective on those years and the momentum in the industry today?

Schiemann: The last two years have been incredibly challenging, both professionally and personally, for all our employees, despite the surge in demand we've seen. As an organization, DSD has always been set up to work remotely, but we still had the challenge of moving projects forward with our vendors and partners that struggled through the transition to remote work initially. Now that most companies have settled into the new remote working environment, many in the industry are now struggling with supply chain issues. So, while demand has surged and our project pipeline and backlog growth has been tremendous, the whole industry is still feeling the macro effects of the pandemic and facing challenges associated with getting assets built and operational. That said, distributed renewable energy will continue to grow and I'm encouraged by some of the renewed focus on infrastructure development that's needed to support the growing demand.

Net-Zero Business Daily: There seems to be a convergence of renewables and storage—with that being said, a lot of future renewable installations will have co-located storage. Do you see that, and what is driving it?

Schiemann: Yes, definitely. From an economic perspective, storage delivers exceptional value when coupled with onsite solar. It allows an organization to deploy cheaper, renewable energy at times when the solar array may not be producing as much energy, but the electric demand is higher. That has the potential to save organizations a significant amount of money on demand charges and peak energy rates. Also, organizations are experiencing firsthand the impact onsite EV charging stations have on its electric load—storage can help offset those increased costs significantly.

Net-Zero Business Daily: What services or needs are your customers asking/looking for?

Schiemann: An increasing number of customers are looking to achieve net-zero targets or meet sustainability goals. The best route here is to take a multi-faceted approach that not only involves onsite solar, but also energy storage, EV charging, fleet electrification, and more.

Posted 20 September 2021 by Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit

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