March 30, 2007 10:00 AM PDT
Newsmaker: Does the solar industry need a Salesforce.com?See all Newsmakers
Getting electricity from the sun has clear environmental benefits and can make sense economically. But to install solar panels, customers and installers face big up-front costs and a maze of government incentive programs.
Millions of dollars are being poured into making cells better at converting sunlight to electricity, but the industry's future isn't riding on some radical technical advance, Shah argues. Instead, what's needed is the right business model to make it work cost effectively and at scale.
Much like the way companies purchase software as a service from hosted application providers like Salesforce.com, SunEdison and other companies offer corporate customers the ability to buy electricity, rather than solar panels.
The panels sit on the roof of an office park building or retail outlet, but the panels belong to and are maintained by someone else.
Shah, who was on a solar power panel at the Massachusetts Institute of Technology's
One of the things you said at the MIT conference is that innovation in financing is equally as important as technical innovation in the solar industry. What needs to be done there?
Shah: What Sun Edison has been able to do to date (is like) the mortgage industry, where people (don't have) to pay cash up front for a home (and instead) get a mortgage. That (mortgage industry) innovation occurred probably in the '30s or '40s. The next stage is to create what the mortgage industry has already done, which is to create a Fannie Mae to reduce interest rates for everybody and spread risk. Because right now SunEdison only works with the best, credit-grade customers. So we work with folks that have investment-grade credit, large companies, municipalities, state governments.