Feb 18

Feb 18 Solar: Going Bigger

Podcast Interview: VSF Solar's Walter McLeod Discusses Ramping Up Solar to Utility-Scale

By Ethan Goffman

Walter McLeod, George Mason University alumni photo

Walter McLeod is Managing Director and Co-Founder of VSF Solar, which manages the construction of utility-scale solar energy systems. The company currently has an active pipeline of over 60 Megawatts of solar PV under development in Virginia. With more than 20 years’ experience in energy policy and solar development, McCleod also manages the Global Energy and Innovation Institute, a public-private partnership with George Mason University.

McCleod served on the ground breaking “Utility 2.0” project steering committee of the United Nations Foundation, on the Commonwealth of Virginia “Value of Solar” stakeholder committee, and is Managing Director of Clean Power Group Africa. In 2008, he founded Eco Capitol Companies, which provides strategic analysis on sustainable energy and transportation. With a Masters of Chemistry from George Mason, McCleod chairs that university’s College of Science alumni chapter.

EarthTalk: Can you say a little about VSF Solar? Why was the company founded and under what circumstances?

Walter McCleod: So VSF Solar is an in dependent power producer. We build utility scale solar projects, primarily in the mid-Atlantic region and we have experience developing these projects in North Carolina and more recently, in Virginia. And the reason it was founded is because there’s been a significant shift in public policy and the move towards solar in the commonwealth. Since about 2015, there’s been the primary, dominant utility Dominion Energy, which made a strategic move to focus on solar and natural gas as the primary generation sources for the state. So that created opportunities for companies like ours to enter the market and start bringing our service to what is now probably the fastest growing solar economy in the U.S.

E: Which is Virginia, the whole state?

McCleod: Yes, yes. In fact, I think Dominion in their recent IRP report is projecting 5.5 gigawatts of solar in the near term, which is phenomenal. So yeah, there’s going to be a lot of solar in Virginia.

E: Okay, and how much did concerns about the environment affect your decision to start the company, and how much was economic opportunity?

McCleod: Well, I think obviously we want to do well and we want to do good. So we’re driven by those dual purposes and the environment is the most important thing we have. So if we, as an energy consuming nation, the largest energy consuming nation on the planet, if we can figure out a way to consume more clean energy, then it’s better not just for us but it’s better for the planet in general. But also, I think you’re looking at the beginning of a real transition in the way that we create power in the world. We’re going away from extracting power in the form of fossil fuels, to harvesting power from renewable resources. So we’re harvesting the wind, we’re harvesting the sun, and it’s much more in sync with the way that these natural processes work anyway. So I think it’s going to create some really great economic opportunity for people who are positioned well, who understand the space and who are able to seize the moment, and that’s one of the things that we’re trying to do.

E: Great. So you’re getting on top of a trend, really a game changing trend as it’s starting.

McCleod: Yeah, a secular trend, I think. A long term secular trend that is part of a number of these secular trends; the big technology secular trend that’s happening right now with the way we communicate and the way we interact, through social media, electronics, and all of these platforms, is also transferring over into things like electricity, energy generation and transportation.

E: Right. So it’s really using many technological changes all happening at once and integrating them.

McCleod: Yes, that’s right.

E: And you’re developing — we think of the home solar power, which I have myself on my roof, but you’re doing larger scale utility projects. So can you say a little about what that entails as a company? Like what obstacles, financing and also the advantages of larger scale projects.

McCleod: Sure, of course. So utility scale solar is one of three common forms of solar development; there’s utility scale, there’s commercial and industrial scale, which is a bit smaller, and then there’s the residential scale, which is probably what you may have at your home and what most consumers are familiar with putting on their rooftops. The reason that we are developing at the utility scale is because at the moment, the cost for utility scale per megawatt is lower than it would be for the other two forms of development. So there’s a cost benefit in going bigger. The other reason why is because the market for utility scale has been the fastest growing, that’s been where the market is right now. So as we’ve been starting to develop a commercial and industrial platform to go along with our utility scale work, we tend to, as solar developers, go to where the market is, and this has been — this has worked for us as a business strategy.

E: Great. And who are some of your main clients and what are some of the major projects that you’ve worked on?

McCleod: For utility scale projects, the clients are — they can be varied. So they can be electric utilities, both publicly owned utilities, co ops, and municipals. We can also develop projects for bigger developers, some of the national developers, like First Solar, which is also a panel manufacturer. They make a thin filmed panel that is unique and it’s made here in the U.S., but they also develop projects. SunPower is another solar manufacturer; they make panels and they buy projects. And then there are regional players that build these projects, and then they own them and sell the power to the utility, or they sell the power across a regional grid, like the PJM grid. So those are the folks that we tend to sell to. Sometimes we will enter into a power purchase agreement with commercial entities or with private entities. So Microsoft and Facebook and Amazon in this region, specifically in Virginia, have been featured buyers of solar projects and we would love to work with them as a small business entity. And we can work with them and we can also work with entities like universities. Recently, I know George Washington University formed a consortium and they bought a large purchase of solar power from Duke Energy in North Carolina. So those are all of the typical targets that we focus on when we’re looking to sell our power and our projects.

E: Great, so you’re really partnering with a large number of entities.

McCleod: Yes, that’s right.

E: And besides your work developing solar, you also founded the Global Energy and Innovation Institute, which is a partnership with George Mason University. Can you say just a little bit about the institute and what it does and also how it overlaps with your work at VSF Solar?

McCleod: Absolutely. So the Global Energy and Innovation Institute is a public/private partnership that we formed with the college of science at George Mason. And really our focus is to advance low the carbon electric economy, efforts, initiatives, programs, partnerships to work with industry, to work with government, to work with communities, to come up with solutions that accelerate the transition to low carbon electricity and electrification in general. And we focus on two verticals that are really gaining traction nationally. So transportation is one of our partnering verticals. The other vertical that we spend a lot of time on is grid innovation and in transportation, our focus is really around electric vehicles and electric vehicle infrastructure, and incentives to make that happen. A lot of folks are talking about the new paradigm of automated electric and shared transportation or mobility, and we think that that’s probably the new reality. That’s where we’re moving, and we believe that shift should happen in a way that makes sense and doesn’t necessarily have any harmful disruption to the current system. There’s a way to transition that so that the economy grows and it’s a win/win. That’s one of the primary areas we focus on, and then around grid innovation, we’ve been doing a lot around the digital grid. As you know, northern Virginia in particular is home to almost 90% of internet traffic east of the Mississippi here in the United States, because of the presence of the data center community. We think that that is going to grow; the region is going to become more known as a data and technology center and it’s going to have to be powered by, hopefully, clean energy. Low carbon clean energy, and that’s what we want to make sure happens. As we see greater digitization, greater electrification of everything we do, we want to see that be fueled by clean energy; low carbon power.

E: So transportation, communication, pretty much all of our — everything we depend on in society today is increasingly linked to clean energy, but you have to make a bit of an effort to make sure that you get this ecologically friendly energy.

McCleod: That’s right. You’ve got to go to the source and a lot of folks are unaware of how their power is generated. We think that that needs to change; people need to understand the difference between dirtier generation and cleaner generation, and the carbon impacts of each. And so it’s an educational lift, a public awareness lift, but it’s also a market lift. The market and the innovation that’s coming of age, it’s often ahead of the regulatory and policy paradigm. And so they play catch up.

E: Right and unfortunately right now, we are not in a time when the Federal Government, under Trump, is working towards this energy. And they even slapped a tariff on imported solar panels. So how might this lack of federal support right now affect your business?

McCleod: Well, it doesn’t help our business. There are certainly folks making an argument that it will create more jobs for domestic manufacturing around solar panels, but I think you’re going to see more jobs lost than gained. Because the net effect is that the U.S. is not, and has not been, a manufacturing power for solar power for some time. We are the innovation power; we create the innovations and then the manufacturing, often times, some of it happens here. First Solar is an example of that, they’ve got the most innovative thin film technology that the world knows. But for standard panels, the world is the marketplace and to just have a blanket tariff on this particular industry that is the fastest growing job creating sector in the country, by many estimates, is going to slow job growth. It’s going to have a negative impact eventually. And so we’re hoping that it’s just tempered; that the industry finds a way to adjust and continue its forward and upward trajectory. But it’s not been something that we like to see, and we’ll increase the price of panels somewhat.

E: Somewhat. So is it more like just a speed bump that you think you’ll overcome or more like a real longterm constraint that’s a serious worry?

McCleod: Well, I hope it’s a speed bump. I hope this is, at most, a four to six month slow down that once we are able to figure out the true market implications of it, that we’re able to digest that and projects are still financed and that people don’t lose jobs, most importantly.

E: Right, because now the solar industry is one of the leading and growing job creation sectors.

McCleod: Yes and when I mentioned the there sectors that projects are developed in, in the residential sector is where I think you’ll see the biggest hit in terms of job loss, because the margins are very thin there. And when you look at a 10% or 15% or whatever that number ends up being in terms of the increase in panel cost, it’s going to translate into lost jobs.

E: Okay, I’m glad I got my solar panels up and charging already.

McCleod: Smart move.

E: Alright, lastly, do you have any suggestions for individuals who might want to develop their own environmentally friendly businesses, especially in the current climate?

McCleod: Well, I think you have to definitely do some homework. There are different segments of the market; if you’re interested in renewable energy, if you’re interested in electrified or clean transportation. There are different entry points where you can add value. Look at your skillset. There are lots of opportunities, both in the Washington metropolitan region, as well as nationally. But the thing to do is to align yourself with a sector that you can add real value to, and do your homework. But it’s a great opportunity, it’s a great time to be in this growing market and it’s exciting to be adding to the legacy of clean energy. It’s going to really recreate the future for all Americans.

E: Okay, so the opportunities are there, it just takes work and foresight.

McCleod: Yes, that’s right. Get involved locally, if you have an interest. I know I got involved, I was appointed to a commission that the general assembly and the governor had set up a few years ago to look at the value of solar. And that was where I knew Virginia’s market was changing because I could see where the governor was leading things, Governor McAuliffe. I could see where the big utility player was shifting, and that let me know. That was my signal that I needed to refocus my efforts from, at that time, North Carolina, back to Virginia and I’m glad I did. So get involved.

E: Alright, great advice. Thank you very much.

McCleod: Thank you.